Is Digital Advertising Effective?

23 October, 2019

Is Digital Advertising Effective?

The short answer is, yes, it is.

For the longer answer, let’s consider this bit of information from research firm eMarketer: digital advertising expenditure in the United States will increase to $129.3 billion this year. Whereas advertising on television, billboards, newspaper, and other venues considered to be “traditional advertising”, will instead decrease to $109.5 billion.

One method is seeing an increase of 19.1% this year while the other will fall by 19%.

What’s more, 2018’s results showed that traditional advertising was still leading digital advertising spending by $6.2 billion, whereas this year, digital advertising will take a lead of $19.86 billion.

Now, one can definitely argue that just because companies are spending more money on digital advertising, that it doesn’t necessarily address the question: Is Digital Advertising Effective? 

So, how effective is Digital Advertising?

On a survey they did this year, Blue Corona found that 49% of the people surveyed stated that they do click on PPC (Pay-Per-Click) ads. These are the text ads found on a search engine’s result page. On Google it may be found at the very top of the result page.

Blue Corona also found that for every $1 spent on Google Ads, they make an average of $2.

And in a different survey, this time conducted by Search Engine Land, 63% of respondents said that they would click on a Google Ad.

And Google and Facebook are still the dominant players in the Digital Advertising game, though eMarketer did note that while Google’s share is still number one, in terms of growth, it’s actually declining. Facebook’s share grew 22.1%.

However, the player to watch is Amazon, thanks to its growing advertising platform, Amazon DSP. Unlike Google and Facebook, Amazon possesses a wealth of real-time purchase data thanks to its site. This gives Amazon DSP an edge in terms of providing businesses with consumer buying habits.

Not even Google or Facebook is able to have that type of data. At least, not without first partnering with a partner in retail.

Types of Advertising Matters

To increase the effectiveness of digital advertising, of course, is to make sure that you’re choosing the right type of advertising in the first place.

If you’re a local plumbing services business, you may wish to focus on text ads, for example, and opt for local search, considering the limitations of your business. This type of business may also choose Google’s Search Network.

Whereas an ecommerce can choose the Google Display Network and they may even choose Shopping Ads that will make it easier for an interested customer to purchase their product.

Businesses with their own mobile application, for example, also use mobile advertising or even video advertising to market their app. And a Hubspot survey in 2017 revealed that 54% of consumers would actually like to see more video advertising for a brand or business that they like.

What’s more, the study found that more people paid attention to video content whereas they were more likely to skim other types of content.

The Trouble with Ad Blocking

Perhaps one of the biggest issues with digital advertising—one that may cause a business owner to reconsider placing an ad online—is Ad Blocking. In 2018, Statista reported that Ad Blocking in the US has increased to 30% from 15% from 2014. However, eMarketer released a report at the end of July 2019 that stated that while Ad Blocking is still growing in the US, its rate of growth is actually slowing down. In fact, eMarketer predicted that its growth rate would fall to 3.3% in 2021, in comparison to 2018’s 7.5%.

The eMarketer study also noted down some interesting things in terms of why users—this time in the UK—decide to use Ad Blocking.

And it’s also the 25-34 age group that seemed to mind the least when it comes to advertising. If anything, only 47% of that age group found too many ads to be annoying or irrelevant, compared to 16-24’s 48%, 35-44’s 55%, and 45-54’s 66%. And it’s the 55-64 group that seems to dislike ads the most, with more than 75% finding them annoying.

A lot of the respondents disliked ads that are too intrusive and ads that take up too much screen space. They also tend to use Ad Blocking because they dislike the video ads that usually appear before a video clip or a show.

Final Thoughts

But, let’s face it, consumers in general don’t like ads. Whether they’re advertising on television or a magazine or online, advertising in general are disliked.

However, digital advertising does have more to offer than traditional advertising. To an interested user, a digital ad increases the likelihood of a click and then a conversion. Seeing an ad on TV may or may not prompt a consumer to buy the product online straight away. But seeing a digital ad during a search for a particular product will increase the chances that the consumer would end up purchasing their product.

So, to go back to our initial question: is digital advertising effective? Yes, it is, indeed. Contact us if you need a strategic partner to make your digital advertising more effective!

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Copyright ©2020. Crubiks Inc. All Rights Reserved
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