Experts Share: How The Rise Of Ads Impacts The Quality Of Online Platforms

Excerpt shared from Tech Round's 'Experts Share: How The Rise Of Ads Impacts The Quality Of Online Platforms':

Advertising certainly has moved from being just television, radio and newspapers. McKinsey reports that new systems called commerce media networks are driving growth across platforms where people already spend time, such as travel apps, streaming sites and payment services. These networks place adverts directly within digital experiences, turning shopping, booking flights, even using a ride-hailing app, into a marketing opportunity.

The US market for CMNs is expected to reach more than $100 billion by 2027, with an annual growth rate above 21%. McKinsey’s survey of 150 advertisers showed that 55% plan to raise their CMN spending in the next year. Advertisers are moving around budgets to be less social media and search so they display more ads with CMNs, which use first-party data to target people more precisely. This means more advertising is appearing in everyday activities that previously seemed free from commercial messages.

Large names such as Uber, United Airlines, DoorDash and PayPal now run their own media networks. This gives brands the chance to reach consumers through travel, delivery and financial platforms, where purchase intent is already high. Nearly 70% of travel advertisers and 60% of consumer goods companies said they plan to increase their spending in this space.

How Are Users Responding To Constant Advertising?

Not long ago, Meta announced that people in the UK will soon have to pay to remove adverts from Facebook and Instagram. The subscription will apply across all linked accounts through Meta’s Account Centre.

The company said that in 2024, its advertising tools helped create £65 billion in economic activity and over 357,000 jobs in the UK. Every pound spent on ads through Meta generated an average of £3.82 in revenue for UK companies. Meta argued that the UK’s more flexible rules compared with the EU make it easier to offer users choice without harming business growth.

With adverts appearing on more platforms, users are starting to question whether free services are truly free. Are all these targeted ads and strategies to make users pay for no ads impacting the overall user experience?

As Jason Patterson at Jewel Content Marketing Agency, said: “Advertising makes social media less social, by revealing its fundamental purpose as being commercial. People don’t mind advertising when it’s more attractive or interesting than what’s around it, but that’s rarely the case on social media, where fraudulent ad data makes advertisers believe their s**t don’t stink.”



Experts share their thoughts on this…

James Macdonald, Co-Founder and CRO, Limelight:

“Ads or no ads, that is the question , both from a commercial perspective as well as the user’. This is not a new thing. The Times and Sunday Times made a decision to go behind a paywall some years back. Spotify, and other platforms, offer the option to remove ads for an upgraded subscription. I personally think ads actually can and do add value if curated and managed in the right way by the publisher/platform but that’s another article in itself.

“In Meta’s case, it’s definitely a very real issue, as it’s clear the intrusive and indiscriminate nature of some of the targeting and creative, not to mention the content itself, really can dilute and affect the quality of the experience. On the other hand, for Meta to deliver many of the services it does , it kind of needs to be paid, so as ever, it’s a trade-off, and one that applies to many other publishers. In a nutshell, advertising economically powers the service and enables the platform to provide free access for the user, and Meta wouldn’t even exist today if Facebook hadn’t used ad revenues to build its business.

“In Meta’s case. I’d also hazard a guess that external pressure to better manage what has become a bit of a “Wild West” scenario has pushed them to make what is ultimately a headline-making play by offering a “subscription equals no ads” option. One thing you can be sure of is that Mark Zuckerberg and his team will keep a close eye on the bottom line and that’s ultimately what will decide how this will play out.”

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