CRO at CGTrader, a leading 3D and augmented reality content production engine. Passionate about the impact of 3D, AR and AI technologies.
Digital advertising is in crisis, with multiple forces rapidly compromising the effectiveness of standard digital methods and confusion surrounding the future. From rising CPC (cost-per-click) prices to diminishing audience engagement and the death of the tracking cookie, problems are mounting for online advertisers.
3D advertising could hold the solution, providing completely new ways to reach customers—ways that could make some older methods obsolete.
Digital Advertising: A Slow Burning Crisis
Selling online is becoming increasingly tough, especially for brands below the highest echelons of the stock market. In one nationwide study of 611 marketing professionals, 61% of respondents reported declining digital ad returns, attributing the fall to increased competition from major brands. Seventy-seven percent also reported intensified competition following the Covid-19 pandemic, and 60% cited declining consumer trust in digital ads.
At the same time, online advertising is becoming ever more expensive. Globally, Facebook ad costs rose by 47% in 2021, while in the U.S., Pinterest and Snapchat saw 163% and 130% rises, respectively. According to U.S. ad agency Tinuiti, Google’s CPC rose 36%, and YouTube costs-per-thousand views rose by 35%. At the same time, the online ad sector is becoming segmented, with priority clients being given access to higher value “dark pools” and smaller companies missing out.
These price rises are ironic, given the questions raised over the effectiveness of online advertising. For example, a widely-quoted study of Australian markets found that ads targeted at a single variable were less effective than random guessing. Other studies found that the efficacy of Facebook ads was routinely overstated by a factor of 4,000%, and eBay exaggerated ad returns by 4,100% (download required).
Other factors are in play as well. Companies are starting to realize that CPC metrics are easy to game, masking very modest increases in lift (customers who would not make a purchase without exposure to digital ads). Some companies report that 70% to 90% of all ad clicks come from fraudulent click farms, while losses from bot-based ad fraud amounted to around $23 billion in 2020.
Then there’s the pending death of the cookie. Spurred on by privacy concerns and competition from other browsers, Google Chrome will shift away from third-party trackers in 2023, leaving marketers struggling to gather relevant data, although that may not be such a bad thing. As far back as 2017, 64% of cookies were blocked by browsers, rising to 75% on mobile devices. And with cookie match rates of between 40% to 60%, they have become less and less useful in matching products to consumers.
This poor matching performance has contributed to widespread mistrust and distaste for targeted ads, which could be the coup de grace for traditional digital advertising. Ad experts Morning Consult report that 64% of users find targeted streaming ads invasive. HubSpot finds that 91% of people feel that even general targeted ads are becoming more intrusive. At the same time, web users are subjected to more ads every week. There aren’t concrete numbers, but a good guess is that the average internet user sees 4,000 to 15,000 ads every single day.
With numbers like those, it’s no surprise that people are responding with countermeasures, leading to 42.7% of worldwide web users employing some form of adblocker. But most have simply switched off, tired of invasive ads and stale techniques. We’ve reached a state in which companies can shut off huge portions of their digital ad spend without seeing noticeable reductions in conversions. Something needs to change.
What Do We Do Now: Adding A New Dimension To The Debate
Across industries, executives express dismay over the advertising landscape. As Marc Pritchard, the chief brand officer at Procter & Gamble, told The New York Times, “We tried to change the advertising ecosystem by doing more ads, and all that did was create more noise.” However, there are still ways to cut through that noise and communicate brand messages that matter, and 3D advertising is one of the most promising solutions.
3D ads are already being used creatively by some of the world’s biggest brands. Ford’s recent campaign (subscription required) to promote Maverick trucks is a great example. In an attempt to reach younger truck buyers, the auto giant created an AR TikTok campaign that allowed users to shrink 3D models of the Maverick truck and add them to their smartphone feed. Launched in June 2021, the campaign was a huge success, with TikTokers creating 17,000 videos in under a month.
Other companies have created 3D ads that allow customers to view products from every angle. For instance, Adidas Latin America used Google Swirl to create a highly effective ad for its 2019 Ultra Boost shoe.
These are more than just technical demos. They are viable marketing strategies with measurable ROI. For instance, Adidas reported engagement rates rising by four times and an average viewing time of 11 seconds when they adopted 3D viewing techniques. In fact, feedback from Snapchat AR filters or Swirl ads is generally positive across the board, with Google reporting that 3D Swirl ads can achieve engagement rates up to 8 times higher than standard ads.
Those figures are derived from direct comparisons with rich media benchmarks, so they should be fairly reliable. This goes beyond click-throughs. For example, cosmetics brand Guerlain reported a 17.2% increase in purchasing intent following a Google Swirl campaign.
Why does adding a 3D element to advertising produce results like this? The answer seems to revolve around interactivity. Standard ads are made for passive consumption. Viewers receive them and act (or refuse to act) accordingly. By contrast, 3D and AR are providing experiences instead of pushing ads. They are designed with interactive features that allow viewers to get to know products actively.
Even smaller brands can explore 3D via model creation partners. Brands can create AR lenses for Snapchat or interactive, mobile-optimized Google Swirl and Facebook ads. Instead of infuriating and alienating web users, companies can enthuse, engage and delight them. It just requires the boldness to experiment and the creativity to utilize the latest advertising techniques.