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Advancement of technology gives brands opportunities to get their products out there and take the business to the next level. Due to the increased improvement in telecommunication and automation, digital advertising has flourished. It has become a product of creation, of need, and is now a staple for businesses aiming to expand their reach.
Digital advertising, then online advertising, was such a new idea. It began on October 27, 1994, with a small graphic banner with the words, “Have you ever clicked your mouse right here? You will.” The day that banner ads was born was just the beginning. HotWired was a digital publication looking for ways to pay its writers. The plan was to sell parts of its website space called banner ads to advertisers. Advertisers would pay upfront costs to get the space for a certain length of time.
AT&T paid $30,000 for a banner ad that ran for three months. Its goal was to create a campaign that didn’t feel like an ad, but of a campaign that would offer valuable content to users instead. Users were transported to AT&T’s landing page when they clicked the banner. There were also other links that transported users to landmarks and museums all over the globe. The banner wasn’t just about selling, it was more of brand awareness. That was a defining moment for consumers, to know that they could go anywhere on the internet with a single click. The concept was mind-blowing and other companies followed suit including Time and CMP’s Tech Web.
Digital Advertising defined
Digital advertising is a process and a practice of publishing promotional materials using various platforms such as search engines, social media, websites, programs, and other online channels available. It is a targeted advertising strategy that aims to reach customers wherever they are on the Internet and connect with them directly. It enables brands to reach out to their audience and stay with them throughout the sales journey from awareness to purchasing. This method of advertising is today’s primary way for brands to increase brand awareness and promote the company altogether. Most, if not all organizations are now adapting and embedding digital advertising into their sales strategies to match the rapid changes in the market, regardless of the industry they are in.
Presently, digital marketing is more data-driven which allows brands to analyze the details of their campaigns. The data let brands make necessary adjustments and optimize their ad campaigns to have better outcomes. With the available tools today, businesses have more ways to engage with their customers and prospects and convince them to buy their products and/or services.
Digital advertising has several formats but most often, each type’s characteristics overlap with another that marketers use multiple formats as complementary tools. However, with changing advertising trends, more types and forms of digital advertising are to be expected every now and then.
Digital Advertising vs Traditional Advertising
Traditional advertising is a conventional marketing strategy to reach audiences using offline ads and other promotional methods. It comes in five categories: broadcast (radio, tv, etc.), direct mail (postcards, catalogs, etc.), telephone (messaging, telemarketing, etc.), outdoor (billboards, flyers, etc.), and print (newspapers, magazines, etc.). Although the methods have evolved through the years, traditional marketing is still grounded using the same things, the 4Ps’ – product, price, place, and promotions.
Traditional marketing continues to be an effective method but it is very limited when it comes to customer interaction. It is a one-way street and there’s no way for the marketers to know if their ads are effective or if they were able to turn people to customers. It is also limited in terms of customization options as it is nearly impossible to target the audience and tailor the ads to a specific group. Results aren’t measured easily in traditional marketing, there are no tools to effectively change live campaigns and optimize the ads for better performance.
As previously defined, digital advertising is an online process and is crucial in today’s market due to peoples’ use of technology. It includes social media marketing, PPC and SEM marketing, email marketing, affiliate marketing, content marketing, and more. Digital marketing levels the playing field for all business sizes and types, it allows small, midsized, and big companies to co-exist in the same digital environment.
Digital advertising today is focused on target ad campaigns. It’s about precise ads to reach the right market. Marketers tailor and optimize their ads to hit their market wherever they are. With digital marketing, one post can go a long way and reach thousands of people. There are tools that allow marketers to check the effectiveness of their ad campaigns and measure their data in real-time.
A business can use either of the two or pair them together to further improve the effectiveness of their campaigns.
Early Digital Advertising and its growth over the years
Digital advertising’s journey from creation to now is short but intense. For the last 25 years, technological innovations have pushed digital advertising into the frontline. It started with banner ads and now, it’s leaning into artificial intelligence. Digital advertising is regularly perfecting its goal of bringing the right content to the right people at the right time.
Digital advertising in the 90s
AT&T’s success in its ad banners was a great beginning but advertisers were hungry for ways towards specific targeting ads. WebConnect was the first ad network and worked with clients who want to know the websites that their customers frequently visit. Ads were placed on these websites to be seen by the relevant audience. Its CustomView Tool was created to avoid banner fatigue, the tool automatically changes the ad if certain users have seen a specific single banner ad for a number of times.
However, there was no tool to measure the effectiveness of banner ads and whether it drove results for the brands. Marketers were looking for ways to manage ad campaigns on several websites and how the ads interact with each other. Doubleclick created D.A.R.T (Dynamic Advertising Reporting & Targeting), an ROI tool to track the number of times an ad was viewed and clicked. It gave advertisers the ability to track ad performance and make changes to their live campaigns. Cost-per-impression is another advertising advancement in the 90s. It was a new pricing model that leaned into an ROI-based model.
The bane of the internet appeared in the form of pop-ads. It became a new trend as banner ads and click-through rates were decreasing. Pop-ads was a good idea then, it was a real solution to save the online advertising industry. Unfortunately, while it caught peoples’ attention, it wasn’t making revenue and because these ads were disruptive in nature, browsers quickly came up with features to block pop-up ads.
By the end of the decade, the Internet has been advancing at an unprecedented pace. Search engines were building momentum and advertisers were looking for targeted ads without annoying their consumers. The first pay-for-placement was introduced and advertisers started bidding for specific keywords.
Digital advertising in the 2000s and onwards
Investing in digital advertising in the 90s was almost unheard of but that quickly changed with the turn of the century. Investment in digital advertising increased in multiple folds over the years that by 2019, the total ad spends worldwide amounted to $333.25 billion.
Google AdWords and mobile advertising were introduced in the early 2000s. Google launched its Pay-Per-Click model as well. Unfortunately, mid-2000 saw the downfall of the dotcom bubble burst. The investment for online advertising dwindled and stocks of internet-based companies plummeted. The stock market collapsed and the recession followed. Google was among the few that survived and took advantage of the empty spaces left by the other fallen companies.
YouTube, the largest video advertising platform, was launched in 2005 and was later acquired by Google the following year. It offered brands and businesses a platform to promote their products and services in video form without costly upfront fees. Digital advertising in these years became more hyper-targeted as social media such as Facebook kept targeting consumers with relevant ads, thus opting for ad content relevance over volume.
BuzzFeed and Mashable introduced native advertising and sponsored content to allow brands to connect with their audiences. For sponsored content, marketers would pay news and media sites to create articles and other content and have it promoted to their website. Instead of a clickable ad, users get informative content on the host’s website.
Native advertising allowed marketers to produce content for the users’ benefit and online experience. A study on native advertising revealed that this strategy is much preferred over interruptive ads such as pop-ups and auto-playing videos. It’s unobtrusive and it ensures a better user experience.
Digital Advertising today
The rise of technology resulted in several advertising formats accessible today. Businesses opt to use multiple formats as long as it’s compatible with their needs. Here are some of the most common digital advertising formats now.
This format is compatible with most businesses and is more of a visual ad style in that it contains texts, videos, or images. Despite being one of the most common, it does play a huge role in reinforcing a brand’s messaging and story. Stats show that 70% of the time, site visitors targeted via display ads convert to the website advertised. Marketers pair up display ads with video ads to further increase brand awareness.
Native advertising is otherwise referred to as sponsored posts, it is intentional and focused on relevance. It is the least obtrusive of all the formats since users are only seeing the ads that they can connect with. There are five common types of native advertising: search ads, promoted listings, recommendations, and in-feed.
Consumers have been bombarded with too many ads that it has become their second nature to block ads. Nature advertising is a rising format as it prevents ad fatigue. Even when the consumers know it’s an ad, they are still likely going to click it because it’s relevant to them.
Social Media Ads
The Digital 2020 July Global Snapshot reports that 4.57 billion people use the internet and about 3.96 billion of them are active in various social media platforms. Social media is embedded in society, in every industry, and it is the home of most digital advertising formats. It is the most effective way to reach the audience far and wide and engage prospects and consumers regardless of the social circle. Some of the most popular platforms are Facebook, Instagram, Twitter, YouTube, Snapchat, TikTok, and others.
Search Engine Marketing
This format is the most reliable as it depends on the use of keyword data. In simplest terms, businesses buy traffic via paid search listings. Search engine marketing has three categories: pay per click, cost per thousand impressions, and cost per acquisition. Google Ads and Bing Ads are the most popular paid platforms available for marketers today.
Email marketing is efficient, cost-effective, and very targeted. Unlike other formats, the people brands are reaching out to are already interested in their products and services. It is important to build a mailing list as it allows for a more direct way to connect with consumers. Email automation tools provide marketers with tracking data to help improve their campaigns.
Video marketing is most popular among the younger audience. Study shows that over 50% of consumers prefer to see videos from brands over another type of content. Videos don’t only improve brand awareness, it also allows brands to educate, connect, and interact with prospects and customers. Some of the typical video marketing strategies include product demos, event videos, vlogs, webinars, personalized videos, testimonials, and more. Recently, salespeople use video marketing and integrate it into email marketing to bring in more people to their websites.
This format aims to reach audiences using their phones and other mobile devices. A total of 3.5 billion people use mobile devices and 62% of smartphone users make purchases using their device. Mobile marketing enables marketers to reach people wherever they are at a given time. To create a seamless user-experience using mobile marketing, brands need to adjust ad campaigns and adapt them to mobile-friendly formats. Google recently reported a Mobile-first algorithm and will start ranking websites via mobile versions. Keeping a mobile-friendly website will prove to be helpful for a brand’s mobile marketing strategies.
Current Digital Advertising trends
The advent of technology primarily on the internet and in telecommunications pushes digital advertising forward. Using video ads has been the trend in the previous year but marketers have found new trends shaping digital advertising today.
Consumers make purchasing decisions much faster and easier due to a plethora of available platforms and devices. There’s no need to go to a physical store to buy an item, a swipe is all it takes. Omnichannel plays a huge role in giving consumers a seamless purchasing experience as they transfer from one channel to another. 62% of companies plan on using this marketing strategy and 70% admit that this method is important to their overall marketing strategy. Marketers using omnichannel campaigns today have more engagements compared to those using single-channel campaigns.
Programmatic advertising was responsible for more than 80% of digital display marketing in the US in 2018 and it’s expected to climb to 86.2% by the end of 2020. This trend aims to change human negotiation with AI optimization and improve efficiency and transparency from advertisers and publishers. Software for programmatic automation isn’t limited to targeting keywords and geodata, it also targets signals to create more personalized ads. These data include lifestyle, behavioral habits, and other relevant information.
Pubmatic’s Global Digital Ad Trends report that 72% of advertisers plan to increase digital video ad spend between 2019 and 2020. This isn’t uncommon as video content has higher engagement and more click-throughs compared to ad banners. Texts and images can’t evoke the same emotions in a way that movement and sounds can. Videos, coupled with powerful call-to-actions, capture and keep the customers interested and hungry for more.
Marketers now focus on brand affinity over brand awareness. Netflix, RedBull, and MailChimp are some of the brands building brand affinity. While brand awareness is about people who know the brand, brand affinity is about people who care about the brand. The aim is to create opportunities to allow customers to develop an affinity for a brand’s products and services. Consumers aren’t just buyers, they are also advocates.
Browser push notifications
Mobile devices and gadgets make browser push notifications more convenient. These are clickable advertising messages sent to people who visit a website. Personalized push notifications generate up to a 7% open rate and result in a 54% conversion rate. The effectiveness convinced 85% of online stores to favor using this format than the traditional newsletter.
Contextual advertising is placing ad campaigns on websites relevant to the brand’s ad. This means segmenting ads based on certain parameters such as keywords. Contextual ads combine relevance, reach, affordability, and efficiency. Google is removing content identifiers soon but with contextual targeting, brands won’t have to worry where their ads go. Contextual advertising leads to very specific ads for specific site pages.
Overcoming challenges digital advertising face today
Digital advertising is facing serious challenges as the industry continues to expand. One of these obstacles marketers aim to overcome are ad blockers, death of third-party cookies, and increasing costs.
This challenge has been around since the early days of digital advertising but it’s becoming more concerning as advertisers are losing millions of dollars because of it. Ad blockers exist to make sure that ads aren’t displayed on screens, thus taking away brands’ means of putting their message out there. Advertisers find native ad campaigns a great solution to overcome ad blockers as it doesn’t trigger the adblocking software algorithms. Native ads are ads relevant to the site and often very similar to the site’s content as well.
Death of third-party cookies
Third-party cookie data lets advertisers learn about users’ overall online behaviors and use the data for retargeting ads. Advertisers have been using third-party cookie data to understand consumers’ interests, customize user-experience, and create targeted ads. Many advertisers are now looking for innovation and other forms of advertising to break their cookie dependency. Others are also
Businesses are putting more investment in digital advertising not only to increase their ROI but due to ads’ rising costs. Webmasters are raising the bar due to the significance of the traffic they bring into the websites. This may not affect the established companies but it continues to be a blow to start-ups and mid-sized businesses that want to play in the same digital space.
Businesses and marketers have to be smart in picking up the format to use in their ad campaigns and in how they consume their ad budget.
The future of digital advertising
Technology runs forward bringing digital advertising along with it. There will be rapid changes that will impact advertising’s ecosystem from the creative perspective to ad buying and show production to mechanisms and capabilities.
New data sources
Data will be more secured to prevent exploiting users’ privacy. This, however, doesn’t mean that data will no longer be used for advertising. Where third-party will be gone, other sources will surface including biometric and behavioral data, as well as voice samples. There will also be automated and AI-powered data to predict user behavior.
Personalization is already being used in ads today but it will be even more common going forward. Brands will integrate new apps to let the customers in on the ad campaigns not just as an outsider or a mere viewer but a part of the process. AR technology may be used to involve the audience or customers in a decision-making process on a certain product or service.
Audio/ Podcast advertising
Podcast advertising has an untapped potential with 73 million American listeners and this number is predicted to increase to 81% by 2022. Podcast advertising’s revenue growth jumped by 290% from 2016 to 2020, from $169 million it increased to $659 million in just under five years.
There are no ad blockers in podcast and unlike in other formats, podcast listeners aren’t annoyed with the ads. Rather, they find ads motivating and part of the program. IAB reports that 67% of podcasters remember the products and brands from a podcast ad and 63% of them decided to buy after hearing the podcast ads.
About 620 million people own at least one smart speaker device. Customers today are taking advantage of voice-command technology and have let it in their daily lives. It’s predicted that smart speakers will become more influential in the coming years.
Analytics and data measurement
Analytics engines change depending on the format. It is unclear whether new advertising formats will roll out in the next few years or whether there will be changes in the present formats to adapt to the customers’ behavior. It is a basic truth, however, that with every new format, there will also be new ways to measure its effectiveness.
Other trends coming to the digital advertising space is the appearance of 5G networks that would inevitably make streaming content via mobile devices much faster. Short-form video ads will also become more sought after with the increased data network.
Advertising isn’t everything, it’s but a piece of the entire marketing puzzle. Digital advertising is a great way to promote a business especially for start-ups and small-size businesses. It is important to find the right blend between formats and channels and experiment with different tactics to build a marketing strategy one format at a time. It is imperative to figure out the best option for the company, the products, and the consumers. Choosing one type and sticking to it isn’t advisable, discovering new cost-effective channels that yield good results is better.
Changes will always be present but relevance will never lose its worth. The goal is to use advertising strategies that uplift the brand’s value. The right approaches keep the company a success and an indispensable source of products and services.
Digital advertising definition
Digital vs Traditional
Evolution of digital advertising
Digital advertising formats
On social media ads
Current Digital Advertising trends
Future of advertising