Automated ad buying costs more than the traditional methods and is going to get exponentially more expensive.
AOL CEO Tim Armstrong in his talk during the Advertising Week stated that marketers should not be surprised by how much more automated ad buying costs than traditional methods today. This is only due to the fact that it gets that much harder for marketers to persuade consumers into a switch of product each time e-commerce makes another purchase routine and that is particularly true with the rise of subscription services and the integration online physical buy buttons.
“Advertising is going to get exponentially more expensive” Mr. Armstrong said.
Persuading shoppers to try something new when they’re strolling aimlessly checking out shelf promotions in the supermarket with an empty cart is one thing. But it is a more challenging thing for advertisers to convince a shopper whose cart is always already full to try a new product and remove the tried and tested one.
“You are going to have to pay a lot of money to convert someone. AOL is working on a “bunch” of e-commerce ad units itself” Mr. Armstrong noted.
Mr. Armstrong in his insights on the ad blocking issue stated that Ad blocking isn’t likely to help the economics for marketers and the industry has to approach the said challenge right away.
“Everyone is spending all their time talking about ad blocking right now, yet everyone should be spending more of their time to talk about why consumers feel the need to block ads” he said.
AOL on advertising issues, reviewed the kinds of ads it should be serving to consumers and how to do it. According to Mr. Armstrong, ad blockers are deemed to be the big disruptors of the moment but in the future, this will be some company that figures out how to do advertising differently.
“We’re all going to live in an invisible prison if we think ads are going to stay the way they are today.” he said.