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Ulrich KramerManaging DirectorPilot Hamburg
The ad industry in Germany must contend with high rates of ad blocking despite new technologies for ad delivery. Ulrich Kramer, managing director of marketing and advertising firm Pilot Hamburg and vice chair of the digital media agency group Fachkreis Online-Medienagenturen (FOMA) at trade association Bundesverband Digitale Wirtschaft (BVDW), talked to eMarketer’s Marcus Plieninger about programmatic advertising, ad blocking and the importance of creativity
eMarketer: What is so important about programmatic advertising?
Ulrich Kramer: It’s a transformation of digital advertising that leads to significantly greater efficiency with trending topic models, new delivery models, quality control and quality optimization of campaigns. [One result of programmatic is it creates a] strong boost for digital advertising. The quality of each ad impression can be significantly increased, making digital advertising more competitive compared to classical analog advertising. This makes it more attractive for many advertisers.
eMarketer: What is the growth potential for programmatic advertising?
Kramer: Programmatic is already very strong in the area of performance marketing—for example, if you have an internet platform, such as online dating or ecommerce. I think the huge opportunity for growth in programmatic lies in the area of branding. If I am able to optimize premium ad impressions using programmatic with my own targeting and data, as an advertiser I can achieve better efficiency.
eMarketer: What are the challenges facing the online advertising industry in Germany?
Kramer: A major issue is ad blocking, which is widely used in Germany. That definitely has to be reduced because it restricts value.
eMarketer: Are there any solutions to this problem?
Kramer: We need to have new models. For example, putting up barriers for users who arrive on a page while using an ad blocker, preventing them from viewing any content.
We are going through a transition in that we are also seeing more and more paid subscriptions online. This means that the share of websites that are advertising-supported will decrease. Overall, I will have less inventory in digital advertising, but possibly a higher quality of targets.
eMarketer: What about the quality of the ads themselves?
Kramer: I think we need [to] push for digital creativity and creative quality because digital advertising on average does not excite users. Consumers should want to stick with an ad, enjoy watching it and interact with it. There are too few campaigns like that today. As an industry association, we are trying to support initiatives for better-quality creativity, in general, so that we see better creativity in digital.
eMarketer: So creativity is an answer to ad blocking?
Kramer: It will be a significant part of the answer. We should never annoy people. They should think that they might miss something entertaining or informative if they do not watch an ad. This would lead to less ad blocking and higher ad awareness and interaction rates. That is why creativity is important for us.
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