Where should brands focus their marketing efforts?
The digital revolution has seen marketing budgets shift from standard advertising to multi-platform branded-content strategies in huge numbers. But is advertising spend as a whole on the rise – and in which areas will brands be focusing their marketing efforts going forward?
Advertising will be a recurring theme at the 7th Digital Innovators’ Summit in Berlin on 24-25 March.
Overall marketing spend rose sharply last year. In fact, according to the latest IPA Bellwether Report, global marketing spend is currently at its highest level since the report began 13 years ago. Although the European market declined slightly in the first three quarters of 2013, stifled by the region’s continued economic woes, overall global advertising and marketing spend lifted 3.2 per cent during the same period. Asia-Pacific saw the most significant rise, at seven per cent.
And this overall upward trend in marketing spend looks likely to continue, with the Econsultancy Marketing Budgets 2014 report stating that 60 per cent of its respondents are intending to increase their marketing spend this year.
The shift to digital over recent years is undisputed. According to FIPP’s World Magazine Trends 2013/14 report, “internet advertising will increase its share of the ad market from 18.4 per cent in 2012 to 24.6 per cent in 2015; and internet advertising will have overtaken newspapers for the first time in 2013 – exceeding the combined total of newspaper and magazine advertising in 2015.”
Meanwhile, Nielsen’s quarterly Global Adview Pulse report shows internet advertising surged 32 per cent worldwide in the first three quarters of 2013, compared with the same period in 2012. Sectors trending negatively were newspapers and magazines, which dipped 2.2 per cent and 1.1 per cent respectively.
Multi-platform still king
Helen Brocklebank, creative solutions director for Hearst Magazines’ luxury titles, says growth across the digital space is being driven by brands’ continued drive to multi-channel strategies encompassing many platforms.
“For me, the big players all realise now that multi-platform is the way forward, and very few of the campaigns I’ve created over the past 18 months have been single-channel campaigns.
“The lucrative, high-value consumer is more elusive than ever,” she adds. “You just don’t know where you are going to come across them, so you need to be ready to meet them whenever you encounter them and through whichever channel possible – which means multi-channel and multi-platform is, and will continue to be, the most effective approach.”
Brocklebank also believes branded content and native advertising will continue to receive the greatest attention in 2014.
“Native advertising and co-created content are really hot right now and for our clients it’s about demonstrating that we can integrate and align brand and media messages to create something new and interesting – which really engages the consumer. That means we’re very much focusing on building content from the consumer need upwards rather than from the brand down.
“That’s where the revenue growth is right now. What we are seeing is publishers, brands and agencies all operating in that space together. The publishers own the talent and the content has to be really good for it to work. It has to be very well aligned to consumers’ needs,” she adds. “Content creation is the story of 2014. It is content that will build engagement and interest – and that will help you get brand ambassadors who will share your content.”
Mobile’s on the move
Some areas are seeing particularly significant growth at present. Mobile, for example, is thriving as accessibility through devices improves and brands begin to come to terms with how to create and deliver strong mobile content.
Adam Berke is president and founding member of AdRoll. He said of mobile’s rise in his recent blog for Venture Beat that mobile is not only seeing increased spend, but also a shift in the types of players investing in it: “There can be no more predictable prediction than calling 2014 ‘the year of mobile’ – but there is one under-appreciated trend. That is how much the roster of major players is set to change in the mobile ad ecosystem.
“As overall spend in mobile gets to a place where it can sustain a thriving ecosystem, the big players from the desktop display world will start to move in. The leading companies in that space have had years to scale their teams, technology, and customer base – and in ad tech, scale matters. They have large, installed bases where layering on mobile will present greater value to the customer than focusing on mobile alone or trying to work backwards into the established world of desktop display.”
According to the latest IAB and PwC survey of half-year figures for online advertising, UK mobile advertising grew by 127 per cent in the first half of 2013, and now accounts for 14 per cent of total digital spend. IAB’s European trends survey reveals mobile advertising revenues leapt a massive 82.8 per cent across the continent as a whole – from €3.769bn in 2011 to €6.889bn in 2012.
The social scene
Social media will clearly also have a significant impact in 2014. Marketers now have the ability to reach out and communicate on a personal level with their target audience – and on a daily basis.
Social media is now the top internet activity. Americans spend an average of 37 minutes daily on social media, a higher time-spend than any other major internet activity, including email, according to Business Insider.
Social on mobile is becoming particularly strong: 60 per cent of social media time is now spent on smartphones and tablets as opposed to desktops, the same report states.
As a result, seven out of ten marketers expect their companies to increase spending on social media in 2014, says the American Marketing Association.
Kathryn Kenny heads up social media strategy at New Look, and says social is now dominant for the fashion retailer.
“We do an awful lot of social advertising and social content right now,” she says. “That’s because it’s simply the easiest way to our target market. We’ve just done a campaign, for example, which was entirely through social channels, with all of the spend going through YouTube, Facebook and Twitter. We need to be fully engaged with our audience at all times – so we need to be always on.
“Moving forward, we are starting to do more around geo-targeting and personalisation, because they give us that greater connection with our audience.”
Earned steps up
While paid media continues to get the lion’s share of budget, according to the Econsultancy report, 55 per cent of companies stated they will focus more on earned media this year to get more value for their money – an indication of the more holistic, orchestrated and integrated marketing approach that a greater number of marketers are beginning to adopt.
However, it’s not all encouraging news. Introducing the Econsultancy report, Simon Robinson, senior director, marketing and alliances EMEA, at co-authors Responsys, stated that the rapid change in advertising and marketing strategies is pushing some brands into unproductive strategies: “Marketers today are pumping out more campaigns than ever, across an increasing number of channels, and yet, revenue isn’t increasing like it used to. In fact, for many, it’s starting to stagnate or decrease.
“We are in the midst of a campaign crisis. Consumers are not only more distracted by dual-screening and disruptive technologies, they are fed up with the inundation of often untimely or irrelevant email, mobile, social and display messages they receive from brands,” he added. “Yet 34 per cent of companies still plan to increase focus on acquisition marketing, while just 18% will focus on retention strategies this coming year. By failing to sufficiently fund activities that drive loyalty and lifetime customer value, these companies will remain stuck in this cycle of never ending campaigns, with diminishing returns.”
The time has come, he added, for marketers to “optimise the consumer’s entire journey with a brand”, not individual interactions.
