But with digital marketing ad spend steadily increasing, predicted to surpass non-digital in 2019, key players are working hard to reduce wasted spend by placing more focus on their targeting.
Despite this, our research shows only 14% of internet users clicked an online ad last month.
So what are the elements that drive wasted ad spend? And how can media owners transform their ad strategy to improve their ROI?
What Causes Ad Waste?
Lack of data-driven insight.
As modern consumers become more fragmented across platforms, devices and channels, spending more and more time and money online, brands need to know what marketing tactic works, when, and why.
Without granular consumer insight that goes beyond actions to map out attitudes, behaviors and motivations, brands will struggle to know their audience well enough to offer the experience they’ve come to expect, and be in front of the right eyes at crucial times.
Uninformed media planning.
When budget and brand are on the line, everything from ad placement and messaging to campaign scheduling and targets needs to be taken into account ahead of time.
For example, today’s consumers do discover brands through ads – but it’s crucial to place them in the right location for them to have impact.
Our research shows 36% discover brands via ads seen on TV – only beaten by search engines at 37%.
Other advertising channels, particularly those in the cinema or on the radio, have much lower rates of brand discovery, showing that placement is crucial when trying to squeeze the most out of your campaign.
If you don’t know not only where your consumers spend their time but why, it’s impossible to have the kind of hyper-sharp targeting that will reach your audience, whether it is via content marketing, email marketing or social media marketing, there’s always room for better targeting.
And it doesn’t matter if you’ve created the greatest marketing campaign in history – if it’s not targeted at the right consumers, in the right place, it won’t have the desired impact or results.
Without a well-researched message based on absolute truth, marketers are simply guessing at what their target consumers want to hear.
A common advertising mistake is making the message all about the product or features, rather than how the consumer will benefit from purchasing it. In strategic communications, the brand has a clear picture of the needs and perceptions of its target audience, and has the message to match.
48% used an ad-blocker last month.
But there is a solution.
One of the main reasons why consumers block ads, at 22%, is because “too many ads are annoying or irrelevant.” It proves the importance of knowing your consumers well enough to be confident of what advertising will appeal to them, and where.
Steps to Reduce Waste in Advertising
1. Get a firm grasp of your target consumer.
Consumer profiling is the only way to gather the insights needed to define, segment, and profile today’s consumers.
It’s about creating value from this data to understand everything there is to know about your target consumers and the market that surrounds them. Leading marketers are going beyond just top level data and market share information, using this to put consumers at the heart of their messaging, guiding everything from campaign planning to brand positioning.
2. Map their purchase journeys.
The traditional purchase journey is not what it once was – now, every consumer has their own, personal path to purchase.
This means media owners need to map the journeys of their target consumers in granular detail to ensure they’re placing their ads in the right place, at the right time.
Modern consumer journey maps provide a detailed overview of the touchpoints that matter along the path to purchase, based on data from the consumers themselves.
3. Personalize your ads.
Personalized marketing has become the gold standard in recent years – and for good reason.
Today’s consumers expect personalization, and media owners who use data-driven marketing campaigns to deliver this are seeing the results.
Research from Salesforce shows high-performing businesses use data-driven targeting and segmentation 51% more than underperforming businesses, proving this is a strategy that works.
4. Nail your retargeting.
Far too often, retargeting is based on poor data and unreliable user tracking. Modern tracking technology, such as GWIQ Analytics, is easy to implement and offers razor-sharp tracking, ensuring media owners are retargeting the right ads to the right users.
This way, marketers can validate their targeting and make sure no spend is wasted on advertising that won’t have any impact.
Case study: Procter & Gamble
Internal research from CPG giant, Procter & Gamble, found that while they only needed to reach the average consumer three times per month, many people received 10-20 ads in the same timeframe. Additionally, the average dwell time for a P&G ad on a mobile news feed was only 1.7 seconds.
Having identified this potentially harmful overexposure and lack of engagement, the brand carried out a marketing transformation.
1. Targeting smaller audiences.
This has led to P&G marketing team buying most of its media directly, saving 30% of the budget plan in digital waste and increasing its digital reach by 60%.
2. Introducing less “clutter.”
Instead of some of its brands introducing sometimes six new ads per year, they now only introduce one new national ad per year. This strategy is then supplemented with more one-to-one engagements with consumers.
3. Moving advertising in-house.
Much like audience research, it can be beneficial to move advertising in-house.
Marc Pritchard, Chief Brand Officer at P&G, says the company “needs brand people closer to consumers.” This way, it removes a number of touchpoints between message and consumers, ensuring it always has a finger of the pulse of its target audience.
But it doesn’t spell the end of brand-agency relationships – P&G now “elects full-service agency partners, like Publicis, on large-scale campaigns, while teaming with specialty agencies on a per-project basis.”
4. Being a force for good.
Interestingly, the company has a drive to be a force for good and growth, with Prichard saying, “We need to be good citizens.”
It shows that no matter the size, any brand can benefit from an authentic approach that will resonate with its target consumers.
With this strategy transformation, P&G was able to slash an incredible $200 million from its marketing budget in 2017.
Turning to research, the CPG giant was able to identify its weak points and come to data-driven conclusions on where its advertising strategy needed an overhaul and reduced marketing expenses without negatively impacting the ROI and total revenue.
But they’re taking it even further.
In a bid to keep reducing its advertising waste, the company anticipates a total of $2 billion in savings across its marketing efforts through 2021.
Cutting Down on Wasted Ad Spend in 2019
P&G’s ongoing battle against advertising waste shows not only can companies of any size experience wasted ad spend – they can do something about it to ensure every last advertising and marketing dollar of their digital marketing budget is used to its fullest potential, and plays it part in reaching gross revenue targets.
Small business owners feel the pinch of wasted budget more than larger companies, so for them it’s especially important that marketing activities are efficient and reducing waste is a key business goal.
And with the consumer journey constantly evolving, it’s crucial for media owners to look to solid insight to know exactly where and how to target their audience.
Knowing how your consumers expect to be marketed to, and how to work around trends like ad-blocking, allows you to cut down on advertising that goes nowhere. So what’s stopping you?