The rise of Digital Marketing

Google analytics

Yes, people gradually spend less time on legacy media (TVs, radio, newspaper) and more time on the Web, apps and messaging. Considering that the advertising budget spending follow the audience, it is natural that marketing budgets organically shift to digital media. However, the tremendous rise of digital marketing spending of the last decade is not comparable to the shift in audience.

Study

Why brands are spending so much on digital medias? And why this rise will continue at a greater scale for the coming decades?

Indeed digital marketing natively brings unique benefits which solve issues which cannot be addressed with legacy marketing.

Traditionally, brands had to rely on intermediaries (media companies, retailers…) to reach their audience, paying a high price to do so. While brands consider it is critical to spend money on marketing, the direct return on investment is difficult to calculate or to forecast.

Brands are dis-intermediated, focus on the creative part of the marketing campaign and use non educated guesses regarding the results.

“Digital marketing has disrupted

the marketing legacy usage”

Digital marketing has disrupted the marketing legacy usage with total new execution and pricing. Digital marketing, when elegantly executed, allows a direct connection between a brand and his customers with a cost model based on the result.

Direct marketing allows brands to know his customers (get feedback, inform, predict demand, mobilize) and interact wisely with them (target, performance oriented, friction free loyalty).

Digital can also put brands at risk as they decide to trust intermediaries to market and sell their products and services (Toys“R”Us with Amazon). It is important for brands to use the digital platform to reach their audience but to keep the direct connection with their customers.

In contrast to traditional marketing, digital marketing allows a better targeting of the audience depending on the goals. Campaigns can be easily defined to match a pre-defined budget (newsletters, website, digital ad on Google or social networks…). For instance, (Google) AdWords gives visibility on the first page of specific researched terms to the highest bidder. The choice of words and allocated budget depends on the brand strategy. Want to get more notoriety? Prefer general/common words. Want to drive sales and get more prospect contacts? Choose specific words. More competitive is the word more money will be spent to have the best place.

Google Adwords

In other words, budgets and ROI can be tracked with various metrics: cost per click (CPC), cost per thousand (CPT, the closer to the traditional advertising), cost per lead, audience rate… Digital marketing budget can be adjusted depending on achievements and marketing goals.

Brands with physical stores (vs pure digital shops) have a unique advantage where they can leverage the physical connection with the customer to build a unique digital direct connection. This knowledge can be leveraged by the brand at a global scale but also locally at the store level.

Damien