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Shifting from Display Ads to Relationship Ads

  • November 23, 2017
  • Keyur Soni

Many CMO’s are nowadays shifting their ad spend to building relationships with their customers. Today society doesn’t need advertising the way it used to be, people are becoming less receptive to interruption-based display ads.

So what should it be?

Advertising has always been a very important part of our lives and it holds true even today in the modern digital world. However, with the fast paced mobile life that we all live, it is important that these ads reach the customers in a fast and responsive way, creating an aggregate system through which all the companies and their consumers can negotiate shared commercial interests.

Digital disruption

CMO’s around the world are still using “interruption-based” ads and as we see today, consumers eventually learn to tune the ads out after sometime. Thus, advertisers are introducing new ideas for advertising:

Money movement

Things like in-app purchases and Kickstarter campaigns are making it easier to spend money on the things they like in a more frequent manner.

Accessing markets

Big marketplaces like Amazon apart from selling products, they also publish information about products and suggest similar products for cross selling which creates a big opportunity for the merchants.

Product information

User generated reviews, suggestions, Youtube videos about products is helping consumers make purchase decisions.

Are display ads effective anymore?

The latest report by Forrester on display ads contends that US marketers wasted roughly $7.4 billion in 2016 on display ads alone.

Of that ad spending, only 40% was actually seen by a real human. Meanwhile, a growing number of US online adults have installed ad blockers to avoid these types of interruptions.

Some key findings:

–          38% of US online consumers have an ad blocker installed

–          the average click-through rate of a display ad in the US is 0.35%

–          50% of US online adults actively avoid ads on websites, while 47% avoid mobile in-app ads

–          67% trust online reviews while 47% trust display ads that appear next to search results

The power of relationships

If display ads are not so effective as they used to be, then what should CMO’s do? It is fair to say that they will start spending some of their money to building relationships with customers and not just focus on display ads.

Some figures are highlighted in the Forrester report in order to illuminate this shift:

–          56% of loyalty scheme members actively seek out a deeper connection with brands they like

–          subscription based models are growing in number and popularity

–          33% of US adults already use intelligent agents such as Siri

–          by 2021, 16 billion IoT devices will be sending customer data to brands

The report states:

“CMOs will go beyond merely talking to customers by building meaningful relationships with them. This is not the tired CRM of keeping customer information and transaction histories in multiple databases; rather, it’s a relationship that is high-frequency, emotion-rich, and hyperconvenient.”

Full report is available here. https://www.forrester.com/report/The+End+Of+Advertising+As+We+Know+It/-/E-RES137501

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