Do you spend your marketing budget on digital advertising?
If you do you'll have seen (pre-covid) the cost of those ads going up, factor in circa 50%-75% of that budget is probably going into the pockets of ad tech fraud then the cost of you trying to recover the upfront customer acquisition cost are getting to near unsustainable levels.
Digital advertising exists as an open marketplace in which any digitally-fluent player (with budget spend) can launch a far-reaching campaign – and do so relatively cheaply.
Digitally-native vertical brands (DNVBs), in particular, revel in the instant gratification of marketing direct-to-consumer through online channels – and for good reason.
These brands can own the entire funnel (and a goldmine of data!) to track every consumer detail – down to the exact cost it took to capture the customer.
I follow the science, the data, and the experts (nope not Boris) but Dr Augustine Fou who is a leading expert in ad fraud.
He recently wrote a really great and insightful LinkedIn article 'How to Do Digital Marketing Properly' (link here and below) he discusses this very subject and the inspiration for this blog.
"If I had $1 to invest in digital"
He says "I would invest it in creating content, as opposed to spending it on ads".
This is for the simple reason that the ad is over the moment after it is aired or displayed.
Some will argue that there is a “branding effect” but that assumes that human users saw the ad and remembered it.
This is just like paying for a full page ad in a magazine but the user flipped past that page and didn’t really notice your ad. Most humans ignore the ads on webpages too (“banner blindness”); a large portion of ads are shown to bots on websites selling inventory through programmatic channels; some ads are never displayed on screen because the real-time bidding and ad serving process took too long; and even if the human did see it, they may not remember the ad or the message in the ad.
So the ad is over the moment it is aired.
This 'digital advertising' approach is driven by a fixed mindset, because this is what we have always done.
When the internet came along publishing companies that were in the business of magazines or newspapers had huge back catalogues of content so they simply shifted their 'advertise and promote' thinking into the digital landscape, something they are now doing in even greater numbers than ever across social media channels.
With the influx of D2C brands (and their inevitable competitors) playing fast and loose in the digital ad space, more dollars are needed to compete for the same impressions.
As a result, COCA (cost of customer acquisition) has reached a point where it’s outpacing customer lifetime value (LTV).
This means the total amount a customer spends with a brand is less than the cost it took to acquire them, when calculating the marketing resource costs (effort and ad spend).
Social media isn't really designed for those intrusive ads, why, because when were on 'social', we just want to be social, but from what we can evidence it seems that brands are still happy to have circa $100 Billion of those ad dollars going into the pockets of ad fraud.
There is an alternative - ask me how?
Creating content, however, will yield longer lasting value. If you’re doing marketing, and your content helps answer questions that your potential customers have during their customer journeys, that helps them get to the next step of their purchase decision process. It’s extremely difficult to know every user’s customer journey, and every user’s customer journey is as unique as their fingerprint.