In 2016, CPG advertisers are projected to spend almost $6 billion on digital advertising. This represents an 18% increase over 2015.
According to Google, less than half of digital banner impressions ever even make it into consumers’ view. This contributes to the paltry 0.08% average click-through rate for standard display media this year.
To spell it out, that means you get less than one click for every 1,000 impressions you buy. As targeted cost per thousand impression buys in the CPG space climb to the mid to high single digits, you might be paying $8 for a single click … a click that may have been accidental.
With all of this being said, why is 62% of digital ad spending going towards CPM-based display advertising this year? More importantly, what can you do about it? Here are three things to think about as you optimize your digital advertising plans for impactful and measurable results.
Seek out more cost-effective pricing models
Look beyond cost per impression or cost per click. Instead, push your team to buy on post-click pricing models. These include cost per engagement, cost per action and cost per download or print. This allows you to minimize waste and ensure you’re only paying for the consumers that meant to be there, chose to interact with your brand, and took meaningful and measurable action.
Measure your spending all the way through the funnel
A campaign can no longer be called a success (or failure) based on impressions or reach alone. Further, if you wait until a campaign is over to look at these numbers you’ve already lost. Apply measurement, including the metrics outlined above, at each stage of the consumer journey from initial interaction all the way through purchase at retail. Know how consumers are responding at each phase so you can more accurately pinpoint where things are going wrong or right.
Test, learn, scale, and repeat
With endless digital marketing options, it us up you to determine what tactics work best and deliver on your KPIs. It’s important to constantly test new solutions, analyze and optimize those results, and apply the learnings to future campaigns. Invest more heavily in the areas you see the strongest returns in order to maximize effectiveness of those channels, while also constantly testing new platforms and technologies as they become available.
Break away from the norm and stop buying advertising that does not work and may never be seen. Instead, take the above steps to help your company usher in a new era of advertising focused on creating true consumer engagement, measurement and the ability to prove out ROI.