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The Internet Learns What Radio Already Knows: Consumers Prefer Ads Over Subscriptions.

Advertising is the price of admission for not only broadcast radio, but also the internet and the vast majority of the most-used mobile apps. It is a tradeoff that is currently being tested as more digital companies throw paywalls up or start to add commercials to streaming services that also charge a subscription fee. A new report from the Interactive Advertising Bureau is shedding some light into where consumers are in 2024, and the data offers some encouraging news for any company relying on ad sales.

The IAB survey finds that nearly eight in ten (78%) consumers would rather receive more ads than pay for digital content and services. And seven in ten (69%) agree it is a fair trade-off to receive ads in exchange for free services. The IAB report also says that nine-in-ten consumers would be frustrated, disappointed, angry, confused, or sad if they had to start paying for websites or apps that are currently free while 95% prefer to get ads than pay a high fee to avoid advertising. For the most part, the IAB Says consumers understand advertising’s key role in keeping the internet free and open.

“Four-fifths of consumers agree that websites/apps are free because of advertising. However, Gen Z, for whom the internet has existed all their lives, is less likely to agree than the other generations,” the report says. “Instead, Gen Z is twice as likely to believe that websites/apps are free due to ‘altruistic reasons’ such as being considered free speech or a basic right (26% vs. 12%).”

Advertising may be preferred to subscription prices, but the IAB’s first-ever consumer privacy study says there is also a responsibility on marketers. Nearly nine-in-ten consumers said that they prefer ads relevant to shopping (88%) and those are the ones they’re more likely click on (87%). The data also shows 88% prefer ads for products or services they are interested in or are shopping for, while 87% said they are more likely to click on ads to learn more or to make a purchase for products they want to buy.

That is becoming more difficult as marketers are facing the loss of the tracking cookie, with many shifting to new metrics like their own first-party data. Half of consumers (49%) think that websites/apps do not give enough information regarding how their data is used and protected with older generations more likely to agree. The good news for brands is that although 85% feel it’s important when websites or apps tell them the specific data they share, roughly two out of three consumers will share personal data regarding their preferences, interests, and habits so they can receive more personalized content and services, get better deals, and see more relevant ads.

"Contrary to what some believe, this research unequivocally shows that consumers are aware of the value exchange between their data and personalized content and ad experiences.” said David Cohen, CEO of IAB. “The ad-supported internet is good for consumers, it’s good for society, and it democratizes access to information and entertainment."

When asked what concerns are top of mind regarding how websites and apps collect and use data, the IAB says criminal activity and selling/sharing data are the top concerns while ad targeting is of little-to-no concern.

“This is an opportunity for advertisers to communicate and develop a clear value exchange with their audiences,” the report says. “Consumers want to feel comfortable with the websites/apps they share their personal data with. Comfort stems from knowing the website/app’s reputation, having experience using it, knowing the type of data further shared, and having the ability to control collection and storage.”

Overall, when asked what someone would have to pay them to stop using it, consumers said they value the total internet at $38,000 a year: for perspective, that’s more than half of the real median U.S. household income. But while Boomers value the internet at $29,000/year, the value to Gen Z was nearly double, at $54,000 a year.

“We need to make it clear that consumers — especially Gen Z — understand the value of the ad-supported internet and wouldn’t want to live without it,” Cohen said.

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