Forrester: CMOs could pull up to $2.9B in display ad spending

Dive Brief:

  • Forrester released a report titled “The End of Advertising as We Know It” made available to Marketing Dive in which the central thesis is that although interruptive advertising has historically been effective, digital tools are causing the traditional ad model to fray.
  • To that end CMOs will have to untangle the “final threads” of ad interruptions and one way that will happen is a significant shift away from display advertising beginning this year with Forrester forecasting a potential decrease in display spending as high as $2.9 billion in 2018.
  • The three key reasons given in the report for this shift are: display was never as effective as the industry pretended to believe, consumers can get what they want without interruptions and solid data can unlock more insights and value across all phases of the customer lifecycle.

Dive Insight:

While display advertising has long been the foundation of digital advertising, Forrester's report echoes other industry research regarding growing concerns around the format. Magna Global recently forecast that display banner ad sales will decline by 3% this year, the first full year of negative growth on a global scale. In response to the growing negative attitude toward display ads, there is less display inventory available. 

Advertisers are less enthusiastic about display advertising than in the past because it has serious issues with viewability and fraud. The growing use of ad blocking technology also points out consumers' frustrations with interruptive ad formats, an issue that marketers are starting to take more seriously.

The Forrester report pointed out advertisers wasted $7.4 billion on poor-quality ad placement last year and only 40% of spending is viewed by an actual human. At the same time, the overall message of the report is that data-driven, customer-centric marketing, at its core, is much more strategic and proactive than simply littering the internet with disruptive display ad units.

“One of marketing’s newer roles is making the product great first. Think of the product itself as one of your primary marketing touchpoints and make it delightful. If you think the problem is not having enough money to shout the same message 20 times, think again and talk softly,” Stephanie Shore, CMO of MOO, told Forrester in the report.

The Forrester report concludes with a message that has been heard before: The way forward for marketers is less reliance on bad advertising in exchange for building relationships with customers and bringing brand personality to customer conversations. The question is whether they are ready to hear or not. 

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