Digital ads transformed the advertising game in many respects. Today, we’ll discuss that transformation and what it means for your business.
Advertising is the oldest and most common aspect of marketing. In fact, when you say marketing, many folks assume you’re talking about advertising but the terms aren’t synonymous. Instead, advertising is a piece of marketing, a critical piece, but not the whole. In addition to advertising, marketing includes product, pricing, and distribution that all contribute to creating value for customers.
If you have a good product at a reasonable price that’s freely available, then advertising is the best way to get the word out to lots of people at once. Having said that, the more traditional ways of advertising don’t have the same appeal they once did and most businesses are in the process of shifting much of their advertising spend to digital ads. Things like TV and print ads still exist – and can be effective in some ways – but they are being surpassed by another medium that’s transforming the way businesses advertise and promote themselves. Check out recent data on digital spending versus money spent on traditional advertising to see the trend of increasing digital ad spend over time, something predicted to continue into the future.
As you can tell by the title, we’re talking about digital ads. This is a category of ads that refers to things like Google Ads, social media ads, ads you see on streaming sites like YouTube, and so on. Digital advertising isn’t new but recently became even more prevalent and is now pushing out traditional advertising.
Why this transition to digital adverting? And, has the use of digital advertising transformed the very nature of advertising forever? These are the questions we’ll answer today. So, read on.
Why digital ad spend is increasing
Improved targeting
Arguably the best thing about digital ads is that they give you much better targeting capability than any other form of advertising. With TV, radio, or print ads, you don’t have much control over who sees your ads. You can choose which channels to advertise on, and what time your ads show, even which programs include your advertising, but you don’t have more granular control over who sees your ads. The same with print ads; you can pick where to place them, which does provide better targeting, but it’s still a far cry from what you need unless you’re a mega brand with little differentiation in your target market. Coke is a good example of a firm where targeting doesn’t add much.
Because traditional advertising reach is vast, you must pay to reach a bunch of consumers when many of them don’t match your target market and that’s wasteful. The lack of selectivity can also damage your brand by sharing a message designed for one audience to another that finds your ads annoying, or worse, present your brand in an unflattering light to them. Further, the role of personalization in advertising is growing in importance for consumers. They want to see messages designed for them as an individual and this is impossible in traditional advertising.
Digital ads let you specifically choose who sees your ads by setting certain parameters. For instance, with Google Ads services, you can choose to advertise based on certain keyword searches used in search queries, ensuring that your ad shows only to people searching for a business or service like yours. Recent changes to Google Ads allow advertisers to layer user characteristics on top of keywords. For instance, you can show your ad when queries contain your chosen keyword but only when users search from a chosen location or demonstrate certain demographic characteristics. Cookies also play a big role here, as well, since you can present ads to people online based on their browsing history. Since queries often reflect an immediate need for specific information or show a purchase intention, advertising through Google Ads improves conversion, which we’ll discuss in the next section.
In social media, you choose who sees your ads based on the characteristics of your target market. Not only can you choose who sees your ad based on geographic and demographic characteristics but more nuance and critical elements such as interests and lifestyle that represent key targeting factors.
Direct advertising is somewhat of a transitional advertising strategy sharing some positive features with traditional advertising and offering some benefits available through digital advertising.
Increased conversions
Because you can target your audience more selectively, you only pay to reach those people most likely to convert, which increases the ROI of your advertising significantly. Thus, instead of paying nearly $6 million for a Super Bowl ad to reach millions of eyeballs, you can spend a few thousand dollars to reach those most likely to purchase your product. When you consider your ad must reach your target audience multiple times to drive conversion, the cost is magnified.
You see more conversions because you’re advertising things to consumers that are already interested in what you offer. Someone might search for SEO services one day, then see an ad for an SEO company in their search results. It’s relevant, so they’re inclined to click it. With retargeting, you selectively show ads to those who already show interest by, for instance, visiting your website resulting in higher conversion rates. With traditional ads, it’s harder to show relevant content to the right audience, making conversions harder to come by.
What brands really care about in their advertising campaigns is the cost per conversion. We already showed how, by reaching the right people, you spend your advertising budget selectively on those most likely to convert. But, unlike with traditional advertising where you pay for folks who pay attention to your ad as well as those who left the room during the ad or threw away the newspaper without ever seeing the page containing your ad, digital advertising charges you only when someone clicks on your ad (PPC or pay per click advertising) or when your ad is served to them on a social platform.
You drive measurable results
Lastly, digital ads have absolutely changed the way we monitor and review advertising campaigns. Because of the way they work, it is so easy to track and measure every metric to determine what’s working and what’s not as well as fairly accurately measure the ROI of your campaign. You can literally see how many people click an ad and what they do after.
With traditional advertising, it’s hard to gain this concrete evidence that you generated a return. Someone might see a TV ad and buy something from you because of it – but how do you know?! We call this lift and it results from a host of external variables that impact purchase decisions so it’s impossible to determine that lift was the result of your ads.
Digital ads remove the guesswork and provide concrete facts that let you measure success.
Conclusion
The bottom line is that all good businesses need digital ads as part of their marketing strategy. They help you spread the word about your business and increase brand awareness, helping to pull in new customers and leads at a reasonable cost and metrics help you optimize your campaigns.
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Hausman and Associates, the publisher of MKT Maven, is a full-service marketing agency operating at the intersection of marketing and digital media. Check out our full range of services.
