How Digital AdSpend Has Grown in 2020

The shift towards digital has been a growing tendency in the last decade, with a growing number of businesses jumping on the online marketing bandwagon. However, something unexpected happened in 2020 that accelerated the rhythm of digitalisation in all areas and made businesses of all sizes take notice of digital marketing practices, such as investing in digital adspend and digital advertising – the Covid-19 pandemic. More and more aspects of business and marketing have moved online and are investing in marketing resources such as pay-per-click advertising. Due to lockdown and the subsequent social distancing rules, the way we interact with businesses and service providers is rapidly evolving.

Previously on the VMA blog we presented the main predicted marketing trends for 2020, but little did we know that our customers and other Australian businesses were going to catch up on these trends at a faster rate than expected:

  • Hyper-targeting
  • Personalisation
  • Customer retention
  • Content marketing
  • Voice search
  • Shoppable posts
  • Interactive content
  • Smart bidding in Google Ads

What we have observed is that numerous entrepreneurs have been doing their homework to catch up on the newest digital marketing strategies and prepare for the post-Covid-19 crisis period.

Why we are moving away from traditional media:

The general and continual move away from traditional advertising and towards digital can be explained from an economical point of view. Digital advertising and marketing are simply more cost-effective and produce better results than traditional promotion tools. Determining the reaction of your audience to printed ads was very difficult to attain, while digital marketing benefits from advanced tools for monitoring and evaluating your campaign success in real time, at any given moment. For example, you can find out how many mail recipients have opened you emails and how many users have clicked on your pay-per-click ads – so you can focus your financial resources and efforts on the areas where you are likely to obtain the best results.

In today’s digital era, consumers feel more empowered, metrics are more accurate, and there is a much broader audience presence than ever before. The days of loud TV commercials are over in decline as consumers move to their social media streams, where they have more control over the type of promotional content they are receiving and engaging with. On the other side of the fence, businesses notice that digital advertising brings more leads with less cost and real-time tracking allows better targeting – it is easy to understand why pay-per-click is on the up and print ads are on the way out.

How Covid-19 has affected digital adspend

In a world where people had to spend more time indoors and interact less with people and places outside their home, advertisers had to reach their audiences where they spent most of their time. They did this by reaching out to them on their computers and smartphones. As a result, digital adspend is expected to increase by 6% for FY2020 compared to FY2019; the most impressive gains have been observed in paid search and social. In 2020 the ad spend total for traditional media channels has dropped by 24% from the previous year.

The most popular and effective forms of digital advertising and why you should invest in them:

There are two main types of digital ads, each with slightly different digital ad spend models:

  • PPC

PPC or pay-per-click advertising are those advertisements that appear alongside search results on Google and other search engines. The principle behind these ads is very simple: advertisers pay each time a user clicks on one of their online ads. You can place a daily limit on the number of ads that are displayed and charged for when someone clicks on them. Pay-per-click ads usually appear when people search for products and services online such as looking for something specific to buy; for instance, when someone is shopping for a pet store near them, their search triggers PPC ads that promote that type of service.

pay-per-click advertising

Having your ad displayed for relevant searches is not guaranteed, though; you need to bid on keywords that are relevant to your business. The auction begins when someone searches for something on a search engine, and ads are displayed only after meeting a set of criteria, including bid amount and the quality of the ad.

Aside from choosing the right keywords, you also need to carefully prepare ads for your campaign, as their quality has a significant impact on your digital advertising success. A PPC ad usually contains a headline, a URL, and a description. The appearance and effectiveness of ads can be enhanced with ad extensions (site link extensions that direct users towards pages on a site or call extensions which add a phone number to the ad for contact during business hours).

Is it worth doing pay-per-click advertising? We’d say it is; Google indicates that for every $1 spent on Google Adwords, businesses earn an average of $2.

Since so many people spend a great deal of their online time on social networks and use them to access information about products and services they are interested in, social ads have become increasingly popular in the last years. Social ads are simply online ads that are displayed on social networks, based on your demographics and interests.

Facebook ads are among the most popular and the first to have been launched on the market. This social network with the largest number of subscribers in the world lets you create and implement three types of campaigns, depending on the goal you want to achieve. These 3 campaign types are based on a marketing funnel, looking at where your potential customers are in relation to engaging with your business.

Awareness campaigns inform your target audience about your brand – providing an alternative to existing products or services in the market; consciousness is equivalent to positioning and is applied when your audience already knows you and you want to consolidate your position; conversion campaigns enable you to take the last step so people who know you and look for you can also buy from you.

The other social networks have also introduced advertising options as part of their platform services, each striving to optimise their customers’ digital adspend: Instagram, YouTube, Twitter, etc. – every social network these days has its own various digital advertising options.

Advertising through social media comes with multiple benefits, such as growing your fan base, using customer generated content for ads as it performs better, targeting returning customers, and performing A/B testing by using platform-provided analytics software.

Digital adspend on social networks was predicted to increase by 20% in 2020, and year over year social ad impressions are up 20%. An impressive 52% of all online brand discoveries happen in public social feeds, and 27% of internet users say they find new products and brands through paid social ads.

One thing to be extra careful about – if you decide to use digital advertising to promote your business, never compromise on quality. Weak social ads create negative emotional responses in less than a second, so, without high-quality copy, effective CTAs, and quality visuals, you will be given a negative response from users and you will be damaging your brand reputation and perception on social platforms.

The benefits of using a digital marketing company for your digital advertising campaigns

Investing in digital advertising is very simple and effective, but setting up your pay-per-click or social ads can be quite time-consuming, especially if you are inexperienced or unfamiliar with how digital adspend works. In order to ensure optimal return on your digital ad spend, we recommend getting help from the experts; contact VMA today and we will do the leg-work to set up successful online ads for you.