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Eat Or Be Eaten: The Internet Has Reached Saturation

A new report from Adobe Digital Insights (ADI) indicates that Internet traffic has reached saturation, with an anemic 0.1% growth rate in North America. The implications for CMOs are huge, since nearly four of every 10 websites have seen a decrease in traffic over the past three years.

“The free ride of increased traffic is over,” said Becky Tasker, managing analyst at ADI. “Traffic increases due to Internet penetration have evaporated in North America. We’ve reached saturation now. Websites face a more competitive landscape, where you’re fighting to grow by taking share away from somebody else.”

According to ADI’s “Advertising Demand Report 2016–North America,” 62% of websites increased their visits by 51% over the past three years. Among the 38% that declined, the average visit shrunk 31%.

ADI examined the key attributes of websites that have maintained traffic growth. The first finding: Websites doing well from a traffic perspective don’t rely just on branding. They also use paid channels, such as email, social media, and display advertising, to drive visits.

“We’re finding websites that are winning aren’t resting on the strength of their brands alone to drive traffic,” Tasker said. “They have a 360-degree strategy, surrounding people in various channels and platforms to drive traffic to their sites.”

Additionally, ADI also found that traffic-growing websites have evolved alongside the customer journey, leveraging personalized and in-the-moment tactics more so than did declining sites.

The channels driving the most traffic for growing sites are social, email, and display. At the same time, affiliate and partner tactics have a higher share among websites with declining traffic, suggesting that paying others for traffic might not be the best option long-term.

Another attribute among websites with growing traffic: They’re creating relevant, unintrusive content, ADI’s Tasker said.

Across industries, ad channels accounted for a varying amount of traffic, ADI’s report found. Retail showed the biggest gap between those that grew and shrank (72% to 63%), as shopping sites and product ads are optimized to attract customers. Finance, on the other hand, had the least amount of ad-driven traffic (52% in Q2 2016), while media and entertainment saw the most traffic from ad channels (74% in Q2 2016).

“It’s important for marketers to understand the dynamics of their respective industries, set expectations accordingly, and leverage multiple ad channels where appropriate,” Tasker said.

Interestingly, ADI’s report found that many consumers believe ads are improving. Thirty-eight percent said they believe advertisers have become better over the past two years at providing interesting and compelling ads, and 57% judged marketers as effective at delivering ads in which they are interested.

The study also found that while 78% of consumers like personalized ads, only 28% think they’re as tailored as they need to be. The remainder are divided between “too much” personalization, to the point of creepy,  and “too little” personalization that is no better than a generic ad.

“At the end of the day, U.S. consumers are indicating their perception of advertising is getting better, and they are even open to personalized advertisements, but they have to be done in the right way,” Tasker said. “Appropriate use of personalization and tailored ads will be imperative for a website’s success.”

ADI also found that U.S. consumers tend to see the most interesting and relevant ads when they are actively engaged with a task versus more passive activities. Thirty-seven percent of consumers indicated they see the most interesting and relevant ads while browsing online for information, followed by 31% on social media.  

“Marketers need to ensure that advertising tactics aren’t disruptive or interrupting consumers online,” Tasker said. “Instead, take into account the customer experience and online activities. Market to them appropriately so they don’t start to tune out, as we are seeing in other countries.”

 

View the full report below, or click here to see a larger version on SlideShare.

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