Throughout history, advancements in technology have played an important role in how individuals are exposed to new information. From the printing press, to radio, to television, and most recently, the internet, each successive innovation revolutionized and altered how individuals engaged with new concepts, products, companies, and brands. Yet, despite technological advancements, until the mid-to-late 1990’s most companies and brands relied on a linear and symbiotic way to reach consumers: traditional media companies sold advertising space to fund their operations and companies bought advertising space to reach consumers.
With the rapid growth and adoption of internet connectivity, the long-established advertising norms have been uprooted. Increased connectivity has resulted in the democratization of media; anyone with a good strategy, an internet connection, and basic web design skills is now capable of competing with multi billion dollar enterprises for views and advertising dollars. Moreover, the increased use of social media platforms not only means that people are accessing information in new ways, it also means they are no longer as reliant on receiving information through traditional mediums.
Due to the proliferation of new ways to reach consumers and shifting consumer habits, companies, brands, advertising firms, and media outlets have been forced to adapt and develop new ways to reach audiences. While Americans still spend about three hours a day watching television, the internet is not far behind, with most Americans spending about two hours online. Social media has also played an important role in impacting the how people access information, with Americans reporting they spend an average of 1.7 hours a day using social media. Globally, social media has experienced similar trends, with adults reporting having accounts on over 5 social networks. In recognizing the importance of the online world to reaching consumers in the United States, companies spent $15 billion more on online ads versus television ads in 2016. Although television still remains popular, its projected growth rate of 1.3 percent from 2016-2021, pales in comparison to projected online ad spending which is expected to grow at a rate of 9.9 percent during the same period. Perhaps not surprisingly, it’s been estimated that in 2017, companies will spend $204 billion on digital ads, an increase of over $50 billion since 2015. Additionally, combined spending on mobile ads and social media, non-existent 15 years ago, is expected to reach $55 billion dollars in 2019, an over five time increase from 2016 levels of $10.9 billion.
While the proliferation of new avenues with which to reach consumers has increased exponentially, it has not always translated into greater consumer engagement. Surveys have found that two-thirds of internet users viewed online advertising in a negative light, with users having used “annoying” and “distracting” as the most common ways to describe online advertising. Furthermore, many consumers are taking matters into their own hands to avoid unwanted marketing and using ad-blocker technology to filter out advertising; accordingly, in 2016 ad-blocker use grew by 30 percent.
The growth of digital advertising and its corresponding hurdles have spurred entrepreneurs to develop systems and processes to facilitate digital advertising, track results, and optimize effectiveness. In 2016, Adtech, or Advertising Technology, saw nearly $2.2 billion of investor funds flow into the sector. From interactive advertising, to personalization, to value-exchange, to native advertising, Adtech entrepreneurs are using technology to develop innovative ways to connect companies with consumers.
I had the opportunity to interview, Mitchell Reichgut, the CEO of Jun Group, a New York City based Adtech company that seeks to optimize the ability of brands and companies to effectively share content with potential customers. Mitchell and I discussed his business, the impact of technology on advertising, and his views on entrepreneurship. Hope you enjoy!
CG: Tell me about your company. What does Jun Group do?
MR: Jun Group gets millions of people to watch videos and visit web pages from Fortune 500 brands across devices. The word ‘Jun’ means truth and the world’s best-known brands trust us to connect them to their customers because everything we do is viewable, brand-safe, and transparent.
CG: What solutions does your company provide to brands and publishers?
MR: Our job is to provide clear, unfettered access to the people our customers want to reach. We are uniquely suited for this because our technology reaches over 100 million people in mobile apps where consumers spend 90% of their smart phone time. Instead of interrupting people, we allow them to opt-in to gorgeous, full-screen branded experiences. This produces some of the best results in the industry: 93% completion rates for 30-second videos, 100% viewability, an average of 3-5% of viewers take actions after watching (clicks to websites, social media actions, etc.), and less than 2% non-human traffic according to independent measurements.
All this is powered by value exchange, which lets people unlock entertainment, points, or other digital content in exchange for their time. Major ad platforms like Google, Facebook, Newscorp, AOL, and Pandora are all using value exchange to drive results for their advertisers.
CG: Technology has revolutionized how consumers interact with brands and companies. In your view, what have been the major changes impacting the advertising industry?
MR: Mobile applications have fundamentally changed the ad industry. People are especially intolerant of interruptions on their mobile devices because they are so personal, and the age-old precept of reach and frequency is becoming outdated. Additionally, advertisers can pinpoint specific people they want to reach on any device rather than relying on editorial environments to attract them. On one hand, these factors are creating more efficient advertising mechanisms; on the other, the power is shifting to consumers who are demanding more relevant and entertaining experiences in exchange for their attention.
CG: From your perspective, given the aforementioned changes and the rapidly evolving business climate, what should brands and publishers be cognizant of as they seek to promote their products and services to consumers? What strategies are most effective?
Along with all the opportunities and advances, digital advertising has major problems. Ad fraud is expected to cost advertisers over $16 billion in 2017 and we believe that’s a gross underestimate because so much fraud goes undetected. To enjoy the benefits of this new marketplace while avoiding its pitfalls, advertisers should follow three rules. First, demand complete transparency throughout the process: payments, placements, partners, and technology. Second, create content that is meaningful to people. It doesn’t have to be hilarious or outrageous, just relevant. Finally, ad context is as important as ad content—advertisers must carefully choose where and how to place their brands.
CG: Looking towards the future, over the next decade or so, how do you see Ad-Tech evolving?
MR: Digital advertising will become less interruptive and more relevant. Currently, anyone who can afford to pay about $12 per month can avoid ads on platforms like Amazon, YouTube, Netflix, etc. The onus will increasingly be on advertisers to provide value in exchange for people’s attention. Let’s not forget, though, that AM radio is still a popular and effective mass medium. New media will never fully supplant the old guard.
CG: Entrepreneurship is rife with challenges. What advice would you give to other entrepreneurs seeking to launch their own innovative, technology startup?
MR: When people ask me how to be successful in digital media, I ask them a question in return: how bad do you want this? Elite athletes, top academics, great artists, and successful businesspeople are typically willing to make deep sacrifices over long periods of time because they are passionate about what they do. Digital media is no exception. Work hard, stick with it, learn from mistakes, and the rest will take care of itself.
CG: Any parting words?
MR: I’ve enjoyed this conversation and I appreciate the opportunity to share my thoughts. Thank you!
CG: Thank you!