Online advertising as a vital part of the marketing landscape is nothing new. To not be focused on internet advertising in 2017 is to be woefully behind the times. As internet advertising grows and matures, though, trends and patterns are emerging that tell us about the role of internet advertising in the marketing world and about where it’s headed.
In a recent presentation for the internet Trends Conference, Kleiner Perkins presented the top internet trends for 2017. Reviewing the state of ad spend, ad blocking, mobile growth, and more, Kleiner Perkins laid out the state of advertising in the digital realm and highlighted some key trends that speak to where it’s headed. Here are some of key takeaways and trends in online advertising.
2016 marked the first year that internet advertising on mobile accounted for more than half of internet advertising revenue, according to the Internet Advertising Bureau’s 2016 Internet Advertising Revenue report. Mobile internet advertising brought in $36.6 billion in advertising revenue in 2016, eclipsing desktop’s $35.9 billion.
Kleiner Perkins points out that there’s opportunity in the gap between the amount of time spent on mobile and the percentage of advertising dollars that are dedicated to advertising on mobile. Consumers are spending 28% of their time on mobile, but mobile accounts for only 21% of advertising spend. By way of contrast, consumers spend just 4% of time with print media, which accounts for 12% of ad spend.
Though TV has long been the cash cow where advertising is concerned, internet advertising has seen astronomic growth in ad spend over the last decade, and it’s on track to surpass television by the end of 2017, coming in at over $150 billion. It will account for 37% of total ad spend, which will make it the biggest medium for advertising in the world.
Internet advertising is growing rapidly, but the benefits of that growth aren’t exactly evenly distributed. Together, Google and Facebook account for 85% of internet advertising growth. Google’s seen a 20% increase year-over-year between 2015 and 2016, capturing more than $35 billion in advertising revenue in 2016, and Facebook saw a 62% year-over-year increase in the same time period, bringing in just under $15 billion in advertising revenue in 2016.
Related Post: The 10 Statistics Spelling Disaster For TV Advertising
For some marketers, measuring social advertising can be a constant challenge. According to a study by SimplyMeasured, 61.1% of social marketers named measuring ROI as the biggest challenge, followed by securing budget and resources at 38.2%.
A big part of determining ROI is measuring success, and the same study showed that most marketers used engagement metrics, more than any others, to determine whether or not a campaign was a success.
Fifty-six percent of marketers said that engagement metrics were used most often, followed by conversion & revenue metrics and amplification & brand awareness metrics, which 20.7% and 15% of marketers named as the most frequently used, respectively.
As internet advertising picks up steam, marketers and brands are looking to implement smarter methods for reaching consumers. With the average user spending over half a decade of their lives each on Facebook, YouTube, Snapchat, and Instagram over a lifetime, social is becoming more and more vital to effective advertising strategies.
Platforms like Facebook, Snapchat, Instagram, YouTube, and Pinterest are providing more data on the back end for advertisers to use when targeting audiences for ads. Facebook is seeing that contextual ads are effective, with 26% of users who clicked on them making purchases. On Snapchat, brands are using games and goals to boost user acton.
Google’s also using data to make ads more effective with its location data. Through location-tagged ads, Google’s tracked a total of 5 billion store visits since 2014 that were driven by AdWords.
Brands and marketers are finding that user-generated content (UGC) is highly effective in driving engagement, particularly on social media. Influencer content is also driving high engagement, which is key in tempering the stark drop-off in engagement with branded content. Between 2013 and 2014, branded content increased 78%, but engagement took a nosedive, falling off by 60%. Audiences are looking for authentic content, and branded content often misses the mark.
In its 2017 Facebook User-Generated Content Benchmark Report, Mavrck found that user-generated content on Facebook had the potential to garner 6.9x higher engagement than branded content on the platform. But in a survey conducted by Linqia, 87% of marketers said that influencer marketing was an effective method for creating authentic content around their brand, and 77% said that driving engagement was a key benefit of influencer marketing.
Whether content is coming from influencers who are being paid to post sponsored content or from users who are posting about brands organically, posts from real people are making users stop and engage with brand-related content.