Dan Cohen, Regional Director at Tradedoubler, takes a look at what developments have shaped digital marketing in 2015 and what you need to be looking at in 2016.
Marketing has changed dramatically over the past five years, driven by changes in consumer behaviour and advances in technology. During this period, marketing budgets have been growing and are set to increase again in 2016, of which a large percentage will be allocated to digital advertising.
Our industry is growing and generating an abundance of data. Adding to this, the emergence of new performance metrics is making the measurement of the ROI of digital marketing spend more reliable and accountable than traditional measurements associated with print and television advertising. Unlike traditional advertising channels, it is possible to review and adapt digital campaigns in real-time and ensure budgets are optimised. This allows brands to trial creatives and take more risks in an effort to cut through the mass of advertising consumers are presented with every day, without committing to large upfront media buying outlays.
The increase in digital marketing activity has resulted in an avalanche of data — 2.5 quintillion bytes of data each day. This wealth of data provides marketing professionals with an advantage – but also an analysis challenge — when it comes to understanding their target market. Harnessing data to gain actionable insight will prove key to marketers’ success in 2016. Using insights into their customers’ online behaviours, marketers should focus on the following five areas to produce and measure results during the coming year.
- The need to demonstrate ROI
The measurement and effectiveness of traditional advertising, such as television ads, is widely understood and accepted. Digital advertising is less established and measurement metrics are still being standardised, with new performance related metrics emerging all the time.
However, TV advertising measurement metrics lack accountability and, according to Forrester Research, 87 per cent of respondents surveyed believe TV advertising has become less effective in the past two years – potentially driving even more advertisers online. The ability to account for every penny spent makes digital advertising an attractive customer acquisition channel. By understanding the digital activities that are the most and least effective, based on consumer behaviour insights, marketers can optimise digital spend, while also measuring the return on investment.
Research by ZenithOptimedia shows that by 2017 the internet will be the biggest advertising medium in 12 key markets, which together represent 28 per cent of global ad spend.
As more brands move their budgets online, the simple economics of supply and demand will come into force. Online advertising is still relatively inexpensive, especially when compared to TV, but as demand increases I expect this channel will become increasingly expensive as brands compete for consumers’ attention. If marketers are getting less for their money, there will also be increased pressure to invest in the right places. The correct metrics to measure ROI will therefore be more important to marketers than ever. Data driven insights on users’ online journeys and buying behaviour, along with monitoring the cost per engagement (CPE) of a campaign, can provide definable and actionable insights into the impact of an advertisement in a way other advertising channels can’t. The standardisation of measurement is a must for 2016, for this to happen greater transparency is required in the industry.
- Content (delivery) remains king
In 2016 marketers need to stop thinking ‘channel’ and start thinking ‘consumer’. Marketers are often guilty of placing too much focus on separate channels, whether that is social media, print or instore branding. Consumers don’t see brands this way. For a consumer, there is no distinction between channels; communication channels between a brand and its customers are entwined in a complex relationship that often demands a two way conversation, rather than the out-dated method of broadcasting branded messages.
Marketers need to adapt to this way of thinking and develop content that reflects how their customers want to interact with brands across different channels. Designing one ad with a single creative and copy then syndicating it across multiple channels simply doesn’t work. Consumer expectations have shifted. Consumers expect a seamless experience across all touch points, that includes online and offline channels.
Content will continue to reign as king. Where, how and the way in which it is consumed will continue to evolve and marketers must ensure success by delivering it in a relevant manner. As Steve Jobs once said, we need to ‘create relevance not awareness’. Marketers need to ensure that their messages are consistent across multiple channels, this doesn’t mean the same, however. Messages need to be tailored to the channel and the consumer — for example, people consume content on social media very differently than by email — but the content needs to be on brand.
- Mobile advertising will mature
More Google searches now take place on mobile devices than on computers in ten countries, including the US and Japan. Brands that are not yet taking mobile seriously need to take note. It’s surprising how many big brands still haven’t mobile optimised their websites and those that have often neglect to optimise their entire online shopping route. For example, if the shopping experience is mobile optimised, when the customer goes to their basket to checkout they are directed to a desktop payment page. This results in many lost customers simply due to poor user experience at the point of purchase. Ensuring the customer journey is viable on all major devices is a basic requirement for all brands (even small to medium sized businesses), if they want to optimise their digital marketing budget effectively.
It has been predicted that mobile will account for 50 per cent of all digital ad expenditure next year, so spending money driving traffic to a website that doesn’t work on mobile is like pouring money down the drain. Brands and marketers need to be prepared for the rise of mobile and ensure that this channel is incorporated in their digital strategies. Apps play an important role, but spending budget on and solely focusing on downloads can often be a false economy — most people only use a few apps and tend to delete most shortly after downloading them. To optimise the in-app experience, marketers need to understand their customers’ online journeys, how they interact with their brand on mobile, such as movement between the mobile web and apps in order to optimise the purchase journey. In terms of delivery, content needs to be tailored for mobile consumption with adequate budget assigned to this now mainstream channel.
- Traffic sources will widen
Wearable tech has been on the news agenda for some time and although adoption has been relatively slow, we expect that marketers will start to take these new channels more seriously during 2016. The ‘internet of things’ will continue to be a theme with tech getting smarter in general, including white goods like smart-fridges. With the pool of devices available in the digital marketing mix growing, the amount of traffic will widen. Marketers need to ensure they allocate their digital budgets to the right channels and use customer insights to optimise across devices.
A number of luxury brands have recently tested performance marketing campaigns. As a result of the success of these pioneers, an increasing number of luxury brands are beginning to recognise affiliate marketing as a legitimate sales channel. Affiliate programmes present a huge untapped opportunity for high end brands; during 2016, the uptake of performance marketing among these brands is set to gain in momentum.
- Online to offline
Not only do marketers need to think holistically when planning their activity across multiple digital channels, they need to bridge the gap between their online and offline marketing. Not simply regarding tone of voice and branding, but the user journey between online and offline. Click and collect is a prime example of how user experience doesn’t stop at the online checkout. Voucher codes and brand loyalty schemes need to be optimised to facilitate a user’s purchase journey across different devices, channels, and in-store retail experiences. According to our research, between a quarter and a third of people go online while in store to look at reviews and price comparison websites, among others, which is why it’s so important to ensure you’re reaching out to new or existing customers via all possible touch points.
From prioritising content to investing in mobile, it’s clear that there are steps that marketers need to be planning for now. In advance of 2016, it’s vital that marketers assess the rapidly changing landscape and adapt. The clear theme that will emerge in 2016 is the importance of measuring success in digital, mobile and performance marketing, as well as the need to use data to target customers in the right way at the right time to maximise impact of digital marketing activities.