6 Reasons Why Digital Advertising Works For Brands

1. Digital Advertising Drives Sales & ROI Nielsen completed more than 800 studies over the past seven years, collaborating with more than 300 CPG brands and 80 companies to measure the correlation between online advertising and offline consumer purchases. Nielsen concluded that brands can experience a return of almost three dollars in incremental sales for every dollar spent in online advertising that has been precisely delivered using purchase-based information. 2. Digital Advertising Enhances The Effectiveness Of Non-Digital Media Channels An econometrics study [PDF] conducted by BrandScience and Microsoft shows that online advertising not only delivers excellent ROI efficiency itself, but it also makes other media spend work harder. When the researchers compared the difference in ROI performance between studies that have an online element and those that do not, the results were striking — adding online to the media mix has a positive impact on the campaign ROI for all media, from a delta of +4% for radio to +51% for outdoor and a whopping +70% for television. 3. PDigital Advertising Drives Word-Of-Mouth At Scale According to Nielsen, 92% of consumers believe recommendations from friends and family (“word of mouth”) over all forms of advertising, and there is little doubt that digital advertising turbo-charges this effective persuasion channel. ShareThis has a unique view of the word of mouth phenomenon; its ubiquitous sharing tools allow it to touch the lives of 95% of U.S. internet users across more than 2 million publisher sites and 120+ social media channels. 4. Digital Creative Drives Interaction & Lifts Brands It is well known that the quality of ad creative is the most important determinant of ad effectiveness. A seminal comScore ARS study showed that creative quality drives more than half of the sales changes for brands analyzed, four times higher than the impact of the specific media plan. Digital creative adds the dimension of interaction to sight, sound, and motion — and greater interaction has been shown to drive brand effectiveness. 5. Digital Advertising Is More Efficient Than Traditional Media While it is dangerous to generalize about media costs given the wide array of choices within each medium, digital advertising can generally be seen to be among the most efficient means of reaching an audience. 6. Digital Advertising Is Essential To Reaching An Audience In 2013, time spent with digital media among U.S. adults surpassed time spent with TV, and this gap will likely continue to widen.

Instagram Now Offers 60-Second Video Ads

Move over, 15-second Instagram videos. There’s a new guy in town: 60-second Instagram video ads, giving marketers an opportunity to tell a story and not be confined to doing so in such a short period of time. The goal, of course, is to give marketers choice in their marketing message. Typically, it’s pretty difficult to convey any marketing communication in 15 seconds. Allowing a 60-second video would give the creative types more of a chance to make their message heard, and ideally, make it easier to communicate any calls to action or information to the consumer. The company launched its first 60-second advertisement, for Warner Brothers, featuring a trailer of the company’s upcoming movie, “How to Be Single.“

Facebook’s Mobile Advertising Onslaught Continue

More than three quarters of Facebook’s advertising revenue now comes from mobile advertising. That’s up from 62% from a year ago. The company’s been heading this direction for some time — last quarter, 73% of its ad revenue was mobile — but it’s still pretty stunning given that when Facebook went public in 2012, its mobile ad revenue was zero. It’s also pretty remarkable given the struggles other big media companies have had earning mobile ad revenues — Google just today started incorporating search adsinto the Google Play Store, where users buy apps and content for their Android phones. According to April research from Goldman Sachs, Google made about $12 billion in mobile search ad revenue last year — about 20% of its total ad revenue — and most of that came from search ads displayed on rival Apple’s phones.

New Competition for Mobile App Advertising: Who Will Win?

Facebook’s mobile app advertising has been a game-changer, delivering undeniable success for both Facebook and the apps using its mobile app install ads. But as of the last few weeks, Facebook is no longer the only game in town. Google, Twitter, AOL, and Yahoo have disclosed plans for dedicated advertising products for app marketers. But, as we saw with the early days of mobile ad networks, even a rapidly growing market will have some winners and some losers. First, let’s take a look at this sudden rush of activity and explore why app-specific advertising products are the future of mobile app advertising:

A complete reversal

n mid 2012, Facebook was getting dinged for not doing enough on mobile. They had an underwhelming app experience and hardly any revenue from mobile – then they introduced their mobile app ads. In slightly more than a year since the management APIs were introduced, the app install ads grew from minimal revenue to 30% to 40% of Facebook’s entire revenue stream, according to some estimates. Not bad for a company that, back in May 2012, admitted it didn’t know how mobile worked. Today, it’s clear just how well Facebook’s app ads perform. These stats are specific to game apps, but hold true across many app categories. That kind of out-of-nowhere performance is industry-changing – and that’s why we’re seeing in this spurt of strategic moves by Google et al.

But what does it take to succeed?

In our view, there are three essential components to achieve large-scale success with mobile app install ads:

Data

Targeting capabilities

Programmatic access through APIs

All three are intimately related: all the data in the world is useless without flexible targeting capabilities to slice and dice it; the more precise your targeting options, the more you need advanced programmatic tools to manage and optimize them. There are certainly other components – the usability of the ad unit itself, the willingness of the audience to engage with the ads, the pricing model – but we believe those are the three major drivers. There are also plenty of opportunities for ad units with unique hooks to succeed: video networks like AdColony and Vungle are currently very strong performers for driving app installs and engagement.

Who are positioned to be the biggest winners?

All four companies that have made announcements about new app install ads are well-positioned to take advantage of this new market

Facebook: has already proven its ability to successfully execute these ads. Incredible amounts of data, precision targeting, and powerful APIs.

Google: should be a slam dunk. Has built a unique position in the industry, with search, an OS, a browser, shopping, video, home automation, navigation, and more under one umbrella. They certainly have the data and the tech capabilities – it should just be a matter of execution to deliver an effective app advertising product.

Twitter: remains to be seen, but is promising. Twitter has plenty of data for targeting, significant API capabilities and mobile runs deeper in their blood. Twitter started as an SMS service, and currently see more than 75% of usage on mobile.

Yahoo: also promising with good data for targeting and strong API capabilities. Yahoo has been in the advertising business longer, saw 430M unique mobile users in Q1 this year – more than half of total usage – and boasts mobile-friendly services like Tumblr and Flickr, in addition to top-ranked news and weather apps.

AOL: owning an impressive bunch of properties including TechCrunch, The Huffington Post, DailyFinance, Engadget, AOL Mail, and Autoblog, AOL reaches about 86 million unique mobile viewers a month. They also claim a coming “premium environment” in which users can download apps. We shall see.

The potential is there for all of these properties to create app install ad products that dramatically outperform banner ad networks. In addition, app install ads on mobile have the ability to double as re-engagement ads, so users who already have the app installed get targeted messages with deep links to specific parts of the app – new content or features, for example. This helps solve an additional app marketing challenge: user decay over time. We expect these types of products to make up the vast majority of mobile app marketing spend in the near future – with RTB exchanges positioned to efficiently provide access to huge amounts of inventory not covered by the big four.