It’s become evident in recent years that there is a growing trend to increase investment in online advertising to reach younger adults. On initial consideration this appears logical, as younger, digitally-native consumers are among the earliest adopters of new technology and we have witnessed a large rise in time spent by this age group consuming digital media. What’s more, this intuitive common sense is used as the rationale to encourage brands to divert spend from traditional media to online; from linear TV to video on demand (VOD).
We believe that this line of argument may not be as robust as its proponents suggest, and it could actually be harming the effectiveness of advertisers’ media investment.
It is true that 16-24s have changed their viewing habits in recent years, with the reach of linear TV in this age range in the UK falling from 88.4 percent in 2011 to 85 percent in 2015, and among 25-34’s reach has fallen from 93.6 percent to 91.8 percent. However, this change has not impacted significantly on linear TV’s ability to deliver these apparently declining audiences.
It also ignores a number of problems inherent in online video advertising. This includes the main publicised issues with viewability and fraudulent traffic, the delivery of campaigns across small video players, the use of incentivised video ads, and platforms such as mobile where the experience may not be as powerful as on a large screen. And it also includes a lack of justification or explanation about how online advertising contributes to overall marketing effectiveness.
But there’s a much more difficult challenge facing advertisers who choose to switch budgets from linear TV to online VOD. For while BARB figures show that the reach of 16-24s reduced by 3.85 percent on linear TV in 2015 compared with 2011, the rise of adblocking has potentially had a much more significant, negative impact on the reach that online video advertising can achieve for advertisers.
 Source: BARB 2015
Data from eMarketer suggests that adblocking rates reached 30 percent of all internet users in mature, developed, Western European markets in 2016. But among the key group of 16-24s, adoption of adblocking software is already more than 50 percent, with 53 percent of 16-24s in France, for example, having installed adblockers by February 2016. And this only falls to 39 percent for 25-34s. This trend is much more pronounced than the decline in linear TV reach and is effectively denying advertisers access to almost half of these important audiences in the major Western European countries – though of course this pattern may not play out in markets such as China where the media dynamics are quite different.
It is undeniable that younger consumers are highly engaged in the whole digital ecosystem. The trouble is, the widespread adoption of adblocking means that advertisers are increasingly unable to use engaging display and video formats to gain the efficient scale they need with this key target audience.
This contradiction in the march to online advertising does not seem to have been routinely highlighted by those who advocate it for brands looking to reach younger consumers. This might be due to a confusion between consumer usage patterns and effective online advertising opportunities. The former is growing in digital, the latter is significantly challenged and should be approached with much more caution.
Ebiquity is in a fortunate position to see these effects play out as we have one of the world’s leading Media Effectiveness practices. We’ve worked with hundreds of advertisers to analyse their entire media activity and have seen this theory play out time and time again. In the majority of the studies we’ve done in over 10 years, we’ve seen that online advertising delivers the lowest ROI of any medium measured.
So before rushing to switch advertising from linear TV to online video and VOD in the pursuit of younger, digitally-native consumers, advertisers should reflect that these very consumers (a) are the most likely groups of consumers to block online advertising, and (b) are still consuming linear TV at scale which makes it an efficient medium with which to reach them.
Notes for editors
Tim Hussain has written about why adblocking matters to advertisers, here, and the steps they should take in response to the phenomenon.
Early last summer, the Ebiquity Digital team produced an infographic detailing the rise and rise of adblocking. It can be downloaded here.