How to Improve Digital Advertising ROI for Your Clients

improvedigitaladvertisingROI

Digital ad spending can be overwhelming for your clients. They want to know how to optimize their media mix and how their activity compares to their competitors. You can come across as an expert by checking out the key data points in eMarketer’s U.S. Digital Ad Spending by Industry report and by running a Digital Audit to share with your clients and prospects. Here are the critical details you need to improve digital advertising ROI for your clients.

Improve Digital Advertising ROI

The ad market has experienced a strong recovery from the bashing it took in early 2020. And digital ad market did particularly well last year, amounting to roughly $191.09 billion. The market is expected to top out at $239.89 billion this year. Here’s a peek at the details.

The strongest 2022 growth verticals for digital advertising increases compared to 2021 levels are retail (20.2%), CPG (17.9%) and the entertainment sector (16.5%). These industries will all be spending at a higher level than the 15.6% average increase projected for digital ad spending growth this year.

The entertainment sector is particularly noteworthy. After struggling with significant contraction because of the COVID-​19 epidemic, entertainment venues increased their digital ad spend by 37.2% last year. And with loosening of many local and state restrictions, these businesses are eager to remind consumers that they’re open for business. In addition, the digital spending of the retail sector is worth a mention because it's the largest group tracked by eMarketer and totaled over $47 billion in 2021. Overall, retailers account for close to 25% of all digital ad spending. If your clients operate in these verticals, they should consider shifting more of their ad spending to digital formats to stand out from their competitors.

Mobile Ads

With digital ad buying amounting to $191 billion in 2021, mobile captured 68% of that total. Businesses in the consumer electronics sector (75%) and telecommunications (75.1%) allocate more of their digital ad budgets to mobile than any other verticals. And while that’s an impressive statistic, they aren’t the biggest spenders on digital. That prize goes to retailers; those businesses account for nearly 24% of mobile ad spending.

The industries spending the lowest percentage of their budgets on mobile digital advertising include healthcare and pharma (57.1%) and travel (58.0%). Analysts predict that as apps continue to dominate in the mobile sphere, industries like travel and financial services will allocate more of their digital budgets to the mobile format.

CTV Draws More Ad Dollars

In 2021, marketers spent $13.41 billion on CTV advertising. And because so many families enjoy watching CTV together, ad spending growth going forward will outpace the increases that the mobile format has recently enjoyed. In 2022, the projected 15.5% increase will bring the spending level to about $15.5 billion.

Display and Search Spending

CTV spending is included in the overall video ad spending sector, which totaled $55 billion. That is over half of the display ad spending figure of $108.52 billion. Industries that spend more than the average percentage of their budgets on display ad spending include entertainment (57.5%) and travel (56.5%). Analysts believe some industries will be more likely to increase display spending in 2022 and move away from search as they attempt to reach consumers through CTV. These industries, with over 60% of the digital ad budgets going to display, include automotive, consumer electronics, entertainment and telecommunications. How much are your clients allocating for CTV advertising?

Paid search spending amounts to a significant chunk of digital advertising, with a 2021 total of  $76.52 billion. Health care and pharma and travel are the only industries to spend over 50% of their digital budgets on search. But their spending levels are dwarfed by the gigantic search budgets of retailers, $20.72 billion, and CPG companies, $12.42 billion.

In analyzing the slowing growth rate of search budgets and the increased spending on display, analysts say, “a certain budget-​split status quo is slowly emerging for digital formats.” Your client need to consider how they want to split up spending between search, display and formats such as email. They should base some of that decision on media formats used by their target audiences. To improve their digital advertising ROI, your clients need to show up in search results. They need a mobile presence as well as investments in video ad spending. Give them a snapshot of how they compare to other businesses in their sector by running a Digital Audit on AdMall by SalesFuel.

Photo by Mikael Blomkvist from Pexels

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.