Digital marketing presents a tremendous opportunity to engage consumers, but precious few companies have realized its full potential. Companies are trying. In the US, spending on digital advertising in 2019 is on track to well surpass spending on television advertising. Globally, certain markets devote more than 45% of their media advertising budget to digital marketing, according to media company Magna.
But supersizing the digital-marketing budget is not enough. Successful companies are also transforming their ways of working. Classic marketing techniques—including broad segmentation, lockstep campaigns with multiple handovers, and marketing funnels through which all consumers move in tandem—have no place in digital marketing. If your company is still relying mainly on ways of working that served you well ten years ago, it is time to accelerate change.
What is working in digital marketing today? Trend setting agencies are capitalizing on three forces that have fundamentally changed the way marketing can be done:
- Access to huge amounts of real-time data to drive their campaigns
- Ability to engage in long-term, multi-channel relations with consumers (as opposed to one-way, shotgun interactions)
- Flexibility in using multiple concepts and collect real-time feedback from customers
WHY CHANGE NOW? The ways in which consumers engage with media have shifted dramatically in recent years—and marketing approaches must be reinvented accordingly. It helps to understand the new environment.
Consumer behavior is changing fast.
Consumers are more digitally savvy and increasingly impatient with traditional marketing techniques and intrusive or irrelevant content and messages. When selecting new products and services, consumers rely more than ever on advocacy from people they know and trust. Personal recommendations are now five times more trusted than brand marketing, according to the Word of Mouth Marketing Association. Frankly, companies need to look at revolutionizing their brand and trust with methods that are fresh and unlike the competition-a task not easily accomplished without commitment.
Advertisers are following consumers online. Globally, since 2011, spending on mobile online video has doubled year on year and spending on social media advertising has grown 40% to 60% per year, according to Magna. We are rapidly reaching the point when companies will spend more on social, search, online video, and display advertising than they will on traditional platforms.
In addition, visionaries have brought new advertising technologies into the marketplace, allowing for much more personalized and targeted advertising. Video insertion, for example is speedily replacing flat display ads. Specific ads can now be targeted at a specific audience or consumer type. Data and analytics encourage test-and-learn experimentation and ad purchasing through automated platforms and auctions. All told, personalized advertising could constitute 80% of digital marketing budgets within three to five years (and will increasingly penetrate traditional media as well).
THREE FORCES TRANSFORMING DIGITAL MARKETING
Three big shifts are transforming marketing and will generate tremendous competitive advantage for those that can ride the wave.
- Marketing can now take advantage of abundant, real-time data. For years, marketers relied on proxy information based on last month’s sell-in or targeted research in assessing the state of the marketing funnel. Companies can now analyze abundant consumer data—media data, customer relationship management (CRM) data, app usage data, and more—the problem lies in how to understand where individual consumers are in their journey, what they’re looking at, when they’re looking, where they’re located, and how they’re responding to specific advertising messages.
- Marketing is moving away from one-off transactions and toward ongoing engagements with consumers to push business value. Marketers have always sought to drive allegiance and love for the brand, but until now they have been able to do so only through one-way connections that reduced contact with the consumer. Digital channels allow two-way associations that can drive loyalty and support over a consumer’s lifetime and across touch points and channels.
- Marketing is accessing the flexibility and speed of digital. For decades, marketing has been arranged around the slow world of TV and print ads, which involves lengthy creative processes, months of fine-tuning and doubt regarding market feedback. Modern marketing gets the most from the inherent flexibility of digital to reduce time and expense and increase efficacy. Firms can now use tactics like A/B testing to deploy multiple concepts quickly, in parallel, and with immediate feedback. In this way, excellent digital marketing allows companies to achieve mass reach and personalization, with the added benefit of always-on optimization (rather than burst campaigns that can be analyzed only after the fact).
To fully benefit from these advantages, most companies will require a fundamental reboot in their strategy, organization, and ways of working.
TRADITIONAL MARKETING HAS BEEN TURNED UPSIDE DOWN
Digital marketing is not just add-on to traditional marketing. It’s a completely new way of operating. We have identified fundamental changes companies need to make in order to capitalize on all that digital marketing has to offer. The mission statement of TriMark Digital Group is all about helping companies make that transition.deo
Digital Will Bring Radical Changes to Traditional Marketing
ARE YOU READY?
While many companies are making some of the necessary changes, very few have embarked on the large-scale transformation needed to fully capitalize on digital marketing. An organization that truly embraces the potential of digital consumer interactions and can meet all of the requirements will look very different from the traditional organization. With so many moving parts, companies need to candidly assess their readiness.
There are new and innovative ways in which digital marketing can turn conventional marketing upside down. So, armed with this knowledge, your leadership teams can create a revolutionary roadmap that fits where your company’s unique is today, its current business needs, and new operating model. By transforming marketing today, companies will reap the rewards for years to come.