Facebook might seem like the ubiquitous channel popping up in most brands’ digital advertising campaigns. It’s been around for a long time, after all, so it’s what advertisers are comfortable with. Nonetheless, digital advertising — across social platforms, websites, and more — is constantly shifting, so advertisers must consistently find new ways to reallocate ad spending to compensate for the turbulence. They might invest in a more programmatic approach or even look into the power of a data management platform (DMP).
And that’s just in digital advertising.
Where does that leave the future of advertising on mobile, though? And where does OTT (over-the-top) advertising come into play?
Here’s what advertisers need to know about the landscape across digital, mobile, and OTT advertising:
According to BI Intelligence, digital advertising spending (across display networks, social channels, search, and others) shot past dollars invested in traditional TV this year. It’s not showing any sign of slowing down either, with $77 billion in digital ad spending projected in 2017 and expectations to skyrocket to an estimated $107 billion by 2021.
While spending rises, that doesn’t mean digital advertising isn’t still a numbers game in terms of reach. For all of the increases in spending, “click-through rates (CTR) on the world’s most popular sites and platforms remain low: 1% on Facebook and 0.11% on Instagram, for example.” However, with a solid CRM system in place, advertisers can maximize investment in digital ads. CRM-powered ads on Facebook, for example, have a 47% higher CTR than when using traditional targeting.
Of the 2,210 U.S. adults surveyed in our “2017 Connected Subscriber Report,” 81% own a smartphone. That’s more than those who own a standard mobile phone and a tablet combined. Maybe that’s one reason why more than half of all digital ad spending in the world went to mobile in 2016 (in the U.S. alone, 64% went to mobile).
People are also changing their search behaviors, using mobile more than desktop. Of the $36.6 billion in mobile ad revenue during 2016, $17.2 billion came from mobile search. It’s no surprise that there’s fierce competition among brands who want to stay in the top results in search engines, and mobile advertising is one way to stay visible among the crowd.
Hyperbole aside, OTT video seems like it’s everywhere these days. Amazon, Hulu, HBO Now, Roku, YouTube TV, Sling TV, Playstation Vue, and more are in the OTT mix, to name just a few. Millennials ages 18–34 are cutting cords in droves and subscribing to OTT and streaming services like Netflix. In fact, 83% subscribe to one or more of these services, according to Salesforce’s “2017 Connected Subscriber Report.”
This growing audience in OTT video is increasingly appealing to advertisers looking for new ways to distribute personalized content to captive customers. Imagine a customer at home using Roku to watch a show about cars on Hulu. Advertisers have the ability to serve up similar promoted content based on this behavior. With traditional TV, viewers in a particular location watching the same show during a specific time slot will all be served the same ad. Serving up ads alongside OTT content is a game changer for advertisers — and consumers — itching for more personalized content.
The Wall Street Journal mentions that “advertisers are attracted to OTT because it blends attributes of premium TV advertising and digital media’s precision.” While OTT is still in its infancy, it offers a new frontier for advertisers. (Watch out for programmatic TV, too, which, according to eMarketer, could see ad spending grow 75.7% to $1.13 billion this year.)
Looking ahead, what do all of these gains in digital, mobile, and OTT advertising really mean for companies — and the customers they serve?
One important note is that advertisers will have their work cut out for them. There are so many (fragmented) opportunities to reach consumers, so knowing where and how to reach them effectively will require companies to invest significantly in customer data. Having data at their fingertips — and ensuring that intelligent technology is there to help analyze that data — will give companies a leg up in a competitive advertising marketplace. For consumers, we’ll wait and see how they respond to more personalized ads paired with the content they love.