Digital Advertising Case Study

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Digital Advertising: Does the Market Have Sustainability? Advertising is a key marketing method for businesses to increase revenue and name brand recognition. The concept of advertising in the United States really started in the late nineteenth century; however, it failed to break out as a widespread mechanism until the advent of the radio (Karr, 2012). Up until that point, advertising in newspapers was the most predominant form of it. The radio was the first form of technology that had the capability, specifically the pervasive reach to have a positive effect on consumers. Ads were sprinkled in between radio programs, but in general they were very short and were not run continuously for long intervals. The next form of technology that…show more content…
Facebook is at the heart of this dilemma as advertising makes up about eighty-five percent of their income despite having low hit rates in terms of targeted advertising (Cicconet, 2013). They are able to succeed largely due to their sheer volume of users or eyeballs on ads, but as a model for other aspiring startups that may never be able to reach Facebook’s size; the question should be asked if this advertising model can truly be sustainable long term, across the industry. With tech startup’s valuations at extremely high levels despite little to no revenue at all, the question of the sustainability of the online advertising model needs to be asked because we could potentially be approaching a stock market tech bubble similar to the dotcom bubble of 2000 (Heskett, 2014). This is why it is necessary to examine how customized ads are being incorporated to determine if the whole service is smoke and mirrors or just a plain…show more content…
Advertisement blocking software is quietly an increasing threat to the digital advertisement industry, both online and mobile (although much more prevalent online). This ad-block software prevents consumers and social media users from viewing any advertisements at all. For example, a Google banner ad at the top of the screen or a YouTube video ad will not appear on a website for a user that has the add-on software downloaded. At this point, young, tech savvy users are generally more likely to be aware of the existence of ad-block and actually use it. A recent report by Pagefair, a company that identifies and records ad-block usage on websites, stated that about twenty-three percent of web surfers are employing some type of obstructive software and overall usage is increasing at a clip of forty-three percent each year (Hill, 2013). “The pool of people who will accept ads is smaller and smaller and those ads get more aggressive and intrusive to target them, and then those people get annoyed and seek out ad blockers” (Hill, 2013). This spells out major trouble for businesses that rely heavily on online advertising
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