Some use data to sharpen their messages, while others blur line between ads and content
By SUZANNE VRANICA
June 19, 2016 5:30 a.m. ET
Harry Li, a 26-year-old Atlanta native, has been binge-watching all 10 seasons of “Friends” on commercial-free Netflix over the past few months. He doesn’t pay for cable TV, but watches his favorite TV shows such as the CW’s superhero series “Arrow” by streaming pirated copies online.
Even then, he is out of advertisers’ reach. The ad-blocking software on his laptop strips out many of the commercials.
“I just like to watch a 40-minute show in one go rather than watch the commercials,” said Mr. Li. “The 18 minutes of ads is unappealing.”
As the global marketing industry gathers on the French Riviera for the Cannes advertising festival this week, there is an awareness that grabbing consumers’ attention is getting harder and more frustrating across nearly all types of media. People are avoiding print ads, skipping through TV ads and cutting cable subscriptions. Reaching them online is getting tougher, too, between the rising use of ad blockers and the many scams in which fake, computer-generated web traffic lures in ad dollars.
As a result, companies are rewriting their marketing playbooks. Some are blurring the line between advertising and content, in the hopes of passing through the filter of what consumers actually see and read. Others are diving deeper into data and location targeting on the theory that consumers will embrace ads that they find relevant.
PepsiCo Inc. recently opened a 4,000-square-foot studio in New York to produce a wide range of branded content from reality programs to online films. Earlier this year, it got big play in the plotline of Fox’s drama “Empire,” when a character on the program was offered an endorsement contract with Pepsi.
The idea is to not look and feel like advertising in the hope that consumers won’t skip.
“Over time, advertising has gained the reputation of pollution content,” said Brad Jakeman, president of PepsiCo’s global beverage group. “We have to now create content that consumers want” to watch, he said.
Almost half the 24,000 U.S. consumers surveyed last year by market research firm GfK MRI agreed that “much of advertising is way too annoying.” In the online realm, digital-ad interruptions are too frequent, according to 84% of people Accenture surveyed this year in 28 countries. Some 10% of desktop web users in the U.S. have ad blockers installed, and the practice is now ramping up on mobile.
Consumers can “skip ads, block ads and avoid ads in their entirety,” said Laura Henderson, Mondelez International Inc.’s global head of content and media monetization. The company is currently co-producing “Heaven Sent,” a one-hour skydiving special that will promote its Stride chewing gum and air live on network TV this summer. “We’re shifting from media buyer to more of a content producer,” Ms. Henderson said.
The snack giant’s mobile app game “Twist, Lick, Dunk,” which lets users dunk Oreo cookies, has been downloaded seven million times and people have spent an average of 40 minutes on the app, Mondelez said.
Marketers have been drawn to digital advertising because of the promise of targeting consumers with more precision. But the backlash over the quantity and intrusiveness of digital marketing, and the adoption of ad blockers, is forcing them to figure out other ways to capture users’ attention.
Advertisers like Coldwell Banker Real Estate LLC are embracing so-called native ads, which seamlessly blend into a user’s feed and are harder to distinguish from editorial content.
“Native ads have 50% higher click-through rates than any of our [display] banner inventory,” said Sean Blankenship, chief marketing officer of Coldwell, which shifted ad dollars out of display advertising this year and into native ads.
The company said native ads are also an effective way to reach people on mobile devices, where traditional banners fall flat.