Rising costs of digital advertising

Rising costs of digital advertising – why and what to do?

$18. That’s how much the average action will set you back when advertising on Facebook. In fact, the cost of digital advertising is rising at rates close to 5x the inflation.

Your digital advertising budget doesn’t get you the same results as it used to.

So, why do digital advertising costs continue to rise? A few reasons:

  • Browser habits are changing. From a longer discovery habit to actionable, short bursts of activity.
  • Increase in competition for the available ad inventory drives bid prices up.
  • Ad networks are consolidating, meaning fewer players in the market.
  • More fraudulent traffic that wastes your ad budgets.

It doesn’t have to be all doom and gloom.  It isn’t an unexpected development. Compared to other media with traditionally the same reach, digital advertising is still very cost-effective.

What can brands to today to lower digital advertising costs then?

  • Target more specific audiences which increases chances of high conversion rates and exploit retargeting segments.
  • Reduce times where your ad audiences overlap with each other. Don’t compete with yourself.
  • Be relentless in tracking and following up how efficient ads and creatives are.
  • Take advantage of video which is currently priced much cheaper per action than images or links.

One of the simplest ways to get more for your budget is showing up early when your competitors are fewer. It is only natural, especially in an auction, that bid prices rise as the amount of competitors rise more than the available inventory.

Since showing up early isn’t always an option—we need to use trusted platforms too, after all—working with a specialist (maybe us?) is always a good option.

This post originally was sent as the september edition of our insights newsletter to our clients. Sent once a month, it gives our clients the condensed, key insights that they need in digital marketing.