Is the Decline of Digital Advertising Changing the Future of eCommerce?

October 15, 2015
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I don’t have to remind you that digital advertising in constantly evolving and changing. When we compare digital advertising from 10 years ago to online advertising today, there are significant differences. This means that the only constant in digital advertising is “change” which begs the question: will digital advertising as we know it cease to exist at all?


The Signs Digital Advertising is On the Decline

In the past, advertising for your ecommerce store was simple: pay for some banner ads or pop-ups and watch the visitors start pouring in. I wish it were still that simple! The landscape of internet advertising today is very different from what it was, and will only continue to evolve.

digital advertising changing landscape

There are many signs that digital advertising as we know it is on the way out and that new ways of communicating with customers will need to be used.

1. It Isn’t Trusted

Over the years people have become less and less trusting of advertising in general. Many people say that the wealth of information available on the internet has turned more people into informed consumers. I find it ironic that the tool that helps inform consumers is actually the least trusted of them all.

digital advertising decrease trust

Although people use the internet to make more informed decisions, read reviews, and see what friends are saying, they are also very weary of the ads that are displayed there. According to eMarketer, digital advertising is the least trusted form of advertising.

But what does this mean for an ecommerce site? Well, the banner ads and retargeting you are currently doing is not trusted by 56% of the viewers that see it.  With so many new products and services available online everyday, I can only assume that number will increase.

2. It is Being Ignored

If the average internet browser doesn’t trust your digital advertising, that assumes they look at it. You have to see something to form an opinion, and the majority of the internet is actually ignoring your ads.  

digital advertising percentage ignored

In fact, 83% of digital advertising is ignored. To be more specific, banner ads are ignored by 73% of viewers, social media ads by 62%, and search engine ads by 59%. Social media giants like Facebook have been working hard to dispel these facts, inflating average viewing times by up to 80%.

If you are an ecommerce merchant this should really scare you considering how expensive these marketing channels are.  With over $194 billion dollars being spent in the global digital ad market, guaranteed viewership is a must.  Otherwise, you could be throwing your money away.

3. It is Being Blocked

Your digital advertising could be ignored and not trusted, but even worse than that is having it blocked completely. Unfortunately, this is a reality of today’s online landscape and it is a trend that is only getting worse over time.

digital advertising adblock users

27% of surveyed Americans say that they use some form of adblocker, and according to PageFair it has gone from tech enthusiasts to the mainstream. 144 million internet users are now using an adblock tool and that number is increasing every year.

You may ask yourself why are so many people are blocking ads. The answer is simple: they just don’t want to see them. In other words, they just don’t want to be bothered by what you have to say.  This means that you are paying good money on digital advertising just for it to be ignored, blocked, or not trusted enough to warrant a click. What is an online store to do?

 

What Should an eCommerce Site Do Instead?

At this point you should be asking yourself, “If digital advertising is on the decline, how do I get customers to my site?”

digital advertising adjusted marketing budget

The short answer is that you should adjust your online marketing budget! You should not be devoting 80%-100% of your marketing budget to these channels any more. Does that mean you should pull out of them completely? No, but you need to do more to help them out.

Here are a couple of things you can do to battle the decline of digital advertising.

Create a Content Marketing Strategy

I cannot stress the effectiveness of a content strategy enough! The reason you are reading this post is because you had a question and are finding the answer. Similarly, your shoppers have tons of questions that you can help answer with a store blog. 

digital advertising diverse content

But a content strategy doesn’t need to be a blog – you can also use videos and pictures. Many people have found great success using video and vlogs to boost ecommerce sales. You can also incorporate your social media by posting relevant images on Instagram and Pinterest to get people to follow and buy from you!

 

 

 Many successful ecommerce sites started off producing content and later evolved into an online store. em cosmetics is a fantastic example!  I am a firm believer in using content to drive ecommerce success.

Start Using Retention Marketing

Since digital marketing is becoming more expensive but less effective you need to make those digital marketing dollars stretch as far as possible. It is no longer profitable to pay to acquire a customer for one purchase. You need that shopper to come back and become a repeat customer, because a second purchase is worth more to your store than an additional one time customer.

digital advertising second purchase

Focusing on repeat customers is known as a retention marketing strategy and it is being implemented by many of the webs top ecommerce players. However, the majority of ecommerce stores are still lagging behind, as you can see by the average ecommerce marketing spend below.

digital advertising marketing comparison

With the decline of traditional digital advertising, retention marketing tactics are going to become more popular and profitable than ever before. Stores that figure out retention marketing first are going to put themselves in a much better spot than those who continue to pour dollars into traditional forms of advertising.

Some examples of retention tools you can implement include live chat software, Helpdesk software, and loyalty programs like Smile.io. You can also use our “Complete Guide to Retention Tools” to find the best tool for your store’s individual needs.

 

How eCommerce Will Deal With The Decline of Digital Advertising

I hope that you are now more aware of the direction digital advertising is going how you need to start preparing for it. By using these strategies effectively, even smaller ecommerce stores can successfully compete with bigger players like Amazon and Wal-Mart.

digital advertising strong content marketing

Strong content marketing and a solid customer retention strategy ensures that you are getting seen by your target audience, and that you are keeping your customers in the long term. If you want to be successful in ecommerce you are going to need to keep as many of the customers you acquire as possible. It is much easier to keep these customers than to fight for their attention in the digital advertising arena.