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The Top 10 Trends in Digital Advertising

The Top 10 Trends in Digital Advertising

By   January 24th, 2018

Another year older and wiser, and the digital advertising industry shows few signs of slowing down. To understand the current landscape and get a sense of what lies ahead, we dug deep into industry data as well as the Marin Advertising Index—which represents billions of dollars of annual ad spend on the Marin platform.

I hope you enjoy the result—our list of 10 digital advertising trends that promise increasing opportunities and unique challenges for global advertisers.

1. Google + Facebook “Eat the World”

By the end of 2017, Google and Facebook owned 63 percent of the U.S. digital ad market and 54 percent of digital ad revenue worldwide, according to eMarketer. Nationally, Microsoft grew but remained a distant third place, claiming four percent of the total U.S. revenue share.

The numbers don’t lie—at the close of Q3 2017, Google reported ad revenues of $24B and Facebook reported $10B. All signs point to continued dominance of “the big two” in 2018.

The opportunity: Upping your cross-channel game stands to net you more customers and more revenue. Our own research indicates that brands who manage their search campaigns alongside social have almost 10% higher revenue per conversion.

2. Audience Targeting Takes the Stage

Digital marketers increasingly understand that a “one size fits all” approach doesn’t cut it anymore. They’re finding ways to go even further to meet customer expectations of greater personalization and map relevant ad campaigns to audience needs. Audience targeting fills this need.

Layering “Audiences” on top of keywords drives better results than using keywords alone. With this focus on more refined audience targeting, marketers will be able to more easily identify people interested in their products, set the right bidding rules, and create the right experience for millions of people. In fact, advertisers using Similar Audiences in conjunction with remarketing on Marin’s platform are seeing strong campaign results, including 40%+ increases in clicks and conversions.

The opportunity: Despite the advantage that combining audiences with keyword targeting provides, use of Audiences by advertisers remains low at just 21%. As a result, first movers stand to benefit the most. Add audiences to all campaigns, starting with “Bid Only” to measure without restricting your reach.

3. Press Play on Video Advertising

Cisco expects video will represent 80% of all internet traffic by 2019. Not only that—64% of users are more likely to buy a product online after watching a video, according to comScore.

YouTube has a secret weapon in the video battle: TrueView. TrueView has 93% ad viewability, plus you only pay when a viewer watches 30 seconds of your ad. As an advertiser, you can deliver big spikes in conversion with video advertising campaigns by evaluating your videos across a variety of variables, and then optimizing and adjust to meet your goals. We predict that TrueView will become a not-so-secret weapon for advertisers in 2018.

The opportunity: As video advertising continues to explode, marketers who master the game stand to drive substantial campaign performance improvements. Use YouTube and Facebook for your video ad campaigns to take advantage of 80%+ of the public’s attention in digital. In addition, be sure to use search intent to inform and drive your social ad campaigns. Then, measure, manage, and optimize to continuously improve results.

To see just a couple of examples of how businesses have crafted successful video ad campaigns, read our case studies and check out our recent webinar on video advertising tips:

4. The (Amazon) Empire Strikes Back

Despite the dominance of Google and Facebook, Amazon is emerging as the next big player in digital advertising. But let’s be realistic here—Amazon’s current share of the digital ad market is just two percent nationally and less than one percent worldwide.

However—as The Wall Street Journal reported in December, GroupM’s parent agency, WPP, may increase its spending with Amazon by 50 percent this year from $200 million in 2017. This would help push total spending on Amazon ads by three of the world’s largest agencies to a collective $800 million a year.

As Amazon opens retail stores and ventures into the CPG space with its $13.7 billion purchase of Whole Foods, retail advertisers in particular will have to do double time to keep pace and take advantage. Additionally, Amazon’s self-service offering for retailers on Amazon Stores, with basic headline search ad capabilities, means retailers have yet another avenue for additional revenue and growth.

Consumers definitely now have a voice—and they’re using it to make purchases. Amazon’s Alexa digital assistant—inside millions of Echo virtual-assistant devices sold into U.S. homes—should give the company a powerful boost in an online advertising market driven by consumer targeting.

The opportunity: Keep an eye on Amazon. It remains to be seen whether it’s “too big to fail” or will be perceived as a competitive threat to retailers. In the meantime, advertisers would be wise to monitor Amazon’s evolution as an emerging powerhouse in the digital advertising space, and start to plan for future ad spend on that platform.

5. The “Next Big Thing” in Ad Tech

Voice search has taken the consumer market by storm and the numbers are staggering. Amazon has sold over 20 million Echo units, with Google Home gaining ground and gobbling up to 24% of market share since it hit the scene in 2015.

In addition to voice search, smart hubs and visual search will become firmly established in 2018. Innovative products like Google Lens, Pinterest Lens, and Amazon’s CamFind allow consumers to take a picture of an item and then search for that product to purchase online.

The opportunity: As voice and visual search technology matures, so will the advertising opportunities. Adapt to increased voice and visual search volumes and make sure your team is understands these technologies. A single-answer voice response is vastly different from the familiar world of typed search queries with multiple ranked results. Stay informed, knowledgeable, and ready to be an early adopter.

6. Changing Channels on Attribution

Because up to 90% of sales still happen in-store, marketers increasingly want to understand the full path to conversion and the impact of digital touch points to offline sales. To this end, the industry’s quickly moving away from the limitations of last-click attribution—rife with its inaccuracy, double-counted conversions, and poor reflection of the customer journey across devices and platforms. Advertisers are increasingly embracing a holistic view of measurement.

The opportunity: Unify attribution across channels. Assign reasonable and accurate value to all touch points along the customer journey to gain a full picture of performance and make better budgeting decisions to drive profitable return on ad spend (ROAS).

7. Offline Measurement Gets Connected

Speaking of offline sales—consumers continue to turn to mobile for all aspects of the shopping experience, whether it’s searching for products, finding the nearest retail location, or consulting their mobile device in-store. In other words, when it comes to mobile, shoppers are most often looking—and searching—to buy.

Additionally, it’s important to note that Google has access to 70% of all US debit and credit card transactions in-store through partnerships with companies that track that information. That’s a whole lotta data! To determine when digital ads contribute to an offline purchase, marketers will have to match this user data with other identifying information from merchants and credit/debit card issuers.

The opportunity: By matching ad clicks with in-store transaction data, Google has a treasure trove of information for merchants about which digital ads translate into physical store sales.

8. The Supreme Court of Privacy

Advertising is an industry in the crosshairs of consumer privacy, and the past several years have seen a substantial shift in attitudes towards protecting user identity and online activities. Many people are no longer content to share personally identifiable information (PII) without providing publishers with explicit permission and defining strict rules of engagement. Coupled with fresh legislation such as GDPR, many advertisers find themselves seeking practical advice on what marketing activities are permitted or prohibited.

The opportunity: GDPR will have a broad impact on all advertisers (not just those based in the EU), but programmatic ads will be most affected. Advertisers who adapt to GDPR will likely be forced to emphasize less ad volume and much higher quality data. Advertisers will be required to show far greater transparency around their data collection and targeting practices, but this presents an opportunity to build a much greater level of trust (and engagement) with users in the longer term.

9. Is Ad Blocking an Immovable Object?

Recent estimates from eMarketer predicted that over a quarter of US internet users would block ads in 2018, up from just under 16% in 2014. Also, research from PageFair shows that people are much more likely to leave your site if you ask them to disable ad blockers. Not only are ad blockers a reality on US desktop and mobile, but they’re also on the rise in developing countries.

This all means, of course, that ad blockers will continue to pose a significant threat to ad-funded business models due to their rising popularity with users globally.

What’s an advertiser to do? Large publishers have little incentive to intervene as their business booms, but small publishers still struggle with these ad blocker restrictions. In particular, recent Apple/Safari and Google/Chrome moves on privacy impact smaller publishers, given the potentially deadly impact of ad blockers on already limited revenue streams.

The opportunity: Despite the seeming doom and gloom surrounding ad blocker adoption, advertisers still have options to run successful campaigns. Be sure to focus on a positive user experience, so that users won’t be prompted to block your ads in the first place. Make your ads relevant and enjoyable. It’s essential that you deliver meaningful ads that don’t annoy users. Also, be sure to get fewer, higher quality ads via opt-in mechanisms, as advertisers will pay higher CPCs on these ads.

10. Messenger Ads: There’s an App for That

Messenger Ads represent one of the most exciting channels to come online as of late—although still a nascent offering, it’s being touted as “the new email” by some in the advertising industry. Despite its relatively recent arrival on the scene, Messenger itself now has 1.3 billion monthly users, up from 1 billion in July 2016. That’s the same count as Facebook’s other chat product, WhatsApp, showing massive advertising potential.

The opportunity: Advertisers are already reporting CTRs north of 50% (which is basically unheard of these days). Perhaps it’ll decline with time, but Messenger Ads promise a huge opportunity for advertisers who jump on the bandwagon in 2018. Be sure to hop on.