For all its universal adoption, online display advertising never had a golden era. Ever since the first banner ad debuted in 1994, Web site visitors have treated display ads as little more than an annoyance, and publishers have watched as CPM rates, never high to begin with, spiraled downward as supply continued to far outstrip demand.
You would think that this would make display advertising ideal for brands--seeing as how it’s a buyer’s market--but studies don’t bear this out. These ads have an average click-through rate of .1% and only 8% of all Internet consumers account for 85% of all ad clicks. On mobile, the picture is even bleaker, with 40% of all ad clicks made by mistake.
It’s getting increasingly difficult for users to even see display ads, much less click on them. Ad-blocking software is experiencing a meteoric rise, reaching as high as 40% adoption in some European countries. Many of those who haven’t installed ad blockers experience what is called ad blindness, which is when you subconsciously ignore any ads on a page. (What was the last news Web site you visited? I bet you can’t remember what ads were on the page even if you were there a few minutes ago.)
Perhaps this is why we’ve seen so much industry attention focused on both content marketing and native advertising in the past year. Two-thirds of marketers say they’re going to increase their native ad budgets in 2015. Half a decade ago these were obscure buzzwords, but increasingly we’re seeing brands shift budgets and focus toward creating original content, and in many cases this content doesn’t even resemble an ad or directly promote a product. According to Business Insider’s Intelligence research, native advertising spending will reach $7.9 billion this year. By 2018, it will balloon to $21 billion.
Why the sudden shift? Because it works. Content marketing has several advantages over display advertising, and as mobile users continue to make up an ever-expanding portion of the Internet population, these advantages are only becoming more stark:
• The shift from push to pull: For most of its history, advertising has been an attempt to waylay you while you were traveling to somewhere else, whether it’s a billboard while you’re driving your car or a pre-roll ad as you wait for the actual video you came to see. Content marketing, when it’s done well, is not only sought out by users who are interested in consuming information, but it is then shared to their own social feeds, thereby making those people evangelists.
• Resistance to ad blockers and banner blindness: Because the content exists within an actual content feed, it’s more difficult to subconsciously block it out, and ad blockers won’t remove it. According to some estimates, readers look at native ads 52% more often than display ads, and they are 25% more likely to look at native ads than banners.
• Higher engagement: Even if you happen to look at an ad, it’s for a few seconds at most. A long-form article on your company blog, however, will keep someone engaged for several minutes. And every second people spend on your content is another second they’re being exposed to your branding and associating it with a positive experience.
• Content lives forever: An ad only exists for as long as you’re paying for its placement. A piece of content you create lives forever and can continue providing value long after it’s first published. From an SEO perspective, it’s easily discovered in search engines, and you can also continue to link and refer back to it in future content offerings.
• Much higher-click through rate: The average click-through rate for a native ad is 1.4%, which may seem small, but it’s more than 10 times higher than the click-through rate for display advertising. That’s because content that actually aims to tell you something interesting and informative is much more enticing than a branded ad.
• It performs better on mobile: Part of the reason display advertising performs so terribly on mobile is because brands have much less space to work with. You can’t plaster a bunch of ads on a sidebar and trust someone will zoom in to see them. Mobile responsive content, on the other hand, is designed to fit the screen and be read just as any other article would be.
Will traditional advertising ever go away? Probably not. In fact, one could argue that comparing display advertising and content marketing isn’t apples to apples because they don’t have completely overlapping purposes. Display advertising is primarily focused on raising brand awareness, and while content marketing can certainly perform this function, it has a more specific goal to drive engagement and a number of other KPIs.
Is content marketing more labor intensive and expensive than display advertising? Definitely, especially since it can take up to six months of consistent content creation before you start seeing results.
But when you consider the long-term ROI of having a piece of information that improves your users’ understanding of a topic, it’s not difficult to conclude that an all-in content strategy will help you develop a better relationship with your customers.
John Wanamaker famously once said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." But the rise of content marketing, along with ever-improving marketing analytics platforms, ensures we’re quickly approaching a point in which this old adage will be a thing of the past.