ADI -- State Of Digital Advertising 2018

STATE OF DIGITAL ADVERTISING: SUMMIT 2018
Methodology
Most comprehensive and accurate report of its kind in industry
Based on analysis of aggregated and anonymous data via:
Adobe Experience Cloud Adobe Analytics Cloud Adobe Ad Cloud Adobe Campaign
• Report based on analysis of over 183 billion visits to U.S. websites
• Online video data based on 12 billion plays of TVE and 9 billion ad impressions
• E-mail analysis based on 150 billion e-mails sent via Adobe Campaign in 2017
• ADI Summit Survey 2018: we surveyed 1,000 consumers and 250 digital marketers in the
U.S. between February and March 2018 about their views on digital advertising

1. Relevance is personal: what people think of advertising depends on demographics, device, and more
2. Millennials see social media ads as the channel where ads are getting more relevant
3. TV is still viewed as the device & channel with the most relevant ads, but not seen as getting better
4. Smartphones are the device where ads are getting more relevant
5. Searchers have shifted to mobile and marketers follow
6. Video shows us that one size does not fit all
7. E-mail reminds us that timely messages are relevant messages
8. Marketers can do better
Consumers demand relevance
Key findings

Source: Adobe Digital Advertising Survey, 2018
Relevance is personal, even in advertising
Social media is the most relevant
channel for Millennials & Gen Z
• Half of Generation Z (50%) and 42% of
Millennials identify social media as the
most relevant channel, while
Generation Xers, Baby Boomers and
older overwhelmingly prefer TV
Across age groups, men see TV as more
relevant than women do (52% to 43%)
• Women prefer social media as the
most relevant channel compared to
men (35% to 22%)

Ads are getting better, but not for everyone or everywhere
Personalized content is improving ad
relevance
• People who find social media most
relevant also feel that ad quality has
improved,
• Those that think TV is the best source
for relevant content are more likely to
feel that ad quality has declined
Millennials are most likely to see ads
increasing relevance
• Generation that grew up with social
media is most likely to see ads getting
more relevant

The line between digital and TV continues to blur
Digital video viewing continues to grow at a
steady pace
• TVE views and users has doubled over the
past two years (up 114% and up 97%) over
the past two years
TV Everywhere increases its primetime share
year-over-year and its only going to increase
• On-demand TV viewers are shifting more
into key evening hours (5PM-11PM) year-
over-year
• Nearly two-thirds (60%) of Gen Z consider
“watching TV” as using a streaming service
(such as Netflix, Hulu, Amazon Prime)
Source: Adobe Primetime, Adobe Digital Insights Digital Marketing Survey, 2018

TV emerges as a digital device
TV is increasingly the living room
internet portal
• Just as more video is watched on
mobile and desktop devices, TV
Connected Devices are the source of
more and more website visits
• This further blurs the line between TV
and digital device
Source: Adobe Primetime

Mobile is the dynamic screen in consumers’ lives
Smartphone continues its rapid rise as
the go-to device for consumers
• By January 2018, smartphone visits are
up 21% in the U.S. across all verticals,
compared to January 2016
• Desktop and tablet visits (down 21%
and 31%, respectively, since January
2016) are shrinking
Mobile is also where ads are getting
more relevant
• Owning a smartphone doubles the
chances someone thinks ads are
getting more relevant
Source: Adobe Primetime, Adobe Digital Advertising Survey 2018

Source
Adobe Analytics
State of Digital Advertising: Summit 2018
Mastering mobile can drive retail growth
Mastering the smartphone experience is
a key to driving growth
• Growing retailers had 48% more visits
from smartphones in January 2018
compared to January 2016, while
shrinking retailers smartphone visits
are nearly flat for the last two years (up
5% in January 2018 relative to January
2016)

Good content struggles to cut through the clutter
Even relevant content has a hard time
breaking through to consumers’
attention
• More than half of people think online
ads are easy to ignore regardless of age
or gender
Ad blockers do not improve perceived
ad relevance
• People who used ad blockers do not
have significantly different perception
of ad relevance

Clickers give insight on relevant ads
Half of clickers did it by mistake
• As many survey respondents said they
had only ever unintentionally clicked
on ads as said they had ever
intentionally clicked
• So clicks don’t mean any one ad is
relevant to an audience
But clickers see ads as getting more
relevant
• Either improving ad relevance is
getting people to click, or people who
click are seeing more relevant ads

Source
Adobe Media Optimizer
Search: getting clickers requires focusing on the audience
• Audiences have shifted search to
mobile and marketers have
responded: average monthly spend
from digital marketers is up by 4.6%
year-over-year in 2017, but average
spend on mobile is up 22.9%

Source
Adobe Ad Cloud
Video: one size never fits all
Regional variation is strong across states
when it comes to viewable completion
rates
• Different states stick with video ads for
different periods of time
• This leaves huge opportunities to
optimize creative across regions
• Similar patterns exist around
demographics, psychographics and
behavioral segments
• Advertisers lose a lot of audience
attention when applying a one-size-fits
all creative to all of the USHighest viewable completion rates (Feb 2018)
Lowest viewable completion rates (Feb 2018)

Source
Adobe Ad Cloud
Video: mobile is the dynamic screen
Mobile keeps a consistent completion
rate even with increasing share
• TV connected devices fell in terms of
completion rates year-over-year (95%
to 90%) while their share of video ad
impressions increased from 3% to 7%
• Desktop video had a 20% drop in
share of video impressions between
2017 and 2018 (81% to 61%) split
mostly towards mobile video (added
16%) but also TVCD (4%)
• Mobile video has maintained a 66%
completion rate despite a doubling in
completion rates year-over-year

Source
Adobe Analytics
Social is the channel of the future for new customers
Social media drives 3x more traffic for
non-customers than customers
• Non-customers are 3 times more likely
to visit retailers from social media than
customers (up from 2.5x in 2016Q4)
• Younger generations preference for
social media as a relevant channel
means this number is going to
continue to increase

Source
Adobe Analytics
With search, e-mail remains key channel to customers
Direct and search remains the primary
source of visitors in retail for customers
(52%) and non-customers (69%) alike
• E-mail drives a fifth of visits from
customers (20%) and nearly a tenth
from non-customers (9%)
• The importance of other marketing
channels is increasing; the share of
visits coming from customers is up to
29% in retail (from 23% in 2016Q4)

Source
Adobe Campaign
E-mail: relevancy depends on audience and time
Reaching customers by e-mail varies by industry and time of year
• For Financial Services, e-mail open rates fell after a spike in e-mail sends at the end of 2017
• In retail, open rates stayed consistent even as e-mail sends peak during the holiday season

European retailers not sure Thanksgiving retail is relevant
• Marketers between regions can
benefit from taking the pulse of
their customers. In Europe,
marketers refrain from the
Thanksgiving and holiday retail
push over e-mail
Methodology: Total e-mails sent indexed (March 2017 = 100)
Source: Adobe Campaign

Is Push the Future?
Push sees little push-back
• As mobile becomes the preferred
screen, marketers are making big
pushes into push. Push notification
sends are up over 300% over the last
9 months
• While e-mail and SMS follow a typical
pattern, we’re seeing a major shift into
push notifications
• The jury is out on the push: when will
marketers know its too much?
Source
Adobe Campaign

Marketers think they are more relevant than they are
More than 70% of advertisers see their
ads as relevant to the audience they are
targeting
• Yet only 8% of people think the ads
they see online are always relevant
• And only 27% of people think the ads
they see online are at least often
relevant
• Most marketers must be less relevant
than they think they are

Marketers can be more relevant
Connect medium and message
• Audiences tune out of ads that
don’t feel relevant
• Targeting allows marketers to
reach specific audiences with
specific interests and needs
• Creative and media strategy
have to be tightly integrated to
get the right message to the
right audience

ADI -- State Of Digital Advertising 2018

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ADI -- State Of Digital Advertising 2018