The term “advertising” can leave a sour taste in our mouths. As consumers, we’re learning to block ads, skip commercials and otherwise tune out advertising messages. As marketers and business professionals, we’re faced with the question of how to effectively advertise our business. And make sure we’re spending our ad dollars wisely.
Done well, paid advertising can generate enormous brand recognition and return on investment. When done poorly, however, advertising can be a budget drain. When it comes to effective advertising, there’s a lot to learn as these scary – but true – statistics show:
1. Google and Facebook together have more ad revenue than the entire global print and radio industry, combined. (Source: Axios, 2017)
Digital is dominating. With the explosion of digital advertising, marketers have long been wondering if traditional advertising is dead. While plenty of businesses are still spending money on traditional channels, many are cutting back budgets. TV remains the strongest bastion of traditional advertising, but it looks like digital is poised to finally overtake it this year.
Distribution of Advertising Spend in the U.S. from 2010-2020
2. 32% of marketers say that traditional paid advertising (print, outdoor, broadcast) is the most overrated marketing tactic (Source: State of Inbound, 2017)
As digital channels gain traction, marketers are also losing faith in traditional advertising. One reason may be that traditional methods are notoriously difficult to measure. Digital tools provide an endless supply of metrics for marketers to prove ROI. Print ads and radio spots? Not so much. Furthermore, with consumers demanding personalized, “on-demand” services, most traditional channels can’t keep up with customization offered by digital tools.
3. U.S. Print newspaper advertising revenue has dropped more than 75% since 2000. (Source: AEI, 2015)
If there is one traditional channel going the way of the dinosaur, newspaper advertising might be it. At their peak in 2000, newspapers brought in $67 billion in ad revenue annually. In 2014, they made only $19.5 billion. By 2020, they’re expected to capture only a mere 5.5% of the total U.S advertising spend.
4. The average response rate for direct mail is only 2.9% - and that’s considered high! (Source: DMA, 2016)
According to the DMA, direct mail has a higher response rate than any digital channel. Their study reported that display ads, email, social media and paid search all failed to reach even a 1% response rate. Don’t get too excited though – comparisons of email and direct mail still give the prize to email for the highest ROI. While it can be effective, direct mail also carries a much higher price tag.
5. 87% of people say there are more digital ads than two years ago. (Source: Hubspot, 2016)
Death, taxes, and ads are pretty much all facts of life at this point. A well-cited article suggested that we’re exposed to about 5,000 branded messages every single day – and that was back in 2006. While some people claim that’s a gross exaggeration, there’s no doubt that digital advertising has exploded in the past decade. It’s not hard to believe there are more ads out there today – and certainly most people perceive it that way.
6. 91% of people say ads are more intrusive today than two years ago. (HubSpot, 2016)
Not only are there more ads, but we also find them more annoying than ever before. People spend a huge amount of time online consuming content, but they don’t like being interrupted by ads. Interestingly, people don’t hate all ads, just the ones that are the most intrusive. 83% of people agreed that not all ads are bad, but they do want to filter out the most irritating ones.
7. The average CTR of display ads is .06% (Source: HubSpot, 2015)
Display ads – whether they’re banner ads, video ads, pop-ups, etc. – often get a lot of hate for being intrusive. Hence the frightening low click-through rate. Still, keep in mind that Google’s display network alone generates 180 billion ad impressions each month. .06 percent of 180 billion is still a lot of people clicking.
8. 419 million people worldwide have installed an ad blocker on their smartphone. (Source: PageFair, 2015)
Peoples’ response to annoying ads? Block them. Ad blockers are growing immensely in popularity across all channels, but especially on mobile. Hubspot reports that ad blocking has increased 90% year-over-year. With digital advertising continuing to grow, you can expect ad blockers to grow right along with them.
9. 82% of consumers have closed a browser or exited a webpage because of an autoplaying online video ad. (Source: HubSpot, 2016)
You know when you start reading an article, and suddenly there’s audio playing that you don’t know where it came from? You scroll back up the page only to discover a video ad started playing automatically. If you’re like 82% of other people, you probably leave the page. Despite auto-play videos becoming commonplace on Facebook’s news feed, most people don’t want them on other web pages, especially not with audio.
10. 34% of consumers say they have mistakenly clicked on an online ad. (Source: HubSpot, 2016)
Accidental clicks are an unfortunate reality of online pay-per-click advertising. Especially on mobile devices, most of us have suffered from “fat finger syndrome” before. In fact, Google reported that up to 50% of mobile clicks are accidental. While Google has measures in place to protect against accidental and invalid ad clicks, they’re not going to catch everything.
11. 78% of your email is never opened, and 96% of it is never clicked. (Source: GetResponse, 2017)
Despite being touted as one of the best channels in terms of ROI, the open and click rates on email are often depressingly low. While it varies by industry, average open rates sit at about 22%, and click rates are typically less than 4%.
12. 21% of email recipients report email as Spam, even if they know it isn’t. (Source: Convince & Convert, 2008)
No one likes spam, at least not of the email variety. Faced with overflowing inboxes, people don’t want to be annoyed by email that’s not relevant. Even worse, you might not even have the body of the email to convince them. According to the study, 69% of recipients report Spam based soley on the subject line.
13. Facebook page reach has declined 20% in 2017 (Source: Buzzsumo, 2017)
Pay-to-play is the name of the game when it comes to social media, particularly Facebook. Facebook page managers have seen a massive decline in organic reach since about 2012. As more and more people are producing content, business pages are having a harder and harder time naturally hitting the news feed. A well-known study by social@Ogilvy cited organic reach at a mere 6% in 2015 and predicted it hitting zero in the near future.
Is Your Advertising Effective?
These scary statistics may paint a bleak picture of the advertising landscape, but many businesses are still finding enormous success with advertising. The U.S. ad industry is the largest in the world and expected to continue growing to over $207 billion by 2020.
What’s the secret? Good planning and effective design help ads cut through the clutter to grab attention and reach targeted audiences with effective design. Also, an integrated, multi-channel strategy reaches people across the many devices they’re using.
Want to learn more about creating effective ads for your business? Check out the video recording of our recent seminar: "How to Create Powerful Advertising that Works for You."