Digital Advertising—And The Rise Of Data—Reach A Milestone

An Adobe report that celebrates of digital advertising’s quarter-century birthday not only provides a snapshot of how far the industry has come, but also a blueprint for where it goes from here.

Digital Advertising—And The Rise Of Data—Reach A Milestone

by CMO.com Team

Posted on 06-18-2019

Twenty-five years have gone by in the blink of an eye. Travelling back to 1994 takes us to the birth of digital advertising, courtesy of US telecommunications giant AT&T, which took out the first banner ad on HotWired.com.

That banner ad was part of AT&T’s “You will” campaign, which focused on the company’s version of the future of telecommunications. The ad itself was simple, confidently boasting to HotWired’s readers that they would click on the banner and be taken to AT&T’s website.

It was enormously successful. Some industry figures placed click-through rates at 44%, while others were as high as 70%, according to “Now We’re 25: Digital Advertising Grows Up,” a report released by Adobe in celebration of the industry’s quarter-century birthday. Either way, those numbers are stellar compared with today, when click-through rates for online ads struggle to reach single figures.

Suffice to say, a lot has changed in digital marketing.

Across every consumption medium in Australia (and around the globe), eyes and ears have been shifting online, and advertising dollars have followed. According to the Interactive Advertising Bureau (IAB), which leant its insights to the Adobe report, digital now accounts for 53.2% of the total advertising spend in Australia. The next closest in terms of ad spend is television, with around 22% of the market. Compare that with 1999, when digital ad revenue accounted for 1% of the market (AU$34 million/US$23.7 million). Fast-forward 20 years, and that market is now worth AU$8 billion (US$5.6 billion) locally.

The types of digital advertising since that first banner ad also have evolved. Search-based advertising, which makes up 44% of total digital spend in Australia, soon emerged, followed by the rise of social, video, and mobile advertising. Mobile content consumption, especially, has been a game-changer for consumers and marketers alike. For example, Facebook generated US$15.5 billion in mobile ad revenue in the fourth quarter of 2018 alone, according to its official results conference call.

Looking Ahead

The Adobe report not only provides a snapshot of how far digital advertising has come, but also a blueprint for where we go from here. The most important aspect of digital is for advertisers and marketers to own their data—and the customer relationship that goes with it.

All along, the past 25 years of advertising couldn’t have come as far as it has without data. From channel/platform selection, to targeting and personalization, to effective messaging/positioning, to gauging campaign effectiveness, data informs every single step in digital advertising strategy and execution.

Amid serious questions about walled gardens, transparency, and accountability related to third-party providers, what has become abundantly clear is in order to own the customer relationship, marketers need to own their data. In response, leading ad-serving platforms are now more interoperable with open and integrated ad stacks that minimise friction and eliminate conflicts of interest. That’s just one example. When service providers such as these come together, they help enable marketers and advertisers to realise the promise of data-driven marketing while maintaining flexibility, independence, and data ownership.

“Digital advertising has progressed enormously,” said Stephanie Tully, executive manager, group brand and marketing at Qantas, which via programmatic advertising has strengthened its engagement with its customers and can meet them where they are when they are looking for travel and related products. “The extension of customer direct marketing via programmatic into digital channels was a significant milestone for Qantas in how we engage with our customers, particularly given the strength of our loyalty program.”

So what will the next 25 years hold for digital advertising? It’s hard to say for sure; 25 years is a long time in the tech space, and the Adobe report posits marvels like fusion power and AI-driven virtual telepathy could come into play by 2024, creating new challenges and opportunities to be addressed.

But one thing’s for certain: The importance of owned data and how it’s used to make changes that put consumers first cannot be understated. Brands that pay attention to this now are sure to set themselves up for success in the years to come.

Download the report.

Topics: Experience Cloud, Digital Transformation, Digital Foundation, Analytics, CMO by Adobe

Products: Experience Cloud, Experience Manager, Analytics