Monday was a very tough day for Snap Inc.’s Evan Spiegel, the company’s CEO, who warned employees of slowing growth in a company-wide memo. The news really shook up the digital advertising industry because it brought to light that numerous companies are starting to reduce their budgets for digital ads. The digital ad industry has been experiencing a downward spiral for years now; due to issues like tone deaf messaging, lack of transparency in reporting, privacy regulations and more. This has basically been a long time coming.
The purpose of advertising has always been two-fold: to inform potential customers about the products and services that a company has to offer, and to convince them that these products and services are the best available. With the advancements of technology, advertisers now have a tremendous opportunity to reach a vast audience with a company’s message. However, it can be difficult to prove that online advertising is effective in driving sales.
Google, Facebook and Snap have made billions off digital advertisement and now that has slowed down. In addition to this, the consumer has become conscientious about their privacy; which now is evolving into a business in itself. Businesses are now looking for a more direct approach reaching consumers. One potential solution is a direct-to-consumer model that offers rewards for information, time, and engagement. This approach would provide valuable data to businesses while also giving consumers a tangible incentive to participate. With traditional digital advertisement seeming less effective by the day, this could be a way for digital advertisers to stay ahead of the curve.