“Half the money I spend on advertising is wasted,” Philadelphia department store magnate John Wanamaker was famously quoted as saying. “The trouble is I don’t know which half.” And while the markets, methods, media and advertising choices have changed dramatically amidst the digital technology revolution, most of today’s marketers continue to struggle with measuring the effectiveness of advertising campaigns. Regardless of size, advertisers need to formulate a strategy that will focus advertising spend to specific customers and market segments, while also instituting measures to evaluate the effectiveness and return on investment. The benefit of modern digital technology is revolutionizing the art of connecting with customers, reaching out to consumers were they work, play, live or shop. John Wanamaker would certainly be impressed with all the bells, whistles and pop-ups but would he be any more certain as to how much his advertising resources were going to waste?
Recently the confidence level in the metrics utilized by advertising firms and digital media outlets to measure the effective reach of their ads is taking a credibility hit. Ad blocking or ad filtering, the removing or altering of advertising content in a webpage by the reader is becoming pervasive in the web advertising space. Ad blocker software is hitting publishers hard and just at a time when they thought they solved the problem of generating an income stream from free news. Adobe says that $21.8 billion in global ad revenue will be blocked this year by consumers using one or more ad blocking software programs. The problem is that internet users, particularly younger ones, have decided they hate online ads. As one woman said in a recent Reuters report, “Online ads are obtrusive, obnoxious and annoying.” For the marketer, it would be easy to overlook the consumer’s complaints and the publisher’s problem with their business model, but the cost issue of ineffective advertising runs downhill, to the advertiser. As well, the negative impact on an annoyed and frustrated consumer would most likely manifest itself with the brands reputation not the publisher or advertising agency.
One allusive aspect of advertising is the question of how much is enough? At what rate of frequency is an optimal level achieved and at what point is the economic law of diminishing return crossed? When does more advertising produce less positive results with consumers? With the popularity of ad blocking software on the rise, it is fair to say that advertisers have, at the very least, crossed that threshold. Chris Payne, public affairs manager and head of the digital advertising unit at the WFA, says, “Ultimately, how we measure success within the industry will affect behavioral change. The industry has struggled to come up with metrics that reflect the real value of advertising in the eyes of the consumer. Current indicators of success, such as pay-per-view, aren’t necessarily indicative of a happy consumer.”
Dr. Johnny Ryan, head of ecosystem for PageFair, one of five major providers of ad blocking software, commented, “Hundreds of millions of users have rebelled against the status quo in advertising. We are seeing the collapse of the mechanism that has supported the diversity of content on the open web since the 1990s. Blocking is an opportunity to undo the mistakes of the first 20 years of advertising on the web.”
Wanamaker’s dilemma remains intact for advertisers, even today. The size of the advertising budget doesn’t matter. The only difference between a small operation and a mega business is the size of the numbers. In an intensely competitive environment, neither can afford wasted resources. Due diligence is imperative and a strategy focused on specific goals and objectives and measured by credible metrics is essential for the success of any advertising campaign. How much are you wasting?