The vast majority of digital advertising is not being viewed at all, with many marketers failing to apply practical techniques learned from print and out-of-home to the channel. For every $1 million invested in online banner ads, just 0.1%, or $1,000, derives value for brands, resulting in $999,000 wasted by brands. So why is pharma wasting so much money?
The vast majority of digital advertising is not viewed at all, yet the CPG industry wastes money on them. Research has shown that only 35% of digital display ads received views. And of those, only 9% of ads received more than a second’s worth of attention. Meanwhile, only 4% of ads received more than 2 seconds of engagement.
It’s common knowledge that 50-60 percent of ad clicks are accidental. Display is an incredibly low-effort way to spend your marketing budget, whether trying to reach physicians or patients. The question then becomes, “why are brands still using them?”.
While traditional advertising—television, billboards, radio, sponsorships—could only be correlated with sales, display advertising promised marketers the dream of something that had long eluded them: precision.
Precision would ensure that data-driven marketers could easily optimize their way to hypergrowth.
Of course, that thinking was always BS, and we knew it. It’s common knowledge that 50-60 percent of ad clicks are accidental. Not a month goes by without us hearing about a significant brand realizing that their display performance was all smoke and mirrors.
- P&G reduced digital ad spend by $200 million and saw reach increase.
- Chase cut the number of sites its ads were running on by 99 percent and had no drop in performance.
- Even Uber, one of the world’s most technologically sophisticated companies, recently found itself defrauded out of $100 million in wasted ad spend.
Display is an incredibly low-effort way to spend your marketing budget. The attribution looks clear because $1 goes in, and $1.10 appears to come out. This enables us to strut into the CFO’s office with our “I’m a data-driven marketer, give me a raise!” apron. It allows us to sit on conference panels, telling our colleagues that precise marketing attribution is possible if you close your eyes and click your heels together three times.
So why are so many CPG brands increasing digital spending? Because they’re sheep and out of ideas and are being sold a bill of goods from agencies who are only interested in invoices.
Some online ads do work if they’re highly targeted. For example, an online ad on Facebook targeting bike riders might successfully advertise a new portable pump, but for most consumers, online ads are just a pain in the ass.
Allocating more money to digital ads shows the idiocy of most CMOS.
