Display Challenges Fuel Diversification And Consolidation

Some consumers block ads, others are suspicious of fraud. CMOs and CTO join forces to make sure campaigns are data-driven and compelling enough to deserve attention.

The issues facing digital display advertising mean smart marketers need to adapt multi-channel, data-driven strategies that avoid “bots” and bring messages to the blockers.

One in three pounds spent on digital advertising in the U.K. goes to display. While nobody would suggest that it cannot still be an effective tool, display faces multiple challenges—a fact that should be acknowledged by marketers looking to deliver ROI on their budgets.

According to IAB UK, around 22% of adult consumers are blocking ads and that can rise to as much as one in three for male millennials.

Those consumers not blocking ads are not always reachable because of the twin issues of viewability and fraud. In the worst case scenario, 40% to 50% of display may be either unviewable or only viewable to computerised “bots” used by criminals to defraud advertisers, according to research by anti-fraud companies such as AudienceScience.

Many agencies believe these figures are too high but also have to acknowledge that it is impossible to know the exact extent of the problem because fraud, in particular, is very hard to accurately detect and measure.

Despite the issues with display advertising, however, brands are sticking with the channel. According to IAB UK figures for the first half of 2015, as much as a third of all digital marketing spend is on display.

Consolidating And Diversifying

While there are clearly questions around display, there are also signs that digital marketing budgets are not only increasing but being put behind more diverse channels, such as social media and native content. Mobile marketing is a prime example, rocketing up 60% in 2015, compared to the year before. With more attention and budget switching to the small screen, which is less well suited to display than desktop, it will come as little surprise that digital marketers appear intent on engaging with consumers from within the content flow, not banners and buttons around it.

As a result, IAB figures show video spend was up 51% in 2015 and, similarly, native advertising and content investment also shot up 50% while social media rose 45%. Display was not avoided by brands—it rose by 25% during 2015. Marketers are, therefore, taking a dual approach—sticking with display at the same time as diversifying where budget goes.

“We’re seeing both consolidation and diversification,” said Alistair Dent, head of product strategy at digital agency iProspect.

“Brands obviously want their display to be seen by the right people, so they’re using data to fuel programmatic campaigns that can identify their core demographic. They’re starting to use fewer, trusted publishers and networks, though,” he added.

At the same time, iProspect’s clients are looking to diversify with social and native campaigns “because brands want to know that they can supplement their display activity to protect against messages being blocked or falling prey to viewability or fraud issues.”

Smarter Data, Better Social

That is certainly the experience at marketing data specialist Acxiom, which counts Heathrow, Liberty, Epson, and Macy’s among its clients. Its business director, Hugh Stevens, reveals that over the past two years many of its clients have been actively looking to get more out of display through smarter use of data. In turn, this is being used to diversify and better target spend in advertising and promoting native content in social media.

They are doing this by combining third-party data with their own first-party data to target more effectively. “A lot of brands want to use data to not only make their digital display campaigns more secure and better targeted but also to help target people on social,” he said.

“If a brand is worried about display fraud, for example, the fact someone has logged in means it’s more likely to be a real person and not a robot,” he added. “At the same time, if they’re on Facebook or Twitter, [a brand] can serve a well-targeted advert or piece of native content because we and the social media site know a lot about that person, although the data is anonymised. Decisions can be far better informed than a hunch based on browsing behaviour alone.”

Storytelling

One interesting development from the rise in ad blocking is a shift of focus towards storytelling—blocked brands are having to work harder at not only being noticed but ensuring they are worthy of attention. Mark Lister, chief digital officer at Ness Software Engineering Systems, said the company was increasingly involved in weaving storytelling into the project, right from the very start, alongside its core technology engineering service for clients such as BA and Jawbone.

“We’re finding that smart CMOs and CTO are coming together to build compelling websites and apps that are built around storytelling,” he said.

“They’re realising the huge rise in ad blocking shows that people are turned off by brands that simply interrupt them with one-way messages that just say ‘here is our thing, come and buy it.’ Brands are building stories, which they need to promote using social and native advertising, and not just display.”

The trend towards storytelling has recently seen Ness working with U.S.-based, online-only car dealer Carvana on the technology as well as marketing messages to support its business model where second-hand cars are delivered to a customer’s door and even dispensed by vending machines.

“Carvana’s a great example of a brand we’ve been working with where the storytelling and the technology go hand in hand,” said Lister. “They’re heavily reliant on online and mobile video to tell the story of how you can order a second-hand car online and have it delivered to your door for a seven-day trial or pick it up from a vending machine via a token.”

The two videos explaining the startup’s concept and showcasing its car vending machine have so far had nearly one and a half million views on YouTube.

So smart marketers are clearly not seeing display’s woes as a sign they should ditch the medium. Instead, the picture that emerges is one where CMOs are seizing the opportunity to make data work harder so display is safer and social and native campaigns are better targeted. Factor in the rise of storytelling, and maybe the biggest impact the challenges facing display are having is bringing CMOs and CTO to work closer together to ensure campaigns are data-driven, diversified beyond display, and compelling enough to warrant consumers’ attention.