'Digital natives' savvy about internet advertising; but challenging times ahead
IAB and Price Waterhouse Cooper research released recently has shown that digital advertising spend has risen 12.6% in the first six months of 2012 to hit £2.6billion.
While on the face of it this continued growth suggests the digital display sector is getting a lot right, IAB and ValueClick research carried out earlier this year points to changing consumer attitudes towards display advertising, as digital natives grow older and start to dominate the overall audience.
The IAB and ValueClick research surveyed 2,001 internet users across the UK, aged 16+, both online and offline and found that attitudes to online advertising vary considerably according to age. In fact when it came to questions about acceptability, interest and understanding of online advertising, 16-24 year olds answered more positively than 25-44 year olds, by a margin of between 5 and 10%.
This gap illustrates the difference between the digital natives - those who have grown up in a world immersed in technology and older consumers who haven't. 16-24 year olds are also the most receptive towards internet advertising, with 40% stating they had purchased a product or service because of an advert they had seen online, compared to just 24% of the 55+ age group.
Looking ahead, views about online advertising are likely to become less differentiated across the age groups, as 'digital natives' grow older and increasingly set the tone of consumer attitudes to online advertising.
The research found that 48% of 16-24 year olds agreed with the statement: "Recently I have seen an increasing amount of advertising that is relevant to my interests", compared to just 17% of 55+ year olds, signifying that the younger demographic are looking for display advertising that is targeted towards them.
While this bodes well for the future of digital advertising, the research also suggests that younger audiences are savvier about behavioural targeting, retargeting and performance optimisation technologies than older age groups and want to find out more about how the technologies work.
For example 41% of 16-24 year olds want to know more about how advertising is made relevant to them, compared to just 26% of 45-55 year olds. Meanwhile 58% of 16-24 year olds are happy to see advertising based on previous web browsing.
Younger audiences are also likely to be harder to please. 61% of 16-24s agree that they are "happy to see relevant online advertising" as long as it means the sites they visit provide quality content, while 63% of 16-24 year olds would rather see advertising that is targeted to their interests.
So what do these findings signify for brands looking to engage with consumers online?
Digital audiences will increasingly want to engage with online advertising, they will have greater understanding of how targeted advertising works and are likely to be much harder to please. Brands will need to be increasingly sophisticated about how they target and engage with consumers online and ensure they are transparent about what they are doing and why and how they are doing it. Working with consumers to deliver brand messages that are relevant to them and helping them avoid those that aren't, will increasingly be the way forward for brands.