A New Force Challenging Advertising

Continuing from last time, we introduce major trends from Dentsu Inc. Aegis Network Carat's "TOP 10 TRENDS" for 2016.

New challenges surrounding advertising are emerging one after another: how advertising functions, pricing for free content, and even shifts in user perceptions of free ad-supported content.

A primary driver is the rise of Netflix, whose paid membership has reached 69 million. It shifted the business model trend from free content with ads to paid content without ads. Members now watch two hours of ad-free content per household. Services like Amazon Prime, Sky's NOW TV, and YouTube Red are following with similar business models.

Another factor is the widespread adoption of free, easy-to-install ad-blocking apps. Users aim to enhance their viewing experience, reduce data loading times, avoid tracking, and save mobile data costs. While exact figures are unclear, millions worldwide likely already block web ads.

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Advertisers must strategically adapt to ensure their ads reach their target audience. Ads within apps and content-integrated formats like native advertising, which blend well with the media, face a lower risk of being blocked.

Collaborations and sponsorships become effective strategies when advertisers are confident consumers will engage with their message. Another approach is for the advertiser's brand to become a publisher itself.