What will you do if you could save 95% of your current digital marketing budget and still retain your current sales or even (in rare cases) increases your sales?
Saving 95% of digital ad spend and not losing anything in actual buying activity can be as simple as turning off the switch and killing most of your ads.
Yes, it is entirely possible that your digital ad spend is way more costly than the results and impact of the ad campaign. Take the example of JPMorgan Chase.
In early 2017, Chase’s ads were displayed on about 400,000 websites. After implementing a program that aimed to prevent any of Chase’s ads showing up certain types of content it deemed offensive, the number of websites carrying Chase’s ads was cut by 395,000 to just 5000.
With such a drastic cut to it’s ad spend, you would expect an equally drastic drop in the results of the ads. Yes, there was a drop, but only in number of impressions. The amount of user activity beyond impressions remained roughly the same.
The cost of impressions and visibility of Chase’s ads on the internet also remained roughly the same.
An outlier?
Not really.
Several years earlier in 2013, a large scale study on the effectiveness of paid search found that “brand keyword advertising expenses have neither persuasive nor informative value to well-known corporations, and arguably, for other companies as well.” That study was for eBay and demonstrated that its Search Engine Marketing (SEM) campaign did not affect sales on eBay.
They’re not alone, several other big brands have also reached similar conclusions.
And it’s not only the big brands that are experiencing this, smaller businesses have also reported similar concerns.
In 2020, digital advertising, digital marketing, and digital everything was center stage as the entire world turned to the internet to conduct business, work, connect and keep in touch with family and friends.
As the year raged on, however, and amid social issues, protests, and tense political moments many brands suspended several digital marketing campaigns. At the same time, online traffic increased and consequently online businesses thrived, creating a win-win situation for brands.
If brands discover a significant disconnect between ad spend and the impact of the said campaigns, and if they can successfully demonstrate enough evidence that some of their ad spend was unnecessary, digital marketers, and agencies will have to contend with a new reality.
Why are digital ads failing? What is happening?
Several issues contribute to this situation. One of which is a proliferation of dodgy or inexperienced marketers and agencies.
Both agencies, immature marketers, and many clients are obsessed with huge numbers. Nothing is wrong with big numbers – if they are the right numbers. And ultimately the right numbers are the sales numbers.
Unfortunately, most people are dazed early on with “impressions”. While the impact of advertising is naturally difficult to measure, increased ad spend and subsequent increase in reach is normally expected to show or correlate negatively or positively with sales growth. If that is not happening, something needs to be checked out.
As the examples, I cited demonstrate, this time, the ad spend itself needs to be revisited.
As Dr. Augustine Fou noted in this Forbes article “Digital marketing works; but the vast majority of impressions and clicks are from bot activity currently.”
The 2013 eBay study doesn’t completely discount the role of paid search. The researchers add that “there is a small yet detectable positive impact of SEM on new user acquisition and on informing infrequent users about the value of using eBay. This last finding supports the informative view of advertising and implies that targeting uninformed users is a critical factor for successful advertising.”
Put simply, your paid search campaign should be informational, and target people who have little-to-no idea what your brand does.
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