Question

You have been asked to give a presentation to your co-workers in the digital marketing department of Reebok on what factors should be considered in assessing the effectiveness of your firm’s search and display ads more accurately. Using the two key questions below, discuss how you would guide them:

a) How are online clicks to display ads/search as and sales related? What should they expect?

b) Reebok is placing ads such as offline along with online ads. How can they attribute the effectiveness of online ads for the sales (omnichannel shopping) they receive? What are the short and long-term dynamics?

Answer 1

HOW DO INTERNET ADS WORK?
Most successful site owners and online publishers understand — in a general sense — how internet ads work. However, the advertising technology (adtech) space is extremely complex and can be difficult to understand. The intention of this is to break down exactly how web-based adverting works and to uncover the things that site owners and publishers can actually do to make more money without sacrificing their sites integrity.

Ads basically work like this: there are advertisers and there are publishers. Advertisers want to reach their desired audience as efficiently and as cleverly as possible. There are millions of advertisers.

HOW DOES INTERNET ADVERTISING WORK TODAY?
As we all probably know, the internet advertising business has a very large gap between publishers and advertisers. This gap exists because both advertisers and publishers want to be sure to extract the maximum amount of value from their relationship.
Online advertisers want to display internet ads as effectively — and as cost-effective as possible — publishers want to sell their inventory (space) for the highest online advertising rates they can without annoying their users and disturbing those users’ experiences.
This is where adtech comes into the fold. It is that gap.

Short and long term dynamics

To create a long-term advertising strategy in a short-term world, it is important to understand what the purpose and goals of each strategy can yield.

Most of the modern digital channels for advertising focus on short-term goals and are based on quick and instant results. Paid search advertising and social media marketing are excellent channels for integrating short term goals that are in line with a companies long-term advertising strategy, however advertisers should not depend on them as a long term strategy.

In the short-run, increased site visits, conversions and sales can be gained relatively quickly with a powerful short-term advertising strategy; it is a simple function of budget and creative collateral. Leveraging search engine advertisements, social media ad managers and programmatic advertising tools can help a company increase exposure to a hyper-segmented audience.

The problem with short-term advertising strategies is that they are often too costly for small and medium sized businesses that cannot splurge on high click rates, and their short term effects often do not justify the expense. Despite that, many businesses push short-term advertising strategies as they seek the instant gratification their consumers crave and as a result, focus their limited time, energy and resources on the wrong channels for their long term goals.

While it’s easy to lose sight of the long-term plan in favor of quick results, the truth is that long-term advertising strategies are more effective than the quick-fix short-term campaigns that bring immediate results. While short-term sales are great for the quarterly balance sheet, long-term advertisement strategies have the potential to cultivate brand awareness and loyalty and increase existing customer conversions.

At its core, long-term advertising is based on branding and brand loyalty whereas short-term advertising is focused on immediate results. A successful long-term strategy will be built around establishing brand awareness and loyalty so that consumers will identify themselves with a particular brand.

Ultimately, the more a consumer connects to the core of a brand, the more they will spend, however advertisers should be aware that building a long-term advertising strategy requires time, dedication and resources.