Studies suggest that a lot of advertisers worldwide waste their advertising budget. A premier body for advertisers and advertising companies called The Association of National Advertisers reports that only one-fourth of all digital advertising expenditure actually reaches the public. Another study by Imperva Incapsula presents that a bot-driven advertising fraud costs $7 Billion dollars annually for businesses. Advertisers have realized the effect of this and are proactively looking to eliminate wasteful digital expenditure. A few examples are-
- Procter and Gamble have started cutting the digital advertising expenditure from its budget from mid last year by more than $100 million dollars.
- JPMorgan Chase has decided to have its ads on only 5000 sites cutting off 3,95,000 sites.
This interestingly for these two tycoons has meant only a minimal change on the impressions of the ad on the internet. The high Rate of investments in digital advertising has carefully been able to allow businesses to forget the waste involved in these high-end ads. This, however, is changing as advertisers are now looking for more transparency and accountability to get back their lost budgets.
Here are a few ways you may be wasting your budget and a few solutions to reclaim them-
The business of web advertising can be rewarding especially when what you need to deliver is not completely what you promise. This marketing gimmick is a portion that has built itself on fraud. Most sites don’t employ anyone, they just rely on bots who mimic human behavior so revenue is generated for the advertising platform and not for the advertiser themselves. Advertisers keep investing without any knowledge of this fraud. They will mostly not know where the money is going and how it is not attracting any traffic to the page. Practices like PPC (Pay per click) are short-term, economical means but however, they do not serve the purpose of impressions.
Solution: To cut bots, one can use an ad fraud detection tool which is AI programmed with AdWords and BingAds campaigns.
Lack of Precision
Targeting is one of the prima modus of marketing. Poorly designed strategies cost dearly to the advertisers. It is important to focus on the right people with the right message at the right time. Sometimes whooping amounts are spent on ads to customers who might not even be looking for the product. A survey by Accenture showed that only 18% of the customers who clicked were looking to buy of which less than that actually bought. This is a huge margin considering the amount spent.
Solution: One has to look into proper targeting. Location, demographics, previous searches etc determine what one should advertise where. One can also use tools like Google trends or Quantcast to help with targeting.
Importance of CLV calculation
Customer Lifetime Value (CLV) can be defined as the profit amount gained by a company for the period of retention by a particular customer. In short, it is the profit received by the company due to the interest of a customer or his retention. This forms the basis for effective customer relationship management. In one CLV study, it was proven that only 24% of the marketers are effectively monitoring their CLV figures. It is an important piece of business intelligence as it can predict trends in different parts of the organization. It also helps in attracting new customers and retaining new ones. It will help you understand the ROI of your investment in advertising. It can also help understand where the money is going and what campaigns one can stop.
Solution: Understand CLV metrics and use big data to eliminate waste on your ad budgets.
Advertising remains one of the most important pillars of the marketing of your company. It is important to understand where all the money is going through. John Wanamaker, a 19th-century businessman stresses the importance of understanding where the money spent on advertising has gone. By using the advancements of technology and user-behavior-tracking tools, one can understand how to adjust and streamline advertising budgets Using AI and Data Analytics in the process can get a more precise budgeting approach.