The Challenge of Online Advertising: Reaching the Consumer

“Knowing and understanding targeted customers is the overarching rule of exceptional companies.”

-Alan Hall (Hall, 2012)

The Challenge of Online Advertising: Reaching the Consumer

Consumers are increasingly absorbing online media. Advertisers have obviously noticed as they continue to pump more revenue into their online efforts. Forrester Research predicts that “by 2016 advertisers will spend as much on interactive marketing as they do on TV advertising today (Williams, 2012).”

The Interactive Advertising Bureau (IAB) and Pricewaterhouse Coopers, released revenue figures last month showing 95% growth in Mobile advertising "from the first half of 2011 to the same period in 2012." The Mobile ad industry "as a whole grew to an all-time high of $17 billion in revenues in the
first half, a 14% increase year-over-year." Digital video advertising grew 18% since this time last year, and search marketing “brought in 8.1 Billion in the first six months of 2012, up 19% from last year (Parker, 2012).”

While the revenue for online ads continues to increase, many critics argue that online ads are not as effective as they should be. Online marketing efforts often fail, and some studies indicate they offer less value than traditional marketing efforts.

Research firm Edelman Berland conducted an online survey of 1,250 adults in the U.S., 18 and above, “including 1,000 general population and 250 Marketing Decision Makers,” and the study produced some interesting results. When asked how much attention they give to various ads and authorities, the respondents chose online ads and ads that appear in apps and games dead last, below all forms of traditional media (Edelman, 2012).  

Also, according to the study, only 30% of consumers think online advertising is effective, while 54% find banner ads to be annoying (Edelman, 2012).

With “multi-screening” becoming the norm, perhaps part of the reason for the ineffectiveness of online ads is consumers are rendering themselves incapable of paying attention.

Gina Trapani, author of Upgrade Your Life, said “for jobs that require our full attention, we should not try to multitask.” Trapani said while we might think we are multitasking, we are merely “shifting (our) attention back and forth between the two activities quickly.” In the end, Trapani said, this shifting costs us countless hours and the “momentum” that we build on individual tasks (Trapani, 2010).

Perhaps this translates to advertising as well. Those of us who filter through multiple sources at once (i.e. watching TV while playing Angry Birds), may be missing out on the details.

Despite the obvious challenges that marketers face, there are ways to reach the consumer and to gain their attention.

David Williams, CEO of Merkle explains that a digital marketing presence is not getting any easier to manage. "Consumer expectations are growing by the minute, as communications become more targeted and customized to their needs," said Williams (Williams, 2012).

"They expect relevant, timely, personalized experiences with brands," he said. "But the proliferation of digital has resulted in silos that complicate measurement and attribution across the marketing mix...The only way to break down the silos is to connect the data. It’s that simple. And that complicated (Williams, 2012)." Williams called for "a road map to connect customer behavior across disparate media and channels (Williams, 2012)."

While Williams makes a good argument for supercharging our analytics efforts (Williams, 2012), knowing the industry itself offers us some information about the consumer. For instance, a local business such as restaurant doesn’t necessarily need a global presence. Yet, the owner can easily optimize for long-tail searches and get listed in directories for more visibility. Something like this often requires very little effort. Many Hotel chains, especially those that don’t already have a commanding web presence, probably benefit more from targeting pay-per-click ads. The travel industry is very competitive. Reaching consumers through organic search is difficult when there is high competition. Pay-per-click ads offer easy access to the top of search results, and customers predominantly look online for reservations.

References

Williams, D. (2012, April 16). If You Think A Web Analytics Tool Is Enough, Think Again." Forbes.
       Retrieved on November 5, 2015 from http://www.forbes.com/sites/davidwilliams/2012/04/16/if-you-
       think-a-web-analytics-tool-is-enough-think-again/

Hall, A. (2012, June 14). "To Succeed as an Entrepreneur, Know Your Customer." Forbes. Retrieved on
       November 5, 2015 from http://www.forbes.com/sites/alanhall/2012/06/14/to-succeed-as-an-
       entrepreneur-know-your-customer/

Parker, P. (2012, October 11). "IAB: Mobile Ad Revenue Nearly Doubles While Interactive Spend Overall
       Reaches Record $17B." Marketing Land. Retrieved on November 5, 2015 from
       http://marketingland.com/iab-mobile-ad-revenue-nearly-doubles-while-interactive-spend-overall-
       reaches-record-17b-23721

Edelman Berland Firm (2012, October). "The State of Online Advertising: New insights into the beliefs of
       consumers and professional marketers." Retrieved on November 5, 2015 from
       http://www.adobe.com/aboutadobe/pressroom/pdfs/Adobe_State_of_Online_Advertising_Study.pdf

Trapani, G. (2010, February 16). "Work Smart: Stop Multitasking and Start Doing One Thing Really Well."
       Fast Company. Retrieved on November 5, 2015 from http://www.fastcompany.com/1549079/work-
       smart-stop-multitasking-and-start-doing-one-thing-really-well