Acquiring customers is a key factor in every business, and customer engagement plays a huge role in attracting new customers and maintaining good relationships with existing customers. With the advent of the internet, customer engagement has been redefined, with customers being able to interact with brands directly.

On October 20, 1994, the first interactive advertisement, a digital banner, was published. The ad by AT&T on HotWired, the former online offshoot of Wired magazine, made a graphic that stated, “Have you ever clicked your mouse HERE? You Will”. It worked, as about 44% of the people who saw it clicked on it and ended up on a landing page with more information about AT&T. HotWired decided to sell space on their website for ads, similar to their physical magazine. We’ve come a long way from there, and now interactive advertising has become a key method brands use to engage with their customers and is a great way to bring attention to your brand.

What is Interactive Advertising?

To understand interactive advertising, let’s first define traditional advertising. Traditional advertising is a one-way communication where the brand relays information and the audience cannot directly respond to the brand. On the other hand, interactive advertising enables two-way communication, where the audience can interact with the ad, and the brand receives their responses. Traditional advertising has a linear flow, presenting ads in a predetermined order. With interactive advertisements, the audience has more control over how they view the advertisements. Interactive advertising uses the power of the internet to enable brands to understand their customer base better and for customers to receive more relevant ads.

Why is Interactive Advertising All the Rage?

The internet has allowed people to access a world of personalised experiences where they can access what is important to them. Interactive advertising uses customer information to send relevant ads to the customer, a personalised experience that tries to connect the right information to the right user. Interactive advertisements also maximise user engagement, as they require the user to respond to the ad, making it a more active experience. The user response is also feedback for the brand to understand its customer base better. A Salesforce Research survey reported that 73% of customers expected companies to anticipate their needs. A post-pandemic world still relies heavily on the internet, and companies need to learn to harness its advantages to remain competitive.

Interactive marketing includes dynamic content that allows the customer to engage with it. Personalized content that is customised to meet customer preferences and conversational marketing that uses AI to create chatbots that help them understand customer requirements.

Possibilities in Interactive Advertising

The oldest form of interactive advertising is emailing customers with polls, games, quizzes, newsletters, or informing them about new products and offers with clickable links that direct the user to the product. This method is best used to inform customers or gain customer insight. Sending too many emails can come across as spam, so use it wisely.

Interactive Social Media posts are posts that redirect users to specific pages. Social media platforms like Facebook, YouTube, X and Instagram have a large user base, and companies need to have a good social media presence in order to stay relevant. Instagram has allowed brands to add links to their posts and incorporate interactive advertisements into the user’s feed. Brands are able to track these clicks and also receive feedback through likes, comments, and shares. Social media posts shouldn’t be one-way communication, and the brand should interact with the customers by reading their responses.

Augmented reality allows users to reimagine their surroundings using their handheld devices. Fashion and furniture brands use AR technology to allow customers to view how the product will look in real life. For example, IKEA launched IKEA Place, an app that uses AR technology to allow the user to see how their furniture will look in their rooms. This is a great method, not just if you have a product to sell but to promote something using filters on Snapchat and Instagram. To promote SpaceX’s second mission in the commercial crew program, they created an Instagram filter that allows the user to try on a virtual space suit.

Playable Ads allow the user to experience a game or a brand experience through their devices. It offers a sneak peek into what the product or brand can offer. This is mainly used by game developers, as it allows users to try out the game before making any commitments. Any ad that allows you to choose options or play a game for a limited time is a playable ad. These ads need an HTML code that can also be easily loaded on the user’s device. It can cost a lot more to develop than other methods, but if used correctly, it can be one of the most engaging for the customer.

Interactive videos have a higher conversion rate than regular videos, as they keep the viewer engaged and prevent users from skipping the ad. Interactive videos work mainly on YouTube. They can be links to other videos that use the style of Choose Your Own Adventure or 360-degree video, where the user is able to move around in the video. Tipp-Ex, a European leader in corrective products, created an interactive campaign where the user could choose the ending from about 50 alternatives. Oreo created a 360-degree video about an Oreo fantasy land where the viewer can control the angle of view. Interactive videos give more agency to the customer but can also take a lot of time and effort to create and pull off correctly.

Display ads are one of the most common forms of interactive advertising and can be seen all over the internet. However, people have been so overloaded with banner ads that they’ve subconsciously developed banner blindness. It’s a form of selective attention where the user is able to concentrate on only what their objective is and cancel out other stimuli like the ads on the screen. Brands have countered banner blindness by creating eye-catching graphics and emphasising placing them in the right location on the screen. So, these are still very cost-effective ways of advertising.

Does Interactive Advertising Really Work?

According to Ion’s Interactive Survey, 88% of marketers agreed that interactive content effectively differentiated their brand from competitors, and 70% of marketers say that interactive content is effective in converting site visitors.

Interactive advertising allows for better customer insight than traditional advertising as it gives brands access to data, such as whether they shared the content, clicked the content, how long they viewed it, and other such information.

According to a McKinsey & Company report, companies that excel at using personalised advertising have witnessed 40% more revenue. Additionally, 80% of brands interviewed by Segment noted that consumers spend more when their experience is personalised.

Of course, it does not mean making an ad interactive will guarantee success. Like traditional advertising, brands still need to be creative and have a good understanding of their audience in order to take full advantage of interactive ads.

Things to Keep in Mind

Just creating an interactive ad is not enough; there are things you need to keep in mind while creating a campaign.

Each platform has a separate format, and your ad should be designed with that in mind. Find the best way to use that platform and catch the eye of the users.

Since you have access to customer insights, you need to analyse them, refine your approach, and target the correct audience.

Interactive advertising allows for two-way communication; hence, it’s important to release more content regularly in order to maintain that communication with the audience.

In order to derive the right insights, you need the right tools, and these tools can sometimes be quite expensive. Getting the right information can be difficult.

If done incorrectly, personalized ads can seem intrusive and invasive of consumer information. Security and privacy have now come under greater scrutiny as users are more careful about how much information they give out. A cookie–less strategy to gain insight and target the right audience needs to be in place.

Companies have always found a way to incorporate technology into their advertising, from print to video to the Internet; as new technologies arise, new forms of advertising will come up. Companies have already started trying to create more immersive advertisements by using virtual reality technology. VR advertising requires the use of a VR headset that allows users to engage with a product, service, or experience in a virtual environment. Companies have also realized that customer engagement can be higher by changing the channel of distribution by hiring social media influencers to advertise their products instead of communicating directly. Influencer marketing has been growing steadily, and more and more companies are opting to put aside more of their marketing budget for it.