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Digital marketing in 2020: marketers increase digital spending despite challenges

Internet marketing *Display advertising *Contextual advertising *Content-marketing *Search engine optimization *
This article is based on Nielsen annual marketing report. Marketing is continuously transforming, and many marketers are spending more money on digital media. In fact, over half of all advertising budgets in the US are spent on digital marketing. But how can marketers know the efficiency of these new channels?

As mixed feelings continue to grow, digital channels continue to expand. Many marketers believe they don't have the right tools to evaluate ROI across all ad campaigns properly. Digital marketing investments are typically made with a belief of value that's not supported by actual data. As a result, treasured marketing dollars are wasted, and more lucrative marketing strategies are overlooked. However, to maintain long-term success in marketing, you need to substantiate your marketing strategies.

Digital has had a significant impact on marketing. As a result, consumer purchases can no longer be pinpointed to a particular campaign. A fragmented path makes it difficult to create the perfect marketing mix that leads to more customers. Unfortunately, this is just one of the many challenges that marketers are facing today.

Digital Media Budgets: Perception Versus Reality

An analysis of over 350 marketers revealed some disturbing information. With the expansion of digital, the novelty of it is impacting marketers' confidence. These channels are used despite any proven ability of success. Decisions are made on perception rather than reality. Moreover, perceived value increases spending. It's scary because a faulty marketing structure can cause a company to lose millions of dollars on ineffective advertisements.

Just as in 2018, paid searches and social media continue to top the list. They are now joined by video. Many successful digital marketers have found other channels to be less effective, like podcasts, streaming audio, and mobile advertisements. Some marketers have high confidence in email marketing, and that's not hard to understand because it's easier to calculate the ROI.

Surprisingly, social media and video marketing lack behind email marketing. Many marketers have been confident about these new digital channels and perceive them as being effective with no data to support a successful ROI. They continue to reinvest, sometimes over 12 months, even when the performance is lackluster. However, the strategies are different when using traditional forms of media like print, radio, or TV. These conventional forms of advertisement have existed longer, and if they fail to produce desired results, advertising dollars are abruptly halted. It appears marketers are holding traditional channels to a higher standard than digital.

Intuition is not enough. Look for measurement solutions that can confirm your media perceptions. While it's difficult to determine what course of marketing influences customer behavior, it's necessary for the long-term success of your marketing campaign. Consider talking to an industry expert and overcome any learning curves to know if your investments are in a safe harbor.

Data Quality is Not a Priority

An effective marketing campaign begins with clear objectives and strategies for utilizing all media channels effectively. But once you built a strategy, what method is used to determine its effectiveness? Audience targeting is one of the top strategies used by successful marketers.

Remarkably, many brands are less concerned with data quality than agencies. This can bring problems in the long run. Companies typically have access to more data than agencies. They can track historical data like partnerships, customer behavior, and campaign performance.

Data quality is essential, and the fact that it's being minimized is a significant concern. Without precise information, marketers must also think about how it can ultimately affect their relationship with their agency. After all, a marketer is paid for the results.

Don't be misled into thinking that data quality is not essential. Improve data quality while focusing on targeting your audience.

Digital Will Break Down Advertising & Trade Promotions

Many marketers see media, whether it's paid or unpaid, as a more successful strategy than trade promotion. It's quite interesting because companies tend to spend more on trade promotions then media advertisements. That's often due to trade promotions being considered as part of the process of doing business. This may have been true years ago, but not today.

Trade promotion is a good way of marketing services and goods. Eventually, digital will disrupt how products and services are promoted. Future technology like augmented and virtual reality will minimize marketing errors and allow greater control over in-store performance. This will not only increase available data but also cause better planning and performance.

There's enormous value in promotions, so don't overlook them. They can provide critical data about consumers, like shopping habits and conversion trends. Avoid the misappropriated focus on paid media and engage them towards earned media.

Obstacles Affecting OTT Adoption

OTT has the potential to be a fantastic marketing platform, for it bridges together digital and traditional media. Unfortunately, there are many reasons why it happens to fail. Some of the primary reasons are measurement capabilities, internal knowledge gaps, and media planning efficiency/transparency. What's interesting is that the inability to adopt OTT as a central platform for marketing is complicated with many challenges.

However, some savvy marketers are taking the challenge head-on before competition crowds out opportunity. Success will come down to evaluating complex web factors that affect consumer behavior. One way of overcoming these obstacles is by partnering up with other brands to fill in those gaps. Another obstacle is the difference in how the platform is viewed. Brands often see targeting and measurement as a huge obstacle, whereas agencies don't.

Preference is Given to New Customers

The 80/20 rule continues to hold on top for most marketers. It's expected that 20% of a business's customers are responsible for 80% of its revenue. Despite this, marketers often place greater importance on new customers. When respondents were asked about their top marketing objectives, 41% were giving priority to obtaining new customers. Another 28% focused on expanding brand awareness, whereas only 13% were primarily focused on customer retention. Undeniably, this is a missed opportunity for many marketers.

A recent study conducted by Nielsen suggests that disloyalty among existing customers is growing. This confirms that the 80/20 rule may not be a source for determining future revenue. Since a brand name is no longer a determining factor in the purchasing of goods, marketers need to focus more on retention. Agencies often operate from emphatic directives, whereas brands may focus on the bigger picture.

Implement different marketing strategies for high-value customers, primarily focusing on retention and increasing customers' satisfaction. Then communicate your marketing objectives to your agency, so they will know what your goals are.

Recommendations for Marketers

  • Consider these tactical recommendations for higher profits from investments while improving long-term outcomes;
  • Communicate goals and strategies clearly. Don't assume that the agency knows what your intentions are;
  • Educate yourself on the negative impacts of disproportionately focusing on paid media. Don't underestimate the importance of promotions, that's how you'll learn more about your clients;
  • Data quality is essential; it tells you what works and what's not. Customer targeting cannot be successful if the data does not support it. Therefore, work on improving your data quality efforts;
  • Continue to invest in paid search, social media, and video, but don't forget about email along with other channels that can support your marketing goals;
  • OTT efficiency can be increased through industry partnerships. Therefore, build your existing skills, test small campaigns, and start forming alliances;
  • Don't run your marketing based on guesswork. You need to know what works better. Measuring ROI can be complicated, so it's better to cooperate with industry experts to overcome learning curves. At first, it may seem overwhelming, but it will pay off in the long run.
  • You need to recognize that your media decisions, to some extent, are guided by perceptions rather than data. Acquire measurement solutions that will validate or disprove your present course of action.
  • Perception of channels rather than hard data should not be used to determine media planning.

In conclusion, the perception has been a natural course for many marketers, but now they are starting to get nervous. They begin to realize that the payoffs are not matching enthusiasm. The good thing is that the industry is continuously working to bring marketing solutions that can help with this problem. It's anticipated that these solutions will allow marketers to make better decisions that will be more cost-effective and profitable.
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