Is Your Ad Spend Really Hitting The Mark? Salesforce Report

Globally around $200 billion will be spent on digital advertising in 2016; What are we buying? Who are we buying it from? And does it have a strong return? Salesforce’s latest research report, The Future of Advertising, examines how marketers can utilise Customer Relationship Management (CRM) data to get substantial engagement from digital advertising spend.

While businesses are investing heavily into digital, the tactics of digital marketers haven’t fundamentally changed. Segment-based marketing means consumers are grouped together by age, gender or location without an understanding of the nuances of an individual. Traditional digital ad spend is causing unnecessary ad spends, more importantly it’s becoming less effective.

The growth of ad blockers and incredibly low click-through rates (CTR) on digital platforms and social media companies (1 per cent on Facebook and 0.11 per cent on Instagram) would suggest it is becoming harder, not easier, to engage consumers through digital advertising.

Digital advertising spend- what are we buying?

The majority of digital advertising spend in the US went to Google and Facebook (76 per cent).

Look at the advertising global revenue at Google and Facebook:

Digital advertising spend- what are we getting in return?

The Future of Advertising report highlights that digital advertising is still a high-volume numbers game, meaning there is still plenty of businesses not using data to better target and engage interested and motivated consumers. The challenge for marketers is to create ad campaigns in which audiences welcome the information and are almost certain to act on a specific deal or a particular offer. But this is no easy task.

But what if marketers could present specific campaign materials to people who actually welcomed the information and were virtually guaranteed to act on a specific deal or a particular offer. Sounds like a pipe-dream right? Wrong, the best marketers are using all the data at their fingertips (e-mail engagement data, past sales, sentiment data) and building lookalike profiles to inform their ad strategy.

The report advises, “As hot as it might have been 18 months ago, re-targeting using only cookies for target management (rather than customer records and email, which inform the advertiser whether a specific purchase was made or not) is now old school.”

For example, travel company Outrigger Resorts did just that earlier in the year in order to acquire new e-mail subscribers via sweeps on Facebook. By doing so, they beat their cost per acquisition (CPA) target by 89 per cent (which surpassed their search advertising goals) and the people were also twice as likely to opt in for promotional e-mail- a key tool for travel marketers.

For a more detailed case study and look into the power of CRM, download the full Future of Advertising Report.

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Collaboration Digital advertising spend Rob Creekmore