What works in digital advertising

It has been over 20 years since the banner ad, often described as the “most misguided and destructive technology of the Internet age”, made its debut on the first commercial Web magazine, HotWired, in 1994.

Digital advertising has never looked back since. Growing at a compound annual growth rate (CAGR) of 17% over the last 10 years in the US, it is forecast to break the glass ceiling, overtaking television spends for the first time in 2016.

What started off as an experiment to monetize Wired magazine’s online entrance, the pesky “display” banner ad was the de facto standard of digital advertising in the late 1990s. With the advent of Google, display made way for search-engine marketing and, then, with the explosion of the smartphone, it dropped to the third place. Display now accounts for a mere 12-15% market share worldwide, making room for the new category, mobile advertising, which experienced hyper growth and grew at a CAGR of almost 110% in the last five years.

It used to boggle my mind as to why mobile advertising was carved out as a separate category by the Interactive Advertising Bureau, when its constituent parts still remained search and display. How is mobile search different from desktop search and how can the irritating banner ad, whose requiem has already been sung, command almost 55% of the total pie in mobile advertising in 2015?

Lately I have made peace, and that will become clear by the time you reach the end of this piece.

One is bound to feel a little bipolar when tackling the subject of digital advertising. Beset by the hazards of ad fraud, bots and human traffic farms, you will depressingly question the efficacy of digital advertising as you stare at engagement metrics of your last campaign.

But the very next instant, when publishers come by hawking some salivating new options to target your potential customer, you start feeling happy—like a kid in a candy store.

So what choice do we have as marketers in 2016?

At the agency Experience Commerce I co-founded 10 years back, we have ruthlessly looked at data to understand the rapidly shifting consumer behaviour in this medium.

We looked at the path consumers traversed when engaging with our campaigns trying to gauge intent. We correlated behaviour with the context of discovery. We factored in time of day and device usage. While it was easy to examine behaviour within the perimeters of a walled garden, it was very hard to connect the dots across the Web. We never knew what the consumer did after he left the garden.

Not anymore though. With signed in behaviour becoming the norm, our partner Google pretty much knows everything, and currently it is best positioned to make sense of the mass of data you provide it about yourself, for free, to help understand what and how you buy.

Understanding the context: It is getting easier by the day to get a sense of “purchase intent” for high involvement categories. Plug-in branded content, expert reviews, customer testimonials at point-of-sale and tip the consumer over to make a purchase (online or offline). All this comes under the purview of digital advertising, and thus the need to experiment with content syndication platforms such as Outbrain and the willingness of new-age publishers to burn-in sponsored content on their feed. However, whether placing branded content over the immensely disliked banner ads is the best way to exploit it, is a matter still open to a lot of debate.

Engineering opinions: It will become far easier for brands to come out of nowhere and get incredible amounts of lift by choosing to not advertise in digital advertising. How to create a favourable opinion about your brand, is another area to partner with agencies that specialize in advocacy programmes. Advertising on social media plays a key role in helping shape opinions.

Driving commerce online: Of course no one has missed the gargantuan battle on print, TV and outdoor between the e-commerce giants urging us to befikar (without worry) shop online for deep discounts. They have done the industry and nation good service, spending a fraction of the billions of dollars accumulated in their war chests. They shifted consumer behaviour. So what works for the brands is to now tap into this opportunity and surface directly in the smartest manner possible. Advertising on social and mobile search can work favourably.

What does not work in 2016, unfortunately, is what most marketers are excited about. Interrupting my lazy Sunday YouTube shows with irritating clickable TV ads, for every video I want to watch. Retargeting me with a product ad months after I have made the purchase. Spamming me with useless newsletters over email. Putting a banner with false close buttons on my mobile news updates, so that I cannot escape.

That brings me back to my favourite topic of mobile advertising. I have been a hardened sceptic, as I could never rationalize the huge gap in audience quality over the years—between desktop and mobile. We have made some headway lately and discovered the best opportunities in digital marketing where mobile advertising will work best in 2016; but that is a topic we can cover sometime later during the year.

The author is co-founder and CEO of Experience Commerce, the agency for digital business.