The Future of Online Advertising

When we think about the evolution of advertising, we often remember the famous McDonald’s TV commercials, the Calvin Klein billboard in Times Square, Groupon newsletters, and most recently Facebook stories, to name a few. Believe it or not, advertising dates back to before 4000 B.C. in the form of Indian rock paintings and Papyrus advertising.

June 18, 2014

When we think about the evolution of advertising, we often remember the famous McDonald’s TV commercials, the Calvin Klein billboard in Times Square, Groupon newsletters, and most recently Facebook stories, to name a few. Believe it or not, advertising dates back to before 4000 B.C. in the form of Indian rock paintings and Papyrus advertising.

Fast forward to the 20th Century or, as we now know it, the Mad Men era of advertising. Most modern forms of advertising took flight during this century including radio, print, outdoor, and even online. Marketing and advertising execs knew their channels and produced the best possible advertisements to support them. While everyone was worrying about Y2K, another shift occurred and it was time to re-think ad strategy as a whole.

Over the past 10 years, online advertising has exploded with newsletters, search engine marketing, social media, and the need to be “mobile” and on-demand. Reportedly, social media advertising sales went up 76% YOY in 2013! What does this prove? Content is not only king, but the backbone and future of digital advertising.

Platforms such as Facebook and Twitter paved the way for content to be shared via newsfeeds. Then came Instagram and Vine, which simplified content into photos and video and became the first mobile only apps of their kind. This underscores the fact that, as a whole, we are moving in a mobile direction for the consumption of native content. However, advertisers are faced with a harsh reality when it comes to mobile: real estate is limited and content is proving to be a smart investment.

Creating value for everyone
Consumers have been trained to ignore traditional banner ads and, in turn, brands are becoming media companies in their own right. The integration of brands and publishers create more value for both parties. Publishers get contributed content, and, if the brands are aligned properly with the user base, it creates additional credibility for the publisher with brand integration.

  1. Native/Sponsored Content: Users generally engage more with native/sponsored content. Brands, on the other hand, are bolstering their reputations with sponsored posts that are integrated with editorial content in hopes they will engage users and create value for them. That being said, it’s important to be clear and not trick the user. As sponsored content is a newer format, it is often difficult to measure the immediate impact. Like most marketing strategies, the brand/advertiser should define a clear set of goals they are looking to achieve, including social sharing, time on page, or traffic to their website amongst others.
  2. Mobile: Users are shifting their patterns, and 30-50% of all traffic is now coming from mobile. According to Forbes, tablets and smartphones will account for 87% of connected device sales by 2017. As time spent on mobile content is usually quick and limited, advertisers need to shift their focus from mini banner ads toward quick experiences integrated with the content users are consuming. Responsive design trends allow for the creation of optimized experiences that adapt to the device the user is on.
  3. Video: Video is becoming more accessible across mobile devices and users are often drawn to consuming video related advertisements that are engaging. This is evident by the large number of views for commercials online. Since video CPM rates are more valuable to advertisers than they are to publishers, it’s estimated that digital advertising will soon overtake TV advertising. Average video CPMs are going for $24.60. eMarketer predicts U.S. digital video ad spend, which totaled $4.18 billion in 2013, will grow to a staggering $12.27 billion in 2018.


Amplification
The above methods are clearly more time intensive than designing a banner ad—but also have more value and bang for the buck when done right. It’s important to maximize the value versus time invested by leveraging other paid marketing vehicles to further promote and drive traffic. These include:

  1. SEM: Paid promotion can be done through search engine marketing on Google and Bing and is a vital acquisition tool.
  2. Email: Once users have been captured it’s important to integrate them into future efforts, whether opting into email or as a follower.
  3. Social Media: The major benefit of buying ads on Facebook and Twitter is the targeting, testing, and reporting you’re able to achieve—at a nominal cost.

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