Digital ads are a crucial part of a business marketing strategy because these days people are more engaged with digital devices. They decide what to buy and from which brand, during the day while using their smartphones. they browse their favorite website or stream the TV show or use social media. So, whenever they are ready to purchase, they’ll remember from where they can buy their needed product.
1.Introduction to digital Advertising:
Expenses for advertising create a great deal of costs for companies. Nowadays, companies use more of internet advertising than traditional ones, because people use internet more and more. so this industry has developed widely. Online advertising is known with other names like digital advertising, online marketing, Internet advertising, or web advertising. In comparison with traditional channels which refers to mail, billboards, &magazines; the field of digital advertising is pretty young. Digital advertising is about marketing through online channels, like websites or Podcasts, webcasts, movies, TV shows and music videos that are common forms of streaming content. Digital ads include different formats of media like text, image, audio &video. they can help business brand to achieve various targets within the funnel of marketing. for example: brand awareness, launching brand new products, and repeated sales.
Between different forms of internet advertising, paid search advertising which is known as “search engine marketing(SEM)” is the top-grossing advertising format. In my article, I want to explain that the experiments revealed SEM has a limited effect on the performance of a prominent company like eBay, P&G, Uber, Airbnb, etc; indicating that, on average, the channel has proven to be ineffective.
The technology enables advertisers to monitor various factors that help in measure the effectiveness of advertisements. An online advertiser will receive comprehensive information about visitors who have accessed to their website through the ad(ad-driven traffic), the cost associated with the ad(advertising cost), and by utilizing their internal data, they can determine if the visitor made any purchases on the website(conversion rate). In principle, this should enable the advertiser to calculate the return on investment(ROI) since both cost and revenue data are accessible at the individual visitor level. In these cases, the individuals who choose to click on advertisements are loyal customers or individuals who are already well-informed about the company’s product.
2.Brand search experiments:
In March 2012, eBay initiated a study to examine the effectiveness of brand keyword search advertising. Brand keywords refer to search queries that incorporate the term “eBay”, like “eBay shoes”. To evaluate this substitution theory, eBay ceased advertising its brand-related terms on Yahoo! and MSN. The examination unveiled that almost all (99.5 percent) of the lost click traffic from discontinuing brand keyword paid search was instantaneously recouped by natural (organic)search traffic from the platform, in this instance, Bing. In other words, the substitution between paid and unpaid traffic was nearly the same.(figure below)
The search platform generates both paid and organic clicks. When advertising was halted, paid clicks dropped to zero, but there was a significant increase in organic clicks. This suggests that removing the advertisements enhances the visibility of eBay’s organic search results. Given that users are searching for eBay, it’s reasonable that closing the paid search route to their target simply redirects traffic to the next most accessible route, which is organic search, and this doesn’t cost the advertiser anything.
3.Non-brand keyword controlled experiment:
If digital ads displayed for users who are not aware of product availability on advertiser’s website, the ones who searched for non-brand keywords or seeking for product information; so, there would be a potential to attract and lead to the sales which might not have been occurred otherwise. ebay, which has an extensive placement for over 100million keywords, is an ideal platform to test effectiveness of paid search ads for non-brand keywords to ensure a broad reach for users who are interested in different products.
Therefore, Analyzing a complete keyword set enables a direct assessment of the value for informative advertising .it will shed light on how users with different experience levels respond. While the user behavior data from the past purchase can segment eBay users into groups with different experience levels, but the challenge of endogeneity would remain.
Also, It’s worth mentioning that non-brand ads maybe attract users who are already familiar with eBay, even in the absence of ads.
4.impact of controlled (turn-off) experiments on major or small companies
This article illustrates how some business operations remain as usual even after cutting digital ad spending, for instance we had P&G which cut $200M from digital ad budget and the business results didn’t change. In addition, Chase reduced site numbers for displaying its ads from 400,000 to 5,000 and it didn’t acceft their business activities. Uber which cut $120M from app install budgets,but people still install its apps.Airbnb, spent $800M less on performance and the traffic if their website remained 95% of its previous levels. eBay cut paid ad search spending in third of country and saw no drop in visiting and buying users.
when marketers realized the achievements of companies such as P&G, Chase, Uber, eBay, and Airbnb. So they tried to conduct their own “trun-off” experiments. These experiments emerged during the pandemic (2020), when digital marketing expenditures were paused but sales remained or even had a grow. The ongoing environment necessitated marketers for a closer evaluation of digital spending. Although most marketers could not afford to halt large budgets like P&G or Airbnb but they were implementing smaller measures to test and finally to enhance their digital marketing approaches.
These measures were consist of 1.conducting targeted audience experiments, and 2. performing A/B testing, and 3.measuring incremental outcomes to optimize their endeavors. And as a result , these experiments should provide information on domains, app names, and the quantities of ads displayed on each platform.
In context of turn-off experiments, on marketing funnel, we can emerged that a significant portion of the paid ad budget was allocated towards targeting warm and warmer users. The ones who were already familiar with the website and the brand. so the paid ads did not have a noticeable impact on overall conversion rate.
In conclusion, with an active movement of turning off bad domains and application marketers can have a huge improvement in their digital marketing strategies. this approach can prevent feeding criminals or wasteful spendings from their advertising budget. Likewise, by removing ad targeting parameters which are not effective regarding website visitation patterns could save money and lead to better outcome. For example, customers often found these targeted ads as irrelevant that removing them is a wise decision.
In addition, changing our strategy from programmatic ad buying to direct ad buying from a reputable publisher with real human audiences would result in a great deal of change in business outcomes. this change ensures that the budget goes to display ads and not to benefiting some opportunistic individuals.
Finally, this approach represents a genuine digital marketing strategy ,by reaching real audiences which result in maximizing the effectiveness of advertising efforts.
In a world where digital marketing strategies are constantly changing and evolving, the turn-off experiment has emerged as a powerful tool for marketers who seeks to maximize their impact. So, by challenging long-standing practices, as well as making data-driven decisions, and prioritizing true incrementality, marketers can navigate the digital landscape with greater efficiency.