Direct Response—Not Branding—Dominates Digital Ads

A year ago, my fellow ViralGains blogger, Hannah Brenzel, published the article “Marketers Shift Online Advertising Efforts to Branding,” as it was looking like the industry would trend toward more branding-focused advertising. Today, I’d like to revisit this issue, as it appears that—despite the predictions of Hannah and many other marketing authorities—advertisers continue to place more of an emphasis on direct response efforts.

According to the CMO Council Report, 63% of marketers stated that they planned to increase their online brand advertising budgets in 2013, while only 51% would increase direct response spending.

The result? Of the $24.9 billion spent on digital advertising in 2013, more than half—58.4%–went towards direct response.

Direct Response v Branding

2014 isn’t proving to be much different. This year, digital ad spending will reach a major milestone: $50 billion. However, marketers aren’t sticking to their word, as direct response continues to eclipse branding, representing 59.1% of the digital total for the year.

Ad Spending Share

So maybe our predictions didn’t pan out as we expected them to. But hey, the world—and the advertising industry in particular—is extremely volatile, so this didn’t come as a major surprise.

What is more shocking, however, is that the major roadblock to the growth of branding initiatives is the very thing that we all thought would provide it with boundless marketing potential. And the fact of the matter is that it’s not a large barricade at all, but something much more pocket-sized: mobile.

The surge in mobile is making it harder for branding-based ads to keep up with the competition, as Ezra Palmer, senior-VP and editorial director at eMarketer, affirms: “More than anything, the growing digital space means that direct response behaviors can be completed far more easily.”

The availability of DR-friendly ad units, like app-install campaigns, is causing marketers to push more ad dollars into those efforts. Additionally, the growing popularity of location-based technology, which lures consumers through mobile ads, lures marketers toward direct response as well.

While mobile does provide the kind of boundless marketing potential we had hoped for, branding efforts need to fight back and overpower the limitations it sets on its effectiveness. One of the biggest hindrances to branding has been the futility of messaging on mobile. The problem is quite simple: small screens aren’t the best medium for desirable and lasting brand communication.

Spending Channel

It’s obvious that mobile is starting to take over ad spending that was previously dedicated to desktop-and-branding-friendly advertisements, and that trend will most likely only continue to grow.

By no means is this the death of branding on the digital ad scene. The key for brands to combat this digital takeover is to play into its strengths—and it’ll return the favor.

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