Digital Advertising

Forrester says it’s end times for digital and display advertising

By Lisa Lacy | n/a

May 24, 2017 | 4 min read

A new Forrester report forecasts the end of digital and display advertising as we know it as consumers move away from experiences in which they can be interrupted.

That's in part because consumers are putting more trust in digital assistants to make decisions on their behalf, but, naturally, it’s also because US marketers wasted roughly $7.4bn on display ads in 2016 – only 40% of which were seen by consumers.

In a blog post, James McQuivey, vice president and principal analyst at Forrester, said the “bombshell” report “fits nicely into the current backlash against major publishers and ad networks, including Google and Facebook” as advertisers re-examine their digital spend and demand more transparency.

Forrester is encouraging brands to invest in relationships at the expense of digital and display advertising.

Forrester is encouraging brands to invest in relationships at the expense of digital and display advertising.

But McQuivey said bigger change is afoot “because interruptions are coming to an end” as “interruption only works if consumers spend time doing interruptible things on interruption-friendly devices”.

He went on to add: “Once they can get what they want without leaving themselves open to interruptions — whether through voice interfaces or AI-driven background services — they will feel even more hostile to ad interruptions”.

And it is consumers’ "casual indifference to advertiser interests" that McQuivey said will enable consumers to inhabit an advertising-free world. I.e., soon Alexa may answer most of the questions consumers have historically requested via search engines, plus digital assistants may collate and deliver highlights from users’ Facebook feeds, so they don’t see sponsored posts.

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“The question remaining is what role will marketers play in that hypermediated world,” McQuivey wrote.

The answer?

Marketers should focus on building deeper relationships with their customers in 2017 – in part by investing in relationship technologies such as those that offer a real-time, single view of the customer, plus artificial intelligence that drives conversational relationships, McQuivey said.

Intelligent conversational relationships are possible via chatbots, chat interfaces and voice skills on in-home devices, but marketers must also ensure the conversations “sparkle with the brand personality the CMO has committed the company to,” McQuivey said.

What’s more, McQuivey said this will take investment, but his advice is to pay for it with the billions of dollars used on digital display advertising.

“When they do [divert digital display ad budgets], that will signal to everybody that the end of advertising is upon us. And that something much better is on its way,” McQuivey added.

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