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Profit by Saving Advertisers from Folly

Posted on Saturday, November 30, 2019 at 2:04 PM

Gain ad revenue by guiding advertisers to spend their ad budgets wisely.

By William Dunkerley

How many times have you returned over and over again to a restaurant that serves you a bad meal? Not often, I'd guess. But many publishers are serving bad advertising experiences to their advertisers and getting away with it. What's the difference?

Identify Bad Ad Experiences

First, let's define what a bad advertising experience is. It's simply one when the advertisement is unproductive. It doesn't effectively sell the product or service, or doesn't enhance the brand image.

In the restaurant analogy it's that the food, service, or ambience is unpleasant or doesn't match expectations. The diner experiences that result personally and knows if the choice of restaurant or menu item is worth the bill.

In the case of media advertising, the result is not so direct or personal. Some advertisers rely upon metrics such as click-throughs. Others correlate advertising campaigns with sales results. A limited subgroup conducts surveys to measure response. But for many advertisers there is no clear feedback loop.

When Following Ad Trends, Proceed with Caution

My observation is that many advertisers are influenced by industry trends in advertising methodology.

What are the trend lines telling them? According to Ignite Visibility, a digital marketing agency, "In 2019, native ads make up over 61% of display ad spend, making them one of the fastest growing formats on the market." The agency advises, "If you are not doing native advertising, you are missing out."

The growth fever goes beyond native advertising. Digital ads in general continue on an upslope. Emarketer.com explains, "In 2019, worldwide digital ad spending will rise by 17.6%."

All this has looked very enticing to advertisers and has driven many to increase their expenditures. That's actually good. Consumers are turning more and more to digital sources for information and entertainment. There's a downside, though. Digital advertising has been spun in a way that paints a deceptive picture. In response advertisers are making unwise ad buys, and publishers who are encouraging them are selling themselves short.

It is very advantageous for you as a publisher to sell ads that are beneficial for the advertiser. Doing so will help to keep that advertiser coming back with more ad dollars. And if the advertiser's business grows, it will have a larger ad budget to spend on your publication.

Ad industry hype about digital and native advertising is leading to bad decision making, however. It seems encouraging that digital ad spending will "rise by 17.6%" in 2019. But that statistic can be misleading. Non-digital advertising still amounts to half the total ad spend, and the percentage increase in digital is following a declining curve.

That decline may be attributable to saturation. Or it may be that some big spenders are not seeing the results they expected. Ebay presents an example. SmallBusinessTrends.com reports, "Ebay has recently thrown in the towel for AdWords advertising, arguing that online ads are ineffective." According to The Correspondent, the giant online marketplace found that "for every dollar eBay spent on search advertising, they lost roughly 63 cents."

What's more, digital ad spend statistics are inflated by the industry's big spenders. Emarketer.com makes that point: "Google will remain the largest digital ad seller in the world in 2019, accounting for 31.1% of worldwide ad spending, or $103.73 billion. Facebook will be No. 2, with $67.37 billion in net ad revenues, followed by China-based Alibaba, at $29.20 billion. Though Amazon has been steadily chipping away at the Google-Facebook duopoly in the US, it will be a smaller player on the global stage, with $14.03 billion in ad revenues. (That still makes it the fourth-largest digital ad seller worldwide, however.)"

That does not leave much for comparatively smaller magazine publishers and others, does it?

The growth of native advertising spending is misleading, too. Ignite Visibility explains its comparison of native advertising versus display ad spend thusly: "People view native ads 53% more than banner ads." That's not a fair comparison. Banner ads have always been an ineffectual format, a fact that's now finally being exposed. SmartInsights.com offers a comparative statistic: A full banner ad (468x60) generates a click-through rate of only 0.04 percent. A large rectangle (336x280) generates over 8 times as many, 0.33 percent.

In other words, ad formats that more closely resemble traditional display advertisements work better.

Stick with Proven Ad Formats and Avoid the Intrusive Ones

Less effective formats should be discouraged, as should ad formats that annoy readers. These include banner and sticky ads, pop-ups, auto-start video and audio material, interstitial ads -- anything that seriously interrupts the reader's quest to read what they went to your publication to read.

These formats have spawned the emergence of ad blockers. Some advocates of native advertising hype that as a reason to go over to text-based advertisements. But they flimflam the numbers, too. You see, they include intrusive ad formats such as pop-ups, interstitial ads, and banner ads within their definition of display advertising. That means the comparison is unfair.

I know that you are likely confronted with advertisers who want to buy relatively ineffective formats. My recommendation is to work with these advertisers and mentor them about what ad formats will give them the best results. Encourage them to establish ways to measure the ultimate impact of their advertisements. Click-throughs alone can be misleading. The ultimate answer for them lies in how an advertisement or ad campaign affects the advertiser's business. The ultimate answer for you lies in whether they keep coming back and spending more.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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