Investis Ltd.

02/22/2024 | Press release | Distributed by Public on 02/22/2024 10:48

Is Your Digital Advertising Going to the Right Places

U.S. digital ad spend is higher than ever, at $270.24 billion. But are advertisers spending their money in the right places? Recently released eMarketer data suggests they might not be.

According to eMarketer, advertisers are spending an inordinate amount of money on destinations where consumers spend less time:

This data jumps out at me:

  • Meta captures about 20 percent of digital ad spend even though consumers spend only 7.6 percent of their time on Meta platforms. By contrast, advertisers allocate only 5.8 percent of their spending on YouTube even though consumers spend 7.5 percent of their time there.
  • We all know TikTok has taken the world by storm, but it's still in its early stages of growth, incredibly enough - commanding less of our time than Meta and YouTube (perhaps befitting the short-form nature of TikTok videos) and even less ad spend. There is plenty of room for advertisers to grow their presence on TikTok, but the app has only recently become a serious advertising play.
  • Consumer attention is fragmented and getting shorter, according to eMarketer. Consumers are spending less time-consuming content on each page, and the number of apps they are using is decreasing.

Meanwhile, not all forms of digital advertising are growing at the same pace. Retail media networks (Amazon Ads, Walmart Connect, etc.) took five years to surpass $30 billion in ad spend. By contrast, it took search 14 years and social 11 years to hit those milestones. It's easy to see why retail media networks are growing. They can capitalize on the first-party data that their parent companies collect about their customers to serve highly targeted ads to their customers. At a time when third-party cookies are dying, first-party data is more crucial than ever.

What Advertisers Should Do

So, what should advertisers do about these trends? When considering how to interpret this platform engagement data, you first need to remember that digital marketing is not a one-size-fits-all approach. These insights should be taken with a grain of salt and layered with an understanding of your audience and business objectives. Use the engagement data directionally to see how users are consuming media, since your experience needs to account for the consumer demand. If a specific platform does not align with your core audience, think of this as an opportunity to either expand into new areas or take the learning of TikTok for example, that users enjoy consuming more short-form videos.

Strategies are only as powerful as the tools used for analysis to build a strong foundation. So, get informed and consider the below when assessing your 2024 budget allocations:

Shift Spending Towards Platforms with Higher Engagement

  • Reassess budget allocation: Analyze your current ad spend across platforms and compare it to user time spent on those platforms. Consider shifting
  • Experiment with TikTok: With its growing user base and short-form video format, TikTok presents a potential goldmine for brands. Start experimenting with ad formats on the platform to reach new audiences and test its efficacy before committing to larger budgets.
  • Invest in first-party data: As third-party cookies become obsolete, building and applying first-party data collected through your website, app, and customer interactions will be even more crucial for targeting ads effectively than before. Explore tools and tactics to gather and utilize this data for more personal and relevant ad campaigns that support the consumer journey.

Adapt to Changing Consumer Behavior

  • Focus on micro-moments: with consumer attention spans shortening, design ad campaigns that capture attention in fleeting moments. Consider interactive ads, short video snippets, and mobile-first formats to engage users quickly and effectively.
  • Optimize for multiple platforms: consumers use diverse platforms, so ensure your ads are optimized for different screen sizes, formats, and user experiences across various devices and platforms. Also consider that users do not want to be inundated with the same creative across their digital experience; so, ensure campaigns have unique creative to guide users through a journey while maintaining brand cohesion across all touchpoints.
  • Embrace omnichannel campaigns: integrate online advertising with offline touchpoints to create a cohesive brand experience. Utilize QR codes, social media mentions in physical stores, and targeted online ads based on location data to bridge the gap between online and offline interactions. Then maximize these touchpoints to create more advanced first-party data segments to drive efficiencies and fuel your core audience.

Consider Retail Media Networks

  • Consider partnering with relevant retail media networks: If your target audience and business aligns with a specific retailer's customer base, explore advertising opportunities on their platform. These networks offer highly targeted ads based on valuable first-party data, often resulting in higher conversion rates. But they're not all the same. Each focuses on a specific type of audience, so do your homework. For instance, the Macy's Media Network targets a style-conscious shopper, whereas Dollar Store's media network focuses on budget-conscious shoppers.
  • Track and measure performance: monitor the ROI of your campaigns on retail media networks. Analyze the data to understand which audiences, ad formats, and product placements work best and optimize your spending accordingly. Then apply these insights to help fuel strategies across other channels and platforms for a more connected digital experience.

Additional Recommendations

  • Stay informed about industry trends: Continuously monitor changes in the digital advertising landscape, including new platforms, data regulations, and consumer behavior shifts. Adapt your strategies to stay ahead of the curve. For starters, read our blog!
  • A/B test and iterate: Don't be afraid to experiment with different ad formats, targeting options, and messaging. A/B testing helps you identify what works best and adjust your campaigns for optimal results. I recently blogged about how generative AI can help you do more effective A/B testing - so make sure you capitalize on these kinds of tools.
  • Prioritize transparency and privacy: Build trust with your audience by being transparent about your data practices and respecting their privacy. Consider opting for privacy-focused ad solutions and complying with relevant data regulations.

What matters most is your audience - where they spend their time. This is why at IDX we emphasize the importance of building personas that dig deep into the profiles of your target audiences, including who they are, their lifestyles, and their behaviors. At IDX, we help our clients build trust through online advertising. Learn more about our capabilities on our website.