You’ve got to spend money to make money. It’s a common adage in the business world and to some extend it is true. Unless people know who you are and what you do, then a business is unable to make a sale. That’s why internet advertising has become such a lucrative industry today.
Several reports indicate than an average of 95% of Google’s annual revenues come from online advertising.
People see more advertising on the internet today than they’ve ever seen before. Although ad blockers and other methods of avoidance are commonly installed on browsers today, there are still about 850 banner ads that get through to an internet user every month. This allows a business to improve their brand lift by an average of 31% just through the use of internet advertising.
- About 8% of all internet users account for about 85% of the clicks that occur every day on internet display advertising.
- The average click rate for a display advertisement campaign is just 0.1%. That means 1 click occurs for every 1,000 ads that are served.
- 50% of the ads that are served to internet users every day are not even seen.
- 4%. That’s the percentage of ad impressions that are delivered to internet users that fall outside of the intended geographic region.
- The percentage of internet advertising that is delivered next to inappropriate content at least some of the time: 72%.
- Non-human internet advertising traffic, including fraudulent clicks, accounts for up to 11% of the traffic a campaign will receive.
- 70% of marketers fail to target consumers with behavioral data.
Are you seeing a 2% conversion rate? Some would say that’s pretty spectacular, but what if you could get a 17% conversion rate? The problem with internet advertising is that campaigns are designed based on demographic needs instead of personal needs. Advertisers need to target niche demographics instead of general demographics to create organic results. That’s how a business can quickly see better results from their internet advertising. Instead of trying to be in the right place at the right time, efforts like these can help businesses create their own moments instead.
How Do People Respond to Internet Advertising?
- 31%. That’s the percentage of people who will respond to internet advertising by clicking on the advertisement.
- The percentage of people who will search the company, brand, or product that was advertised: 27%.
- 21% of people who are intrigued by internet advertising will type the company web address into their browser rather than click on the ad.
- There are 9% of internet users who will research more information about a product or service that was advertised to them?
- 60% of video advertising campaigns don’t have any tools or data to use to track how people are responding to their advertisements.
- 80%. That’s the percentage of internet advertisers that are solely relying on clicks and impressions to measure the viability of their campaigns.
More than half of all people who are interested in an advertisement will visit the company’s landing page, either on their own or through a click. That means getting the attention of the modern internet user is a key factor in whether or not a campaign will be successful. Creative ads that show valuable products or services within the eyesight lines of the user are the best result. How is this accomplished? By what is known as the mid-roll. When an advertisement appears in the middle of content, it has a 97% interaction rate. If it happens after the content, the interaction rate is halved. Interrupting the browsing experience can be dangerous, but it also has shown to be beneficial.
Are Businesses Just Wasting Their Money?
- Mobile devices account for 3% of advertising spending online today.
- Display advertising accounts for about 1% of upstream traffic to department store websites when there is an active campaign.
- People are statistically more likely to complete training as a Navy SEAL, climb Mount Everest, or even survive a plane crash than they are to click on a banner advertisement.
- Advertisers in the United States account for 1 in 4 global online display impressions.
- 12%. That’s the percentage of internet users who trust search engine ads.
- The percentage of LinkedIn users who say that they’ve clicked on at least one advertisement on the social network: 60%.
- 74% of businesses are willing to use real-time bidding for online display advertising so they can get impressions in quality environments.
- Video advertisements account for 3% of the total amount of time internet users spend watching video content.
- The Internet accounts for 26% of U.S. consumer interaction with media and 22% of advertising spending.
- $400 million. This is the estimated amount of fraudulent click activity that is generated annually through internet advertising.
On the surface, internet advertising looks like a waste of time and money. Hundreds of millions of dollars are lost through fraud. Less than 1% of upstream traffic to some industries comes from internet advertising. What we are learning is that where advertising is displayed is just as important to receiving a click as the creative power of the ad itself. The figures from LinkedIn are incredible. Facebook also sees high levels of clicks in some industries. For advertising to be effective, you’ve got to go where the people are. In online terms, people are on social networks. That’s why advertising there seems to be more effective.
Here’s Why Internet Advertising Matters
- 78% of people will trust the recommendations of other customers, which is why 1 in 4 advertising dollars will be spent online in the next year.
- 85% of internet users have used an e-commerce platform to make at least 1 purchase. That’s 875 million people who could be customers, a figure that is up 40% in the last 24 months.
- For American business owners, not advertising on the internet means a loss of over 78% of a targeted demographic.
- Internet advertising is available 24/7, which means a business can reach the same level of people who watch the NFL Super Bowl every year for 25% of the price.
- A click on a social networking site is often the first step toward a sale, which means social internet advertising is undervalued by as much as 116%.
- Internet advertising is seeing a 13.7% compound rate of annual growth, which means FY 2016 should bring in $67.4 billion in advertising revenues.
- The CTR for Facebook ads has risen by 275% since 2012.
- Retailers who have started using Facebook ads have seen their CTR rise by 4x over the last 24 months.
Internet advertising only works if you serve the proper demographics where they tend to congregate online. For many businesses, that means their internet advertising should be focused on Facebook. B2B could see better results from LinkedIn. The point is that you’ve got to know people in order to understand what they want. There needs to be an authentic desire to build relationships with customers. When an internet advertising campaign can successfully communicate this, then the results will speak for themselves. If they cannot, then the outcome will be much more pessimistic in nature.
Where Should You Be Advertising?
- Google brings in about 33% of all online advertising revenues every year. This is about $40 billion per year.
- 5%. That’s the percentage of advertising revenue that Facebook brings in.
- A first-position internet advertisement through Google has a CTR that is above 7%, but 50% of those clicks are ultimately deemed to be accidental.
- The overall CTR average for a Google advertisement is 3.16%.
- Just 1.2 million businesses around the world are using Google for advertising purposes.
- Over 5.3 trillion display ads were served to U.S. users last year, partially due to the fact that mobile CPMs are now just $0.75.
- 25-34-year olds will see 2,094 banner ads per month.
- 15% of internet users trust the banner ads that they see at least some of the time.
- 445 different advertisers delivered more than a billion banner ads in 2012.
The point of emphasis in the world of internet advertising has long been quantity over quality. The banner ad is nearly 20 years old and many businesses have gone to dramatic lengths in order to make these ads work. One business, Luma Partners, has over 300 different logos for internet advertising, but it works. A business can be successful only if they’re willing to think outside of the box. Just throwing up an ad isn’t going to work. You’ve got to stand out, be different, and be valuable all in one simple banner ad. It’s a tough task to take on, but with trillions of ads served to viewing eyes, it is exposure that is worth the risk.