Latest ‘Future of Advertising’ report shows marketers need to look more closely at the present
Mark Cameron’s analysis of the ‘Future of Advertising’ suggests marketers should be paying more attention to getting the ‘now’ right.
The world of digital marketing and advertising has gone through unprecedented change over the last decade, and the pace of that change shows no sign of slowing down. Personalised, data driven communications have now become firmly entrenched into mainstream marketing portfolios.
Mass market media still plays a vital role, but highly targeted, data-driven messaging that builds on an individual’s pre-existing biases is where the battle for dominance is to be won.
A report titled ‘The Future of Advertising’ just released by Salesforce, reveals new data provided by Facebook, Google, eMarketer and Comscore, and looks at the case for providing a data driven, tailored advertising experience.
According to the report, about $200 billion was spent on digital advertising globally in 2016. While this signals significant growth in digital, what is really striking is that click-through rates (CTR) remain very low. Facebook, for example has an average of only 1%. However, when CRM data is used to power ad spend on Facebook, CTR performance improves by 47%.
What this signals to leading digital marketers is that focusing on the conversion goal is no longer enough. To build a brand, you must create an environment that completely immerses the target customer. The marketer must now design the journey, with milestones and interactions along the way.
Businesses that offer product or service that has a long and emotive buying cycle are particularly impacted. This is why there is so much focus on ‘digital transformation’, and with market leaders like Nike completely altering the way they interact with their customers over recent years, we can expect this focus on data driven personalisation and innovation to speed up significantly.
Adding weight to this argument, the report looked at retail consumers’ online behaviours. It found that 66% of online retail time is spent on mobile (compared to 34% on desktop) but only 19 cents of every retail-specific digital advertising dollar goes to mobile. This suggests that consumer behaviours are still shifting quicker than many businesses are responding to. It also suggests the gap between the ‘data literate’ brands and the rest of the market is rapidly widening.
Having a detailed understanding of your target customer and their online behaviours, and being able to customise communications and offerings around these insights, forms the basis of creating a competitive advantage. For example, when the financial services sector in the US noticed that consumers were moving to mobile, they increased their digital advertising spend to $8.4 billion. They saw the use of mobile banking jump from 9% to 30% adoption over a five-year period ending in 2015.
This showcases how a sector successfully used data to understand their customers and adjusted their offering and associated marketing to build a more profitable customer relationship.
The overarching theme that I pulled from the Salesforce report is that tailoring messages to suit your customers’ behaviours creates cut-through and improves ROI. Within the broader context of brand building, this message flags the role digital channels should take to make a programme as effective possible. Traditional media will always have a place in passively raising awareness, but it is the digital channels that allow marketers to communicate to each and every customer in a personalised and scalable way.
What’s clear is that marketers must now take the data driven techniques that have made personalised, journey led, email marketing so effective and apply those lessons to all digital touch-points.
Understanding what your customer wants, and tailoring your messages to suit them creates high levels of engagement. But more importantly it puts your business on a maturity pathway that will enable it to make the most out data and technology, and be prepared for the huge shift that is still yet to come.
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