Evolving Landscape of Digital Marketing

The past five years have been a whirlwind of change, from the economic upheaval of inflation and volatile job and housing markets to the global disruption of the COVID-19 pandemic, to name a few. These unprecedented events have impacted our personal lives and profoundly reshaped the marketing landscape, forcing businesses to adapt their strategies in response. One key trend is the decline in click-through rates (CTR) for display advertising. Since 2018 the average CTR has decreased 76%. (source: wordstream).

Supercharging Auto Marketing with Life Event Data

The Decline of Display CTR: Why Fewer Clicks?

Let’s delve deeper into the factors behind this decline and explore strategies for navigating the new digital landscape:

  • Channel Overload: Companies rushed to capitalize on the increased online presence during the pandemic. This fierce competition for attention inevitably led to banner blindness and a decline in CTRs for traditional display ads.

  • Consumer Fatigue: Bombarded by ads across countless platforms, consumers have developed a tolerance for anything that doesn’t immediately grab their attention. They’ve become more selective and less likely to click on generic or irrelevant messages.

  • The Rise of Social Commerce: The pandemic accelerated the adoption of social media as a crucial touchpoint for product discovery, research, and even purchase. This shift in consumer behavior diverted attention away from display ads and towards platforms like Facebook, Instagram, and TikTok. TikTok Shop is a great example of a new wave of social commerce.

CTR by Industry

While we have seen the national click through rate decline since 2019, certain industries have seen an increase, like auto, B2B and Finance. (source: wordstream 2019 and 2024) 

The Cost Conundrum: How Does it All Play Out? 

While CTRs decline, media buying costs are on the rise. Here’s a breakdown of some key cost factors:

  • Soaring Social Media Costs: Social media platforms like Facebook, TikTok, and Snapchat have witnessed the most substantial increases in ad costs since 2020. Facebook ad costs have skyrocketed by a staggering 89%, while TikTok and Snapchat saw CPM increases of 92% and 64%, respectively. (Source: Statista, Forbes) .

  • Inflation and Its Impact: Inflation plays a significant role in media buying costs. Since 2020, online media has experienced an average inflation rate of 3.1%, while online video reached 4.8%. This means that maintaining the same campaign reach with 2019 budgets is simply not sustainable.  (Source: Statista)

  • Increased Competition: Certain events like elections can drive up ad costs due to increased demand for ad space. Digital forecasting predicts a 13% overall increase in ad buys, with even steeper rises (up to 50%) for specific categories like Connected TV (CTV) and video advertising. (source: emarketer) 

Digital Media Inflation Rate

Source: Statista

Adapting to the New Reality: Strategies for Success

To thrive in this evolving digital landscape, businesses need to embrace a more strategic approach:

Digital Out-of-Home (DOOH) advertising, which includes dynamic billboards, digital displays in public spaces, and even screens on vehicles, offers unique opportunities for targeted reach and engagement.

Audio advertising, including podcasts, radio, and music streaming platforms, has also experienced a resurgence. With the increasing popularity of voice-activated devices and the growing demand for audio content, audio advertising provides a valuable avenue for reaching consumers.

  • Prioritize High-Value Channels: Not all channels are created equal. Analyze the performance of different platforms to identify those that deliver the best return on investment (ROI). Invest your resources in the channels where your target audience is actively engaging. 

  • Create Compelling Content: Cut through the noise! High-quality, relevant, and engaging content is key. This includes visually appealing graphics, captivating copy, and personalized messaging tailored to your audience’s specific needs and interests.

  • Master Social Media: Social media platforms offer a unique opportunity to connect with your audience on a deeper level. Develop a social media strategy that fosters engagement and relationships. Regularly produce content specific to each platform and utilize features like stories, live video, and audience insights.

  • Testing New Digital Channels: While CTV, DOOH, and Audio aren’t entirely new, they’ve been gaining momentum and are poised for significant growth. Connected TV (CTV) has seen a surge in popularity this year, and this trend is expected to continue into 2025. To learn more about CTV and its potential, I recommend watching our 4-part Coffee and Conversions: CTV Unplugged Series. (link to our C&C page https://www.focus-usa.com/coffee-conversions/)

Conclusion: Adaptability is Key

The digital marketing landscape has undergone a seismic shift. Businesses need to adapt to declining CTRs, rising costs, and a more competitive environment. By prioritizing high-value channels, crafting exceptional content, and testing emerging digital channels like CTV, DOOH, and audio, you can still connect with your audience and achieve your marketing goals.  

Understanding the factors behind rising media buying costs allows you to budget more effectively and maximize the ROI of your marketing campaigns. The key to success lies in continuous adaptation, strategic planning, and a willingness to embrace the latest trends and technologies. 

To learn more about these exciting new opportunities and how to leverage them effectively, sign up for our newsletter and follow us on LinkedIn. 

Krystal Finnigan, Marketing Manager