is digital advertising dead?
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Digital advertising took the marketing department by storm, but will it exit just as quickly? Thanks to sites such as Facebook and Instagram, companies have invested millions in digital advertising. But now that the market is as competitive as ever is it still worth investing in? Should companies keep pumping in money, or look to other media channels to invest in? See full blog post at:http://www.prorelevant.com/the-marketing-calculator-blogTRANSCRIPT
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The Death of Digital Advertising
R.I.P DIGITAL
ADVERTISING
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What is Digital Advertising?
Let us be clear, digital advertising will probably never die. It’s effectiveness will start to decrease, but will always be around as long as digital devices exist.
For some advertisers, there is still rooom to grow. For others, the digital market may be saturated and a broader mix of marketing channels is needed.
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What is Digital Advertising?
Some useful definitions:1. Digital Advertising: Any paid
display or search term advertising using the digital or mobile medium
2. Digital: Using a PC or Laptop to access the Internet
3. Mobile: Using a tablet or Smartphone to access the Internet
4. Shopping: The information gathering, brand building and price comparison phase taking place in-store or on the Internet
5. Purchase: The moment of truth for the brand when money changes hands, either in digital or mobile, or in a physical store
Let us be clear, digital advertising will probably never die. It’s effectiveness will start to decrease, but will always be around as long as digital devices exist.
For some advertisers, there is still rooom to grow. For others, the digital market may be saturated and a broader mix of marketing is needed.
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What is driving the industry?
Ad pricing increases, effectiveness per dollar invested decreases
As more advertisers invest more in digital advertising:
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What is driving the industry?As more advertisers invest more in digital advertising:
More clutter = Consumers ignore more ads
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Ad pricing increases, effectiveness per dollar invested decreases
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Continued…As more advertisers invest more in digital advertising:
Technology advances, however, with less and less incremental value for each new capability. Diminishing returns on the value of technology kicks in
Ad Networks
Re-targeting
Cookies
Pay per click
Attribution models
Diminishing Returns on digital advertising technology
Many different digital advertising technologies
Rela
tive
valu
e to
adv
ertis
er
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What is driving the industry?
Growth in consumers using the Internet, growing in developing countries, slowing in advanced countries
Consumer behavior is changing:
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What is driving the industry?
Growth in consumers using the Internet, growing in developing countries, slowing in advanced countries
Consumer behavior is changing:
Consumers are more informed shoppers through Internet information gathering
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What is driving the industry?Consumer behavior is changing:
Advertisers are improving their presences in the lower part of the purchase funnel
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What is driving the industry?Consumer behavior is changing:
Third party product comparison and reviews sites equalize the consumer’s power with the retailer
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Advertisers are improving their presences in the lower part of the purchase funnel
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Is it still worth the investment?Should marketers invest more money in digital advertising?
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Search:
1. If investment in SEM is not saturated, the brand can continue to invest and achieve linear growth. However, due to more and more clutter, there will be dimishing returns
2. If investment is already high, and saturated, the purchase of second tier words will lead to higher levels of dimishing returns on top of other effects
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Is it still worth the investment?
Search:
1. If investment in SEM is not saturated, the brand can continue to invest and achieve linear growth. However, due to more and more clutter, there will be dimishing returns
2. If investment is already high, and saturated, the purchase of second tier words will lead to higher levels of dimishing returns on top of other effects
Should marketers invest more money in digital advertising?
Display:
1. Depending on the current spend/saturation level the diminishing returns will be low or high
?
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What will happen now that the big brands are losing organic reach on Facebook?
Facebook paid reach:
1. Facebook continues to change their edge rank algorithm to their benefit, to the advertiser’s detriment. Good news for FB shareholders. Bad news for major advertisers.
Facebook ratcheted down the level of organic reach a brand can receive through admin posts. Brands must either pay for reach or they will go somewhere else to achieve the same level of impressions. This trend will continue thereby driving even more money and clutter into paid digital advertising. And it will continue to reduce the overall effectiveness of digital advertising.
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ProRelevant Marketing SolutionsPWe have an upcoming webinar series on this topic. If you’d like to learn more about how we can help you deliver successful product launches simply hit
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Guy R. Powell
Thank you
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