3 Ways to Optimize Ad Spend
Marketers can take steps to ensure that they're not wasting their advertising budget. Here's how.
Patrick Quigley, CEO, Vantage Media
For years advertisers have been devoting their time, energy, and money to creating the perfect advertisements and pushing them out as far and wide as possible. Competition within the industry and the battle to not only have your ads viewed, but also to actually engage consumers through those ads (essentially, direct response marketing) is an increasingly difficult challenge. Often brands are simply unable to determine which advertising and marketing tactics are effectively bringing in customers, and what percentage of their ad spend is wasted by ads going unseen, or by ads seen but by consumers with no intent to purchase.
This age-old concept has been discussed throughout the history of advertising, going as far back as the 1800s when John Wanamaker proclaimed, “Half the money I spend on advertising is wasted; the trouble is, I don't know which half.”
According to data from eMarketer, the online advertising industry spent $25 billion in the U.S. on direct response advertising alone in 2013—representing nearly 60% of the total amount spent on digital advertising. But while many companies are engaging consumers better by taking advantage of the effectiveness of direct response, there are still billions of dollars potentially going to waste that could be saved by data analysis and the right tools to engage the right consumers.
So how can companies combat John Wanamaker's dilemma? One way is to understand the common ways in which businesses waste advertising dollars. Here are some tips on counteracting ad spend waste:
1. Test and test again
Devices, media types, and targeting options are changing constantly. The only way to not see diminishing returns on ad spend is to test and iterate new opportunities so that your marketing campaigns stay ahead of the game. This includes testing ad creative copy, design, placement, etc.
And, testing should be performed on a consistent basis. Something that worked well a month ago might not have the same effectiveness today. The only way to know what engages your customers is to keep testing new ideas.
2. Get engaged
Consumers are flooded with advertising on a daily basis. To cut through the noise brands must get creative and make customers feel connected to their product or service.
One good place to start engaging with consumers is to determine what types of digital media have proven to be the most engaging. This data can help you decide whether you should focus on content, Facebook, or search, for example.
Another strategy is to determine whether you're using keywords that customers use as terms for their research. Messages must also connect with specific consumers, which is an essential way to create lasting engagement. Through long-term engagement, companies are able to foster brand loyalty, bringing back consumers over time.
3. The proof is in the data
The days of blasting one-size-fits-all advertisements to potential customers are over. Today brands have a powerful tool at their disposal that can help aid in the creation of their advertising strategy: data. However, more important than having the data is finding the right way to use it to engage consumers.
By sorting through available data, using self-reported information from consumers, and analyzing trends in behaviors, companies can access a deep pool of potential consumers. With the aid of that data, savvy marketers can then target specific customers and craft personalized messages for each.
While companies allocate huge amounts of annual budgets for advertising, a missed opportunity to engage the right consumers with those ads is not only wasteful of time and money, but a misfire that won't resonate with uninterested consumers.
Every company wants and needs to effectively manage its advertising budget. Keeping the above three guidelines in mind, advertisers can regain control of their budgets and use ad spend to effectively target, engage, and convert consumers into brand-loyal customers. John Wanamaker would be proud.
Patrick Quigley is CEO of Vantage Media