Why declining digital ads costs should pivot your marketing focus towards paid media

By Fraser Gillies Published: 20 October, 2020 Last updated: February 17th, 2022 at 1:39 pm

ice cream advertisment

2020, for want of a better word, has been chaotic. 

The economic impact of the coronavirus, namely – record rates of unemployment, consumer spending freezes and stock market crashes – has caused businesses to tighten purse strings. 

Digital ad departments have seen the brunt of this. 

In fact, 89% of digital advertisers say spending on ads has been significantly disrupted by business losses due to the pandemic. Travel companies have already slashed ads spending by half. Likewise, retail and consumer tech companies are pulling back on further digital ads campaign investment in a bid to survive a period of global downturn. 

Amidst all of this disruption, however, is a lucrative business opportunity. 

With less established business buying ads space, the cost of running ads is in decline. So, if you’re a smaller business and brave enough to stump up some cash in these trying times, there are untapped gains to be had in paid media.

Digital ad space is a buyer’s market

81% of advertisers expect to cut their advertising budgets significantly this year. This is a harsh reality for the likes of Google, Facebook, and LinkedIn, all prominent digital ad space vendors. Their loss is to the benefit of small businesses. 

At the moment, there’s a demand deficiency for ads spaces across search engines and social media platforms. And from Economics 101, we know that market forces will cause the cost of buying digital ads slots to decrease.

In this respect, the wheels are already in motion. CPC ads saw their literal cost for each click decline by over 20% in the second quarter of 2020. Over the same period, the number of clicks grew by a staggering 38%, a five-year high. Likewise, Facebook and Twitter saw their ad prices plummet in the first half of this year as their biggest customers from travel, entertainment and retail all self-imposed advertising spending freezes.

All of this has culminated to put the power of the digital ads market in the hands of the buyer. 

Who are the winners from declining ad space costs?

From an industry perspective, businesses that offer work-from-home solutions in some shape have a great chance to take advantage here. 

Earlier this year, CNBC reported that edtech companies had begun seizing their moment in terms of paid advertising, investing aggressively in a variety of social media and Google ad spaces. The boom in e-learning platforms like Skillshare and MasterClass’ popularity has coincided with people’s new found time indoors. 

E-commerce platforms, meanwhile, have seen massive boosts in website traffic as social distancing measures have forced consumers to swap indoor shopping for the virtual experience. That means B2C service and products can gain fantastic exposure on the likes of Amazon and Alibaba.

Finally, if you’re a new business looking to take on industry-established rivals, a speculative purchase of the right digital ads place could help you target your ideal customers more efficiently. 

What is the ceiling for potential paid media gains?

Digital advertising is one of the central pillars to any marketing strategy. 

Lifestyle and home furnishings retailer Williams-Sonoma drove its e-commerce sales up by over 50% YOY with engaging and conversion-friendly mobile ads. Footwear outletter Boxfresh leveraged brand-focused video ad campaigns to yield a CTR (click-through rate) 233% higher than Google benchmarks.

The ceiling, in a nutshell, is what you want and need it to be.

If you want to build your brand exposure in front of your target audience, the right digital ads campaign filters valuable referral traffic into your website that’s likely to convert. Likewise, if you’re looking to beef up your marketing qualified leads with warmer prospects in your pipeline, digital ads can guide the right users towards gated content that suits their needs. 

Finding good fit, ready to buy prospects for sales is the most popular use of digital ad campaigns. A digital ads strategy that carefully considers business goals and CRO (conversion rate optimization) best practices allows businesses to effectively aim advertorials at the right users. 

Get in early with ads

It’s this simple: The first-movers on the declining digital ads costs will reap the rewards.

If you’re a new market entrant or a startup struggling to make your mark on your industry, this newfound benefit to your marketing costs is the perfect tonic. 

Digital ads are typically spaces of high competition, especially when it comes to transactional keywords with a high search volume. With a bit of research, you’ll begin to find that some of your most sought after keywords now look a lot more attainable than before, contributing to significant gains to your ability to acquire new business.

Don’t dither. Pivot your digital communication focus towards paid media and find new growth opportunities through one of marketing’s most crucial pillars.


Fraser Gillies

Fraser has been working in the digital communications space for four years. Currently the Head of Revenue at Publicize, he is leading a team of talented content creators to build powerful tech narratives that engage, educate and entertain audiences.