And that’s a good thing.
The pandemic is expected to permanently erase certain businesses, or in some cases, entire industries.
Video game chain GameStop, which was already on the ropes due to the industry’s transition to distributing games digitally, isn’t expected to make a comeback post-quarantine. The IT industry is expected to suffer a similar fate — offices are moving their information infrastructures to the cloud and the pandemic is accelerating that transition. We can anticipate the same from archaic industries like physical mail and newspapers.
We might be able to add display advertising to the list of industries that won’t rebound after the pandemic is over, too — and that’s probably a good thing.
Experts have been bemoaning the existence of display advertising for decades now. Display ads were considered innovative when they first appeared in 1994, as part of an AT&T campaign on HotWired (WIRED magazine’s old digital destination). It didn’t take long for banner ads to become spammy and annoying and a detriment to the user experience, though. Even the guy who invented the banner ad is embarrassed by its legacy.
Yet publishers still rely on them and brands continue buying them. Until the pandemic, that is, during which spending on display advertising has fallen off the proverbial cliff. The majority of U.S. publishers have seen a “significant” decrease in display ad CPMs during the quarantine economy, according to a recent report by industry trade group the Interactive Advertising Bureau.
It’d be easy to chalk this up to advertisers pulling back on ad budgets due to the economic downturn we’re experiencing. Brands are being more judicious about their media spend, but a closer look at the numbers reveals they’re pulling back in certain areas more than others and that display is being hit the hardest.
Display ad CPMs have decreased the most of any advertising channel during the quarantine, with a 34% drop for desktop display ads and a 33% dip for mobile, reports the IAB. Connected TV and over-the-top TV advertising declined only 6%, however, showing streaming TV ads are far more resilient than display.
This data confirms what we’ve known for years: Display ads suck. They’ve been a drag on the industry for a decade now and their demise is long overdue. Get ’em outta my gosh dang face!
The demise of display ads raises the question of what kinds of ad brands should buy instead. A large part of why display ads have overstayed their welcome is that they’re cheap and easy to buy. A media buyer can dump a bunch of dollars into an ad exchange and claim the brand is achieving reach (which is a meaningless metric to begin with).
Rather than spend on a large number of useless display ads, brands can (and should) divert their ad spend to high-performing ads, such as podcast reads, email blasts and fine-tuned content marketing partnerships. These kinds of campaigns require more time and creativity, but they also allow brands to gather data on consumers, retarget them with even more relevant advertising and push them further down the purchase funnel. Which is to say these campaigns provide a greater ROI. Which is to say they’re worth the extra effort.
Advertising tends to be a “you get what you pay for” kind of thing. Brands can buy a metric shit-ton (that’s the technical term) of display ads for next to nothing and pretend that they’re influencing a wide swath of consumers, but they’d be kidding themselves. Those display ads are useless, and that approach values quantity over quality. They might as well be screaming into the abyss.
It might have taken the pandemic for brands to realize this, but it’s a step forward for the industry, nonetheless.