Is advertising failing marketers again?
The age of digital advertising was supposed to offer the holy grail to marketers.
Lower barriers to entry to reach consumers. Highly targeted ads. Clear measurement and performance data. Personalization at scale delivering relevant advertising.
To be sure, some of these have come to bear. Small upstarts are able to be in the game because of digital channels. Marketers can reach specific targets and individuals.
Yet, there continues to be challenges with digital marketing, just as with traditional channels. For example:
While there is data to support performance, marketing attribution can be tricky to unpack.
Not all advertisers are at a level of sophistication, nor have the data, to deliver highly personalized ads. Most also don't have a closed loop system, so instead consumers end up seeing retargeting ads pitching products they’ve already purchased or are irrelevant to them for whatever reason, leading to frustration.
What’s more, according to Deloitte, 80 percent of Americans are using some form of ad blocking, 31 percent have ad blockers on their computers, and 20 percent have them on their mobile device. So, targeted ads aren’t always being seen anyway.
Thus, you end up with low clickthrough rates (which can vary as shown here, but on average hover around only 1 percent). Exchanges may be able to place your targeted ads, but consumers aren’t engaging with them.
Sure, it’s been shown that personalization can increase ROI, but not doing it right can result in the creep-factor. Or, companies can unintentionally offend, as this Axios article highlights with regard to Netflix and its personalized movie images on a user’s home page.
Add on top of this all the issues the ad industry is having with fraud.
Consider:
Marketers can’t trust where advertising is being placed.
There are people committing ad fraud, illegally charging for ad views, with the Justice Department recently catching some culprits.
Digital malware infects 15 to 25 percent of web sessions showing unauthorized ads.
So, is it any wonder that more 1:1 relationship marketing has taken root, such as with content and influencer marketing? Yes, there are other factors at play that are driving these trends, too, such as the distrust of institutions by consumers and the desire for brands to be more human. Yet, if marketers can’t trust how and where their ads are being placed and consumers don’t like being targeted with them to begin with, it’s not surprising that marketers are searching for better ways to engage with consumers more authentically.
What’s the net takeaway?
Marketers need to be more discerning users of digital marketing tactics, while creating alternative channels that are more acceptable to and connect more deeply with consumers. It also means marketers should continually test and measure new channels and vehicles to ascertain which are most powerful and effective for one’s brands and businesses. For example, marketers should test new channels that align with shifting shopping behaviors, such as chat bots or platform algorithms. In so doing, marketers can optimize their marketing mix to the highest ROI channels for their business, rather than just assume digital marketing is the place to be. It’s not to say that digital marketing should be avoided altogether, but marketers need to jump into the fray with their eyes wide open, measuring results, and adjusting their mix to drive efficiency for their brands.