5 Minute Read
Digital advertising is in a state of critical flux. Concerns over AdBlock, the rise of ad fraud, and the eclipsing of traditional channels are shaking up the industry. With more money going into digital ads, it’s no wonder controversy continues to fester and brew.
Transparency and trust are at the heart of advertising woes. Marketers want to know where their dollars are going, and digital natives are avoiding ads for obvious reasons. This environment means CPM is pretty much a pointless standard, and marketers should focus their strategies on hard conversions that bring in revenue.
Before jumping into these stats, I want to remind the reader to always conduct their own research. Some of these figures are projections, and some surveys have small sample sizes. Nonetheless, here’s what we know:
- There are now around 200 million people who use AdBlock worldwide. Most ad blocking occurs on desktop, but mobile users are quickly picking up on the trend. (Business Insider)
- Lost revenue from ad blocking will likely cost around $20 billion in 2016. (MarketingLand)
- “30% of current AdBlock users were open to some types of advertising. Intrusive ad formats were the key reason why they chose to block ads. (Adobe)
- “61% of adblockers on average are completely unwilling to receive advertisements packaged with the content they consume.” (Adobe)
- A survey of fifty advertisers found that Google AdWords CPC rose from $.92 in 2013 to $1.58 in 2015 During the same time period, the cost of conversions virtually quadrupled from $10.44 to $44.50. (Hochman Consultants)
- Advertisers will lose 7.2 billion dollars to bots in 2016. (Association of National Advertisers)
- 60 percent of online traffic in 2013 was comprised of bots. (The Atlantic)
- Only eight percent of display ads are viewable by real people. This is a great guest blog post, I highly recommend the read. (MOZ)
- More than 50 percent of video ads aren’t seen by a real person. (The New York Times)
- This survey finds that people tend to get confused between the difference between content and a native advertisement, “In four of the six groups shown a native advertisement, the majority interpreted the piece as an article.” (Contently)
- “By 2017, social network ad spending will reach $35.98 billion, representing 16% of all digital ad spending globally.” (eMarketer)
- “Digital ad spending will grow 17.2 percent this year, to nearly $160 billion, and 13.5 percent in 2016, and is expected to overtake TV as the biggest advertising category by the end of 2017,” (The New York Times)
- “More than two-thirds (68%) of marketers and agency executives expect to see their digital video ad budgets increase in the next 12 months.” (Interactive Advertising Bureau)
- The average person spends more time online than watching TV. (Branding Bricks)
- “The report finds that for every dollar of expense, SMBs spend 14 cents on advertising. Planned growth areas include (but are not limited to) websites, social media, mobile advertising, display advertising, paid search, and search engine optimization. (MediaPost)
- Senior level marketers are planning to up digital marketing spending by 12.2% while reducing traditional marketing by 2.1% in 2016. (CMOsurvey.org)
- The CTR of display ads hover around 0.06%. (Hubspot)
- Website visitors are 70% more likely to convert after being retargeted with display ads. (DigitalInformationWorld)
- Native ads are viewed 53 percent more than display ads. (DedicatedMedia)
- Native ads that contain rich media increase conversions by 60%. (AdWeek)
- “Nearly two-thirds (65%) are set to spend more money on programmatic advertising in 2016. The survey also found that 78% of B2B marketers will spend up to 50% of their budgets on programmatic in 2016.” (MediaPost)
These findings are counterintuitive. Less people are seeing digital ads yet spending continues to increase. For a marketer, it’s like throwing a coin into a wishing well and asking for more wealth. The simple fact is that the average person is bombarded with content, ads, and information; and all of those things are effectively useless unless they provide direct value to the viewer or reader. The future of advertising hinges on the combination of nuanced methods, creativity, better data collection, and delivering a personalized experience.
Thanks for reading!