When we set out to write The Marketing Director’s Handbook our aim was to advance marketing management. However, the challenge has not diminished. It has increased. The digital revolution and associated media diversification adds extra complexity to managing search and social media. But in the rush to embrace digital opportunities, marketers have a choice to keep or lose their heads. In this article we therefore look at some of the key dynamics and success factors for the future of marketing. And as we are marketers, we must start with customers.
Rising digital media consumption fuels online sales
Around the world online access continues to grow. In the UK, at the time of writing, 90% homes now have broadband access (1). Some 92m have mobile phones (compared with a population of 67m), and some 78% of the population also have smartphones (2). Faster broadband speeds, and increasing availability of 4G, mean more consumers spend more time online. Both in the home, multi-tasking and on the go. As a result, UK consumers spend over 4.45 hours/day using digital devices. This figure exceeded combined tv, radio and print consumption (3). In addition, online shopping is growing; rising from 15.4% of retail sales in 2015 to 19% in 2018. And with no sign of slowing (4). UK consumers spent on average $4021 each online; this is also more per capita, than consumers in any other country in the world.(5)
Internet/online continues to grow share of advertising spend
Globally online advertising spend is neck and neck with tv, with each accounting for 33% and 34% ad sales (6). Though in the UK online is dominant with over 43% share (7). Looking at Google, their share of online ad spend dwarfs all others. Google’s 2016 ad sales in 2016 grew 18% y/y though this masks an increase in clicks of c. 40% less a reduction in cost/click of c. 13% (8) (Figure 1).
The trouble with online advertising
Most online advertising is relegated to a few key words. Google remains the elephant in the corner and Bing/Yahoo, and others, relative small fry. With Google, their algorithms decide what is seen, when, by whom and also how much is paid for a few words. Further, an advertising keyword ‘quality score’ bears no relation to the natural search term ranking, and Google and others are unable or unwilling to explain how this works.
While online advertising innovation continues apace new initiatives need careful assessment. Extended advertising text presents an opportunity say more, and while early movers report click-through rates up by 20%, the advantage may be neutralised once all use extended text. Google’s ‘dynamically generated headlines’ are another innovation though only careful reading of the small print reveals both ads and keywords are automatically generated based on the content of your landing page. What Google omit to say is that keyword settings are over-ruled, effectively removing all control from the advertiser.
Google Analytics innovations also continue apace. There are now more data than ever to analyse website and advertising performance. Though key data remains missing. Many searches are omitted as are details on the searchers (customers) due to growing numbers using ‘private’ browsers. An entire search engine marketing and optimisation industry has grown-up second guessing Google and trying to analyse the data despite the significant gaps. Yet planning and management of digital advertising remains shrouded in ‘fog’ and obfuscation appears self-serving.
The advertiser has to make sense of it all
The last couple of decades have seen a continued rise of digital agencies and separation of functions; from media buying, planning, creativity, sales promotion, and a plethora of digital specialisms. Media is often planned and bought separately. It is usually managed in silos. As a result, few see, measure and manage the ‘big picture’. Agency heaven therefore takes some finding and the buck stops with the advertiser, you, who has to make sense of it all.
New media opportunities
Looking to the future, ever faster, and more widely available, download speeds, and more powerful technology and devices, continue to fuel media consumption. Both in real-time, and though time-shifting at home, and on-the-go consumption. Online search/social media advertising, though mainly display, grew 20% in 2016 (Figure 1) (7). We estimate slower future growth (9). Video also offers more opportunities than plain words to build brands, and a growing range of media offer video advertising. You Tube raised over $5bn from video advertising in 2016 (c. 7% Google total), Facebook/Instagram projects $4bn video advertising revenue in 2017 and Snapchat nearly $1m. We estimate that video advertising will account for over 10% online advertising spend moving forward.
While traditional media has been dented by the growth in online display and video advertising, opportunities abound to buy wisely in both traditional and new online media markets. But there is also a need to see and think clearly to avoid traps set for the unwary. Thus the savvy marketer will not go far wrong by developing and running creative campaigns via ‘reasonably high’ impact media offering ‘good value’ cost per thousand (CPT) impacts.
Marketing Inspiration
1. Customers are increasingly busy and time-poor. They wish to make best use of precious moments. Digital devices offer speed and convenience to live life on the go. Also access to extra value in the online world. So build these insights into your product and marketing strategies.
2. Building enduring brands seldom happens by accident. Rigour and creativity are both required. We recommend a 5-step marketing management approach (Figure 2). Starting with analysis, then creativity to find an idea and message that engages rationally and emotionally. Prefer pictures, videos and multi-media experiences to words alone.
3. To select media to get your message across, understand your customer and customer journey, media landscape, and engagement drivers and barriers. Then use the objective and task method to plan your campaign, and assess which media offer best value. Also look beyond digital media and marketing hype, and remember the story about the emperor’s new clothes. What’s new or big is not necessarily the best media option.
4. Don’t just rely on return on marketing investment (ROMI) to measure and manage performance. This risks short-term at the expense of the long-term gain. Thus, also use a broad range of marketing management metrics; measure customer engagement including brand awareness, interest, usage, preference and loyalty. Then test, measure and learn, and test, measure and learn.
What do you think? Let us know.
References
(1) Office of National Statistics (mid 2018)
(2) OFCOM (mid 2018)
(3) eMarketer.com
(4) Retail Research.org
(5) The ecommerce foundation (2018)
(6) PwC Global Entertainment and Media Outlook 2016-2020
(7) AA/Warc Expenditure Report, April 2016
(8) Latest company reports and accounts, eMarketer.com (Jan 2017)
(9) TMD estimates based on published sources
