Google and Apple announce plans that will limit consumers’ exposure to online ads. Here’s a guide for what it means for retailers.

Udayan Bose, CEO, NetElixir

Udayan Bose, CEO, NetElixir

In the span of two weeks recently, the two largest internet companies, Google and Apple, announced ad-blocking initiatives that will have major ripples on the internet ecosystem. Retailers, who are increasingly looking at e-commerce as a vital revenue driver, need to pay attention to these changes, which will have significant impact on their online marketing.

First, a summary of what happened. Even though the outcome of the initiatives means fewer advertising options on the web, it’s important to understand the specifics. Apple has historically been the more privacy-focused tech giant. It has always blocked cookies on its Safari browser and doesn’t store data for as long as Google, Amazon and the rest. Apple doesn’t even share contact information of iOS app users with app marketers.

Apple’s new ad-blocking plans are not so much about blocking ads as keeping its core privacy practices in place and continuing to keep consumers’ information as private as possible on Apple’s Safari browser.

In early 2018, Google plans to introduce a new version of its Chrome browser that will automatically block ads on certain sites.

Google’s initiatives have less to do with privacy and more about user experience, presenting retailers with challenges and opportunities to gain customer attention online.

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In early 2018, Google plans to introduce a new version of its Chrome browser that will automatically block ads on certain sites that show ads in disruptive ways. This includes pop-up ads, auto-playing video ads with sound and take-over ads. Google is working with the Coalition for Better Ads to determine which types of ads to block. Google’s ad-blocking capabilities apply to both the desktop and mobile Chrome browser, affecting the consumer experience on both.

While this step is definitely pro-consumer, it’s also a clear business move that allows Google to be out front on two important industry trends: ad blocking and the rise of mobile.

Ad blocking has been steadily growing, especially among millennials and Gen Z. Google already pays AdBlock Plus—the most popular ad blocking tool on the market—millions of dollars to unblock its ads. By incorporating its own ad-blocking capabilities, Google is hoping to win back some of this lost revenue and the support of these two generations.

Google might also be able to enhance the mobile customer experience with this move by not only eliminating annoying ads, but also by treating the mobile customer better. Over the last 36 months, Google has come out with major changes to its algorithms with mobile in mind, like AMP pages for faster page loads and higher SEO ranking for pages that are more mobile-friendly. Google knows that mobile is the future and is trying to optimize the mobile user experience.

This is important as we have seen that over 40% of consumers immediately exit a mobile site if they’re not engaged. Desktop users are more patient. Google’s ad-blocking functionality on mobile may help curate content that is more contextually relevant to the user and block content that is less appealing.

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The Impact on Retailers

Retailers will need to reengage and reevaluate their digital marketing campaigns to conduct responsible advertising. Gone are the days of mindless display advertising, optimized towards gaining impressions without any concern for the end user. However, Google’s ad-blocking initiative will not block all ads. Google will only block ads that don’t follow the guidelines set out by the Coalition for Better Ads. To pass through Google’s ad filter, retailers will need to think carefully about aligning the consumer experience with their display strategy.

Of course, this is easier said than done. For starters, retailers will need to limit the reach and frequency of their ads by carefully selecting where and when to place media. Marketers need to transition from a “spray and pray” approach to more responsible and targeted forms of digital marketing. Careful analysis of existing customer journeys and the use of new Google tools like Attribution 360 can aid retail marketers in making these decisions.

The stricter prohibitions on digital ads will also lead retailers to focus more on in-app advertising efforts, since apps are not impacted by the ad-blocking measures. This push coincides perfectly with changing consumer behaviors. Through our LXRInsights analysis, we have seen mobile purchasing increase steadily over the past few years. Just this past Mother’s Day, we saw purchasing within apps like Facebook and Instagram increase by 18%, indicating that consumers are becoming comfortable making on-the-fly purchases on the two platforms.

Beefing up search marketing for top-of-the-funnel marketing efforts is another way retailers can stay in front of users. Lots of retailers use display advertising to market to consumers early in their shopping journey. This means that marketers are relying on display to drive brand recognition and discovery. With Google’s stricter rules, retailers should consider turning to search marketing, which is not affected by the ad-blocking initiative, for top-of-the-funnel marketing.

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Furthermore, our research continues to demonstrate that consumers turn to search as one of the primary ways to discover and research products. And while many retailers and brands turn to display advertising as a branding tool, marketers should look to search tools like PLAs [Product Listing Ads, a Google search advertising option] to compensate for the loss they will likely experience in their display advertising campaigns.

Beyond the tactics, the best way for retailers to maintain successful digital advertising campaigns is to explore their own data to gain a deeper understanding of their customers. The industry has been talking about the importance of applying customer journey analytics to gain insight into customer engagement. With Google’s and Apple’s moves, this can no longer be a hypothetical conversation or a far-off ambition. Following consumers along their unique journeys across desktop and mobile devices is now critical to garnering a share of their attention and wallets.

NetElixir provides search marketing services to nine of the Top 1000 online retailers in North America, according to Top500Guide.com.

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