Banner ads on your mobile phone may soon be a relic of the past, according to a Microsoft executive.
Tejal Patel, the director of consumer engagement at Microsoft (MSFT), thinks ads that are not relevant to the smartphone user are going to go by the wayside. “Millennials … are likely to sacrifice their privacy. However, they’re not going to do that for banners. Why would you? There has to be a value exchange there: good contextually relevant content,” Patel said at Advertising Week Europe in London on Monday, and as reported on Business Insider.
“I think this whole word ‘banner’ shouldn’t exist, and probably won’t exist in three or four years, maybe less than that,” added Patel.
Last year, Microsoft started an exit from the display advertising business, detailing in a blog post that it was handing it over to AOL. In doing so, the company was gradually leaving behind a roughly-$74 billion industry that has been increasingly dominated by Facebook and Twitter. According to eMarketer, Facebook (FB) and Twitter (TWTR) will take 33% of the U.S. digital advertising display market by 2017.
Patel’s prediction comes at a time when mobile ad spending has become a huge part of the whole ad industry. According to eMarketer, mobile was likely to have surpassed desktop in display ad spending in the U.S. for last year, increasing from $9.65 billion in 2014 to $14.67 billion.
However, that growth could come to a halt if consumers continue to use ad-blockers, which take out the display of mobile ads that slow down page load times and are mostly irrelevant to the user. In a report by Adobe, it was estimated that 45 million active users had ad-blocking software installed by June of last year.