According to data presented by Finaria, global search advertising revenues, the largest segment of the digital ads industry, rose by 6.7% year-over-year to US $152.6bn in 2020. The trend is set to continue in 2021, with the entire market reaching US $171.6bn value, US $19bn more than a year ago. The year 2020 was a challenging year for the entire digital advertising industry, with even the largest players like Google witnessing significant revenue drops amid the COVID-19 crisis.
However, as millions of consumers shifted from brick-and-mortar stores to webshops, the entire market bounced back by the end of the year showing strong growth across all regions.
Mobile Search Ad Revenues to Jump by 16% YoY to US $86B
Thousands of companies, especially the big ones, have been hit hard by supply chain disruptions and customer challenges caused by the pandemic. To cope, many of them stopped their digital ad campaigns and reduced search advertising bids in the first half of 2020. As a result, cost per acquisition (CPA) and cost per click (CPC) were down across verticals and markets.
The shutdown in the travel industry, which spent most of its advertising budget on search ads before the COVID-19, caused another major hit.
In 2019, brands and media buyers spent US $142.9bn on search engine advertising worldwide, more than social media, video, and banner ads combined, revealed Statista Digital Market Outlook. In 2020, this figure jumped by almost US $10bn, despite the sharp fall in ad spending in the first two quarters of the year.
Brands and media buyers spent US $142.9bn on search advertising worldwide, more than social media, video, and banner ads combined.
Statistics show the global search advertising revenues are expected to jump by 12.4% in 2021. The increasing trend is set to continue in the next few years, with search ad revenues reaching US $211.4bn by 2025.
Mobile search engine advertising revenues are forecast to jump by 16% and hit US $86bn this year. By 2025, this segment of the search advertising market is expected to hit a US $120.2bn value.
Ad spending in the desktop search advertising segment is forecast to witness modest growth in the next few years, with the figure rising from US $85.5bn in 2021 to US $91.1bn in 2025.
Search Engine Advertising: The United States to Generate 40% of Global Revenues
Analyzed by geography, the United States represents the world’s leading search advertising market, expected to hit US $67.74bn value in 2021, or almost 40% of total spending this year. Statistics show the US search ad revenues jumped by nearly 20% amid the COVID-19 crisis. By 2025, the entire market is expected to hit US $82.2bn value.
As the second-largest market globally, search ad spending in China is expected to grow by 11.3% YoY to US $37.4bn in 2020. The United Kingdom follows with a 14% year-over-year growth and US $12.3bn in ad spending.
Japan and Germany ranked as the fourth and fifth-largest markets globally, with US $6.7bn and US $5.1bn in search ad revenues, respectively.
Statistics show the combined ad spending in the five largest markets is expected to jump by 22% YoY and hit US $157.2bn value by 2025.
MMA Global introduced an analysis showing that outcome-based marketing plans can outperform traditional reach-based marketing plans by more than 50% on return on ad spend (ROAS).
The growth strategy, Outcome-Based Marketing 2.0 (OBM2), represents a major step forward in validating how marketing organizations can achieve profitable growth by targeting more responsive audiences.
The OBM2 strategy enables brands to align budgets, channel allocation, and audience targeting directly with ROAS tied to those consumers who are more likely to respond to and be impacted by a brand’s advertising.
MMA found that a marketing campaign organized around the most responsive target audience for a brand — dubbed the “movable middles” — will yield far better outcomes than traditional media plans optimized for reach. Movable middles are defined by having a mid-range probability of buying an advertised brand; they are proven mathematically to have five times the responsiveness to that brand’s advertising and are unique to each brand. While they overlap somewhat with heavy buyers, they also include medium, light, and non-buyers. This helps marketers not only achieve good returns, but also expose their brand to a larger group of receptive consumers for long-term growth.
Joel Rubinson, the former Chief Research Officer for the Advertising Research Foundation, conceptualized the methodology behind OBM2 strategy (in part based on work conducted two years ago) on MMA’s behalf. Rubinson worked in conjunction with global information services and technology company Neustar to leverage their agent-based simulation models that incorporate media consumption and purchase behavior data from their targeting platform. These models uncover the individual consumer-level activities and market-level factors that are predictive of purchase intent with a high degree of accuracy. This approach helped find non-buyers with similar purchase probabilities and predicts where and how to target these important audiences.
“We are incredibly grateful to Neustar for working with us by providing their team’s amazing support and advanced innovative modeling techniques to predict media consumption and purchase behavior across 100% of U.S. households. This capability was invaluable to proving Outcome-Based Marketing 2.0’s value,” said Greg Stuart, MMA CEO. “MMA has been on a decade-long pursuit of a more disciplined understanding and implementation of ‘modern marketing’ for CMOs responsible for higher levels of business growth and profitability for their businesses. This new strategy is one more leap forward to achieve this as well as to raise the stature and gravitas of marketing as a whole.”
In a proof-of-concept study, MMA and Neustar deployed agent-based simulation methodology to target the movable middles on behalf of a brand of frozen pizza in the U.S. market. The analysis proved:
An Outcome-Based Marketing 2.0 plan optimized to target the movable middles outperforms a traditional reach plan by more than 50% on ROAS
Targeting the movable middles helps marketers increase marketing outcomes across the board versus traditional reach-based approaches, including attracting more non-buyers, increasing total consumer reach, and increasing buyer-penetration across light, medium, and heavy buying groups
Movable middles can be predicted with 99% accuracy for each brand, regardless of industry vertical.
“The MMA always tackles the toughest marketing challenges, particularly when it comes to data and marketing optimization. Empirical evidence and analytics validate OBM2 as the most effective approach to improving return on advertising spend.” said Norman de Greve, CMO, CVS Health, and Chair of MMA’s North American Board.
The MMA always tackles the toughest marketing challenges, particularly when it comes to data and marketing optimization. Empirical evidence and analytics validate OBM2 as the most effective approach to improving ROAS.
“We want to ensure the brands we sell in our stores have the best chance of being considered for purchase — and MMA’s work is a welcome addition to any brand’s planning toolkit to help deliver results in an efficient and effective way,” noted Kay Vizon, Director of Media Services for Kroger. “I support this advancement in planning and applaud the MMA for their ongoing push to uncover ground-breaking and data-driven approaches to further brand growth.”
“We cracked the code on ad responsiveness when we realized that using a beta distribution to model consumer probabilities of purchase was the connection between ad responsiveness and targeting,” added Rubinson. “We are, in essence, arbitraging the opportunity to push harder on the groups of consumers that will predictably buy more of a product when exposed to advertising.”
“This research uncovers why audience targeting recommendations based on ROAS and purchase probability work,” said Marc Vermut, Vice President, Marketing Solutions at Neustar. “It found that a marketing campaign organized around those ‘movable middles’ — the most responsive target audience for a brand — will yield far better outcomes than standard media plans optimized for reach.”
Marketing campaign organized around those ‘movable middles’ will yield far better outcomes than standard media plans optimized for reach.
Additional categories, including detergents, nutrition bars, and margarine, will be run through the same analysis in the coming months. The MMA has raised funds and expects to validate this planning approach in real-world, in-market experiments that will last a full year called “Brand as Performance.”
Noted marketing academics, including University of Oxford’s Dr. Felipe Thomaz and Dr. Andrew Stephen, as well as UCLA Graduate School of Management’s Dr. Dominique “Mike” Hanssens, have conducted a review of the methodology used in creating this new growth strategy and support MMA and Neustar’s model. Both universities are developing other complementary assessments and research that validate the findings. Meanwhile, a white paper on OBM2 can be found here.
Automotive has been hit less hard than many retail sectors during the pandemic. Car makers have been innovating both in their relationship with dealerships as in the way they reach out to end consumers. To get a better understanding of the state of automotive marketing, Portada interviewed Pamela Arteaga, Global Marketing Manager Cadillac. Her take on brand-dealer relationships, customer outreach through non-physical channels, her Hispanic heritage, sales attribution models…and more.
The communication between car makers and dealers lies at the heart of automotive marketing. According to Arteaga, the connection between car dealerships and Cadillac has been tight throughout the pandemic. “We started to hear about the pandemic situation in China early on and we developed some best practices from China and we started tailoring material and using guidelines from our Asian and Chinese teams. These guidelines include the cleaning of cars. The use use of apps so that they don’t have to go to dealerships, pick up processes and other actions to connect with customers through non-physical channels.”
Automotive Marketing: Learning from China
Arteaga mentions “that one of the learnings from China was that through a joint effort of brand and dealerships they were doing events via social media like Facebook live and Instagram events. People went online to watch a review of the car, to learn about technologies etc. ”
In March 2020, just before most lockdowns were instituted, the automaker made its Cadillac Live service available in all 50 states across the United States. Those efforts have included launching online video sessions with brand representatives to explore cars, a service that saw a 50% increase in visitors once the pandemic started, WARC reported. Cadillac Live allows for the reservation of a time for a live agent to tell the prospective buyer about the details of the car. Information of the customer is taken and a test drive and information is shared with the dealer.
Online video sessions to explore cars saw a 50% increase in visitors once the pandemic started.
Arteaga specializes in brand strategy and is responsible for bringing brand and marketing consistency to Cadillac’s 9 international markets, including China, Canada, Middle East region, Mexico, Russia, Korea, Japan, Europe and Israel. Out of her work in Mexico she also derives insights that are useful for the multicultural market in the U.S. where she supports U.S. multicultural marketing which is led by Alexis Kerr, Head of Multicultural Marketing, Multicultural Strategy, Content and Execution at Cadillac.
Born in Toluca, Estado de Mexico, Mexico. Arteaga is a proud Mexican woman and mother to a 5-year old
living in Detroit. She graduated from Tecnológico de Estudios Superiores de Monterrey with a bachelor’s degree in Communication Science in 2003 and an MBA in 2014 from the same institution. Automotive marketing became her passion early on as she worked for General Motors Mexico for over a decade where she helped grow Buick, GMC and Cadillac as the Marketing manager and relocated to Michigan in January 2019 to take on her current role. According to Arteaga, to have a Hispanic-Latin American background can substantially help a brand marketer: “It provides more tools to be thoughtful and holistic about tactics. It also helps tailor messaging and strategy and to see things differently. We want to build a community We have been working for the last couple of years to bringing a face to our advertising but also to the people working on it in-house and in our agencies.. So that the customer feels we are on the same page and have a unique point of view that is tailored to them. ” “When it comes to Hispanic in the U.S., we want to make sure to be authentic and are not necessarily ROI driven.”
A Hispanic background provides more tools to be thoughtful and holistic about tactics and strategy.
Cadillac’s Pamela Arteaga will be one of the many leading brand marketing executives to speak at Portada Live Latin America. To find out about Portada’s new virtual knowledge-sharing and networking solutions at PortadaLive Latin America involving a myriad of brand decision makers, please contact Sales Director David Karp at David@portada-online.com.
Automotive Marketing: Unique Local Markets and Move to Digital
Asked about what changes she has seen in the markets she oversees over the last 6 months, Arteaga emphasizes that each market is unique and has its own nuance. “There are differences between Asia and America in terms of how consumers react to digital tools. Canada and U.S. have the Cadillac live online platform while China is planning to implement it.” Mexico has it for Chevrolet, and Cadillac is exploring to have it for Cadillac (Live) as well.
Arteaga adds that when it comes to the media mix there has been an overall move to digital -including retargeting, social, search and influencers – both in the U.S. and Mexico. “This is a trend that already surfaced before the pandemic, particularly when targeting the luxury consumer.”
Cadillac’s Multitouchpoint and Media Investment Optimization Tool
Sales attribution models also please an important role in automotive marketing. Cadillac uses a high propensity targeting tool that provides details on how likely prospects are to buy a Cadillac. ” We use both a multitouch and media Investment optimization tool,” Arteaga says. “Our M1 High propensity tool, allows to talk to customers from an audience perspective and follow them via offline and online media. These tools are advanced analytics or machine learning programs that look longitudinal over time examining across dozens of categories of variables and hundreds of individual independent variables. Dependent variables can be rotated, but most of the time it is sales. Outputs are ROI by media type, ROI by media type by model, ROI by Marketing activation (e.g. auto shows), Marketing budget needed to hit sales objectives, etc. These models are 85%+ accurate proven by back testing and a technique using an in sample and out of sample error testing.
Our M1 High propensity tool, allows to talk to a customer from an audience perspective and follow them via offline and online media.
Arteaga notes that the marketing pioneer John Wanamaker (1838-1922) once famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. “In the 21st Century, advanced analytics and machine learning can tell us with a high degree of accuracy the effectiveness of marketing by media and channel,” she concludes.
Americans place a value of more than $1,400 per year on the array of free online services, digital content, and mobile apps that are currently funded by advertising, according to a new survey conducted by the Digital Advertising Alliance (DAA).
Respondents said those ad-supported content and services were worth $1,404 annually, an increase of $206.64 – or 17% – over the $1,197 that respondents assigned in value to such services in a similar survey in 2016.
“With tens of millions of Americans struggling to make ends meet, ad-supported digital content and services save families significant money by reducing the cost for access to vital information, tools, and content, so it is imperative we continue our work of protecting the advertising model that helps fund those services,” said Lou Mastria, executive director of DAA. “Paying an additional $1,400 per year for access to popular websites, services, and apps is not a viable option for most Americans. The DAA will continue to provide convenient and effective tools for choice around the types of advertising consumers want to receive.”
Ad-supported digital content and services save families significant money by reducing the cost for access to vital information, tools, and content.
Among the survey’s other findings:
The vast majority (85%) say they would reduce their online and mobile activities if they had to pay hundreds of dollars a year for the content and services they currently get for free.
Four in five respondents (80%) say they would be more likely to purchase a mobile phone offering more free apps over a comparable phone with fewer free apps.
Nearly all the respondents (93%) say free Internet content such as news, weather, email, and blogs is very or somewhat important to them.
A large majority (84%) say they prefer the current ad-supported Internet where most content and services are free over a paid Internet with no advertising.
Conducted via SurveyMonkey among 1,080 US adults, the survey sought to quantify the aggregate value that Americans assign to the major types of services and content that are currently available for free because of advertising.
Respondents were asked to estimate how much people would have to pay for 19 different types of online services and content, ranging from e-mail to video, maps, sports, and weather if they were offered only on a subscription basis rather than for free with ads. The total estimated cost of those services, assigned by survey respondents, was $116.99/month or $1,403.88/year.
The survey was conducted on September 16-17, 2020. Based on a confidence interval of 95 percent, the margin of error for the survey is +/- 3 percent. The full survey results are posted on the DAA website.
Ecommerce marketing automation platform Omnisend, recently published its Email & SMS Marketing Stats & Trends Report (Q2 2020) . The results of the study provide interesting insights on e-commerce consumer behavior towards email, SMS and push marketing messages during the pandemic. One insight is that consumers gravitated toward trusted channels such as email marketing when doing their online shopping.
Omnisend analyzed email send data for over 2.4 billion emails sent from the Omnisend marketing platform during Q2 2020. They also looked at more than 1.8 million SMS and push messages sent through the Omnisend platform. The data below includes sends, opens, clicks, and conversions from April 1st through June 30th for both 2019 and 2020.
Email Marketing Performance
Email Open Rates:
Email open rates increased year-over-year for both promotional campaigns and automated messages during the second quarter. Promotional campaigns (traditional scheduled messages) registered an overall open rate of 10.85%*, a 29.37% lift compared to the same period in 2019.
This increased performance is not entirely surprising. As we saw in the COVID-19 email marketing metric report, when consumers increased their online shopping they turned to trusted marketing channels like email as a source of product discovery and awareness.
When consumers increased their online shopping they turned to trusted marketing channels like email as a source of product discovery and awareness.
Online DTC brands who don’t send these types of messages because their ecommerce platform isn’t integrated with their email provider are missing a huge growth opportunity.
Type of Automation
Lift Over Campaigns
* List management, send cadence, and the use of Booster sends (remails) on a per-client basis impacts promotional campaign open rates—often resulting in lower overall numbers. For instance, it is common for remailed messages, because they specifically target non-openers, to receive roughly half of the open rate as the initial send—therefore reducing the overall open rate.
Email Click Rates:
While promotional campaigns saw a decrease in click rates, the same cannot be said for automated messages. Automated messages generated a 21.24% click rate, marking a 15.37% YoY lift over automations in 2019.
When comparing click rates in Q2 of this year, automated messages see an improvement of 49.36% over scheduled promotional campaigns, with birthday, cart abandonment, and welcome emails leading the way.
Type of Automation
Lift Over Campaigns
Email Marketing Conversion Rates:
Overall, the conversion rate for promotional email marketing campaigns was 5.37%—an 88% year-over-year lift. Maybe more promising for brands is that the conversion rate increased each month of the quarter, hinting at an increased reliance on not only ecommerce but email marketing as a primary purchase channel.
This behavior is indicative of intent-based shopping. Instead of consumers clicking on an email and casually browsing the website, emails had to ‘earn’ their clicks—but once the subscriber clicked on the email their intent to purchase was higher.
Most importantly, automated messages drove 26% of the email marketing conversions while accounting for less than 2% of the email sends. Online brands should look to automation as a major component for increasing their sales.
Type of Automation
Lift Over Campaigns
Overall Campaigns and Automation Performance:
Scheduled promotional campaigns made up 98% of the email volume sent during Q2 2020. These campaigns saw YoY increases in open and conversion rates, while click rates slightly decreased.
The worst-performing automated message, in terms of conversion rate, still saw a rate nearly double that of promotional campaigns.
The numbers don’t lie — automated lifecycle messages are powerful sales enablers for ecommerce businesses. Even though these messages accounted for less than 2% of the email marketing volume sent during Q2, they generated 26% of the conversions. In fact, the worst-performing automated message, in terms of conversion rate, still saw a rate nearly double that of promotional campaigns. Online businesses who fail to utilize automated lifecycle messages are limiting their growth potential.
For more insights including Transactional Performance, SMS and Push Message performance as well as E-commerce takeaways, please click here.
In contextual targeting, advertising media are controlled on the basis of the content of a website using linguistic elements. The advertisements themselves are selected and served by automated systems based on the context of what a user is looking at. Contextual advertising helps a brand understand what a consumer might like without needing personally identifiable information. Results of a new study show that digital advertising campaigns that employ contextual targeting are more cost-efficient than behaviorally targeted campaigns.
Amidst a wave of data privacy regulation and third party cookie phase-outs that have digital advertisers scrambling for solutions to maintain campaign efficiency and scale, contextual targeting has frequently been touted as a data privacy-friendly alternative to behavioral targeting––but until now the viability of that claim has gone largely untested. Tech and media firm GumGum published a case study called Understanding Contextual Relevance and Efficiency: A Comparison of Contextual Intelligence Vendors and Behavioral Targeting. Findings seem to give credence to the promise of contextual as results indicate that digital advertising campaigns that employ contextual targeting are more cost-efficient than behaviorally targeted campaigns. The study was sponsored in partnership with Dentsu Aegis Network and conducted by an independent third-party researcher.
It is fabulous to finally see a head-to-head contextual-behavioral match up and get hard data behind contextual targeting’s value.
“Machine learning-backed contextual targeting has been a central tenet of our offering since the get-go, so to some degree, from our perspective, this study states the obvious, but it is fabulous to finally see a head-to-head contextual-behavioral match up and get hard data behind contextual targeting’s value,” said GumGum CEO Phil Schraeder. “There are plenty of doubting Thomas’ about contextual as an answer to the cookie’s death and this ought to give them some faith.”
While the study was principally designed to better understand the overall effectiveness of contextual intelligence in comparison to behavioral, it also sought to benchmark four of the top contextual intelligence vendors in the industry. For the study,Dentsu Aegis Network ran live campaigns for four of its major brand clients, including Sephora, across four contextual intelligence vendors, as well as by leveraging behavioral targeting. The campaigns utilized the same brand safe inventory. The campaign served 1M impressions, which were measured for cost efficiency and content relevance.
We needed to gauge the effectiveness of the numerous emergent contextual intelligence offerings.
“In a world with diminishing access to audience targeting, as responsible partners to our clients, we need the most robust understanding of potential best practices and tools available for success,” explained Brian Monahan, Global Client President and Head of US Ventures for Dentsu Aegis Network. “Beyond value-testing contextual, we also needed to gauge the effectiveness of the numerous emergent contextual intelligence offerings. This study gave us both of those things––and the results are compelling.”
Indeed, the study found that, taking into account CPMs, the contextual Intelligence vendor in-demo impressions (eCPM) cost 29% less than behaviorally targeted in-demo impressions, with GumGum Verity™ impressions costing somewhat less (36%)––and overall that for CPC and vCPM the costs of using contextual targeting were lower than behavioral (48% and 41% respectively).
For the study, Nielsen Digital Ad Ratings Reporting, Xandr, GumGum, MOAT provided the cost efficiency measurement of impressions. Appen, a third party vendor specializing in human annotation of urls, measured content relevance.
Marketing technology (MarTech) has revolutionized the way that most areas of marketing are planned, executed, and evaluated. Due to the pandemic induced e-commerce boom, in 2021 and beyond, brand marketers MarTech needs worldwide have evolved towards all e-commerce related martech areas, including e-commerce marketing, advertising and multi-channel data collection, attribution, curation, enrichment and decisioning. Navigating the now 7k+ platforms that claim to help marketers understand, reach, engage, and measure their target audiences is no small task. Here is a primer on marketing technology – what you need to know about today’s MarTech platforms, how you can evaluate and select them for your specific needs, and how the industry will evolve in 2021.
Marketing technology has traditionally come in the form of a software whose principle aim is to assist you in planning and carrying out marketing campaigns, gathering and analyzing the results, and applying insight to future campaigns.
At the most basic level, marketing technology can be broken down into six groups that marketing technology “godfather” Scott Brinker defined as:
• Advertising & Promotion • Content & Experience • Social & Relationships • Commerce & Sales • Data Management
The advent of marketing technology can be brought back to 1999, when Salesforce launched the Software-as-a-Service model with the goal of making it unnecessary for organizations to spend a fortune to create their own bespoke CRM systems that were often slow and tedious to use. Under SaaS models, brands pay a monthly or yearly fee to use the tools offered. These tools can cost anywhere between $5,000 to $50,000 a year.
Fast forward and today, 29% of marketing budgets are dedicated to marketing technology, Ogilvy has a 900-person MarTech team, and MarTech software are being acquired for billions of dollars.
What MarTech Does for Marketers
The best MarTech tools will offer a combination of the following benefits:
Automation of workflows: Most marketing technology solutions automate tasks that are too time-consuming and/or complex to complete manually, like pulling, organizing, and analyzing data.
Support streamlined communication: Most MartTech services will enable better communication within and between work teams through tools that help teams track the status of projects and increase collaboration.
Generate insights: MarTech solutions should do more than pull data – they should be able to draw actionable conclusions that support better decision-making, optimize campaigns, and reveal opportunities and gaps.
Breaking Down the Software Types
Perhaps the most basic way to break down marketing technology is to think about them as either point solutions, which provide tools that address one specific aspect of marketing, or suite solutions, that address more than one category of tools. When a vendor combines these tools under one platform, it is often called a MarTech stack. Whether a brand selects a point or a suite solution depends on a variety of factors determined by a campaign’s objectives and budget, and there are very good reasons for picking both.
To choose your suite of tools, it is important to consider your business model, marketing goals, and how your targets move down the marketing funnel. Often, products are more effective at assisting with a particular stage of the funnel than others, Smart marketers will make sure to combine tools whose tools will help you address the entire sales funnel. Getting to know the tools yourself will be important for both selecting and using them effectively: many of them offer free trials, which you can take advantage of when comparing your options.
Let’s dive a bit deeper into the types of tools a marketing technology solution might offer:
Content Marketing tools address the content production process, providing assistance with content management. This means tools for search engine optimization, landing page and A/B testing, content discovery, content distribution, digital asset management and lead generation.
Rich media tools assist with design, video, and audio creation and promotion, and include video making tools, video marketing platforms, podcasting tools, graphic design tools, and interactive content tools.
Social media management tools assist in planning, scheduling, posting, and measuring social media activity. Monitoring tools help you track your engagement as well as that of competitors, and identify trends. Influencer marketing platforms help brands find and connect with relevant influencers in your industry.
Marketing automation platforms assist in automating and simplifying the basic tasks associated with marketing: marketing automation software automates analysis and social media tasks, and email marketing tools streamline email marketing. Mobile marketing platforms assist in the design and management of push notifications, promotions and offers for mobile apps.
Advertising platforms and tools (see also Ad-Tech below) assist in paid advertising tasks. Search engine marketing helps you identify keywords, conduct competitive analysis, and optimize search engine campaigns. Social media advertising focuses more specifically on ads across platforms like Facebook, Instagram, and Twitter. Native advertising tools help you create more effective ads for websites you do not own. Programmatic advertising tools automate the complex process of buying and selling ad spaces so that you can better reach your target audiences. Performance marketing exclusively focuses on the best advertiser return on an intended action by the consumer.
Sales enablement tools manage the sales and customer management processes. Sales automation platforms manage contacts, leads, sales planning, email marketing, and tools like click-to-call. Customer support tools streamline communication with customers, and customer relationship management tools assist in contact management, task management, and sales reporting.
Data and analytics platforms offer web analytics, tagging, and predictive analytics tools. Data management tools gather third-party data to inform ad targeting (including retargeting) and media buying. Customer data platforms collect first-party data for improved targeting. Web analytics tools assist in forming a better picture of those visiting your website in terms of demographics and behavior. They also include tag management tools simplify the process of tagging different types of data on your sight. Predictive analytics tools use machine learning and data mining to create predictive models for your websites.
The Rapid Growth of Marketing Technology
As technology becomes increasingly sophisticated, the value of effective MarTech solutions and the money brands are willing to invest in them increase rapidly. The accelerated pace of corporate digital transformation (including e-commerce/retail marketing) induced by the COVID-19 pandemic worldwide (e.g. in Latin America) has been a major driver for MarTech investments in 2020 and 2021.
Brands are forming a better understanding of how they can use digital marketing technologies to support their digital marketing efforts. In recent years, brands felt like they needed to invest in dozens of independent vendors to meet their needs. Now, while brands recognize that independent specialists are necessary for some functions, they are increasingly turning to one primary vendor. A study by Walker Sands found that more than a third (34%) rely on a best-of-breed stack (the same rate as in 2018) while 27% rely on a single-vendor suite. 45% of those surveyed asserted that the consolidation of MarTech has made it more accessible.
Large legacy brands’ acquisitions of smaller specialist providers have driven this consolidation and strengthened the core of their offerings.
In the recent years, IPG media acquired Axciom for $2.3bn, Publicis acquired Epsilon for $4bn, Dentsu Aegis Network acquired Merkle for $1.5 billion, Adobe acquired Marketo for $4.75 billion, and Salesforce acquired Tableau for $15.7 billion. In addition, the best MarTech platforms are investing in integrating emerging technology into their solutions.
Marketing Technology Trends: The Rise of AI and the Ad-Tech Boom
process of gathering, analyzing, and drawing insight from data. It automates the process of sifting through the massive amounts of information brands gather through their campaigns to help brands understand their customers’ journeys.
Nonetheless, marketers are still figuring out how to use AI in their technology solutions. 40% of respondents to a Walker Sands study believe AI will continue to be a buzzword in 2019, though only 32% currently use AI or have plans to invest in it this year.
Finally, there is Advertising Technology (AdTech), this includes the world of programmatic (including ad buying, direct, and real-time bidding), supply-publisher oriented tools like SSPs and demand (brand, media agency) oriented ones like DSP’s, Platforms that manage the Data that makes the advertising efficient as well as new Ad-Channels Advertisers are increasingly tapping into including new forms of video advertising like CTV, voice search and others. The growth of ad-tech capabilities is driving the use of MarTech, with 54% of respondents to the Walker Sands study currently incorporating adtech into their strategies, making it one of the most-used categories of MarTech. This can partially be explained by improvements in attribution measurement capabilities, as Big Data is making it easier and easier for marketers to drive ROI. In terms of where marketers want ad tech to help them, 52% prioritize ad spending in social media, while 17% prioritize it for Google Ads. This suggests that driving engagement and conversation, not just clicks and brand awareness, are the most important goals for today’s marketers.
The Bottom Line: Marketers Are Happy with Marketing Technology Investment Levels, Becoming Savvier
While the marketing technologies landscape is certainly evolving, marketers appear to be satisfied with their use of the technology. 75% of respondents to the Walker Sands study believe their company is investing in the right amount of MarTech. This is compared to 63% in 2018, a record high for the State of Martech report. This indicates that marketers are learning how to do more with smaller budgets, and run and measure integrated programs. In 2020, smart marketers will continue to take all of these trends and market shifts into account.
More importantly, it allows brands to keep up with customers’ increasingly high standards and expectations. Customers want their interactions with brands to feel personal and relevant, and AI enables a level of targeting and tracking that any marketer should get excited about.
But distinguishing between what can be implemented now and what will be possible in the near future is important, as the field of AI is in constant evolution. Here, we break down the different ways marketers can use AI to streamline operations, deliver better customer experiences and channel data into insight.
AI can be defined as a subset of computer science through which machines display “intelligence” by making predictions and decisions. AI acquires intelligence based on the analysis of data sets, a process enabled by algorithms that tell the machine how to complete tasks and interpret information.
The most basic form of this is machine learning, which uses historical data to predict future outcomes. As the machine acquires more data, it becomes better at making predictions.
AI already driving marketing budgets, data-driven insights
Recent studies reveal the important role that AI plays in driving marketing budgets and business growth strategies. Marketers clearly believe that AI is a valuable tool: 72% of marketers surveyed in a PWC study view AI as a “business advantage.” By 2021, organizations are projected to spend $57 billion on AI platforms for marketing.
And organizations are already seeing the results of implementing AI: 3 of 4 companies using AI have reported a boost in sales of at least 10%. 75% of organizations in another study say AI has driven customer satisfaction by at least 10%.
In terms of how CMOs are currently implementing AI, another recent survey found that many are using it for content personalization (56.5%), predictive analytics (56.5%), and targeting decisions (49.6%). But those are just a few of the ways AI can support marketing efforts today.
AI has 8 broad applications in marketing today
Marketers are accumulating data at an astonishing pace with the intention of harnessing it into better targeting. But sometimes the mere volume of data that organizations acquire makes it difficult for them to know how to make use of it. AI is incredibly helpful in this respect, as it enables real-time analysis of large volumes of data, automate tasks, and generate insight.
1. Market intelligence and insight: With the help of algorithms, machine learning enables in-depth analysis of complex data sets from data management platforms (DPMs), data warehouses, or other repositories, connecting the dots to support marketing intelligence and forecasting in a way that humans cannot.
2. Customer profiles and personas: Through the analysis of on-site interactions, purchasing history, referral sources and geo-specific behavior, AI can help brands form a 360-view of their customers and match them with personalized content and promotions.
3.Lead generation and sales:Machine learning and predictive analytics can help marketers automate the process of generating and scoring leads. They also help brands keep customers engaged through predicting turn: through analyzing users’ engagements with brands, they can tell when someone is about to drop off. Brands can then attempt to re-engage these users with notifications and emails.
4. Media buying: AI automates the laborious process of media buying and ensuring that ads are seen by relevant audiences through programmatic advertising and optimization and measurement platforms. With almost no human input, AI helps marketers analyze, manage, and measure the performance of ad campaigns.
5. Customer experience: According to Gartner, 85% of customer service inquiries will be handled via AI by the end of 2020. AI is increasingly being implemented in the customer experience space to support improved call centers and automated customer service via chat bots and digital assistants.
6. User experience: AI helps marketers optimize user experience on websites through analyzing data about single users’ behavior to personalize content, promotions, and notifications. A study from Evergage found that 33% of marketers are using AI for more personalized website experiences, and that 63% of them noted increased conversion rates, while 61% assert that customer experiences have improved.
7. Natural language generation and content creation: There are a variety of applications for AI in the realm of content. Using simple rules and formats, AI-enabled tools and platforms can author content such as business reports, product descriptions, stock market reports, and sports recaps without human input. Through setting the rules and formats, marketers can dictate the tone and style that the content takes.
AI-enabled content platforms can also make suggestions about what kinds of content formats and topics a brand’s target audience is likely to engage with through tracking users’ online activity.
8. Chatbots: While chatbots technically fall under customer experience, they have changed the marketing world in such a way that they deserve their own dedicated text. AI-enabled bots are successfully delivering customer service for thousands of global brands through natural language processing and machine learning.
Natural language processing allows machines to interpret the meaning of written and spoken speech and respond accordingly, all without human intervention. The machine can track the effectiveness of its responses and adapt accordingly, improving as it has more conversations.
Marketers must self-educate before selecting vendors
Marketers considering ways to implement AI in their organization have to be careful when evaluating different products and platforms. Many use the term “AI” loosely, mislabeling tools that implement data processing and analytics as “AI.” Smart organizations can bring in experts to educate and advise them as they consider the alternatives.
Ask questions about the data sets they use and pay attention to whether they have data scientists on staff. Request a demo and confirm what deliverables and KPIs will be included in their activities.
Make sure your data is clean and high-quality
While AI might seem like magic, it still depends on effective human inputs: namely high-quality data that it can learn from. If marketers don’t format data in a way it can be processed, or you do not have the infrastructure to process it correctly, it will not produce an “intelligent” machine.
To this end, marketers must innovate and collect more annotated data that can be tagged to train AI systems. Measuring only clicks is not going to create a rich enough data set to use for impactful AI.
Remember the human touch
AI will be able to replace humans in many, but not all, of the brand interactions customers expect. Consumers are excited about AI – an Acquia study found that 53% of consumers say they are “looking forward to artificial intelligence making interacting with brands a better experience.” At the same time, the study found that 85% percent claim that “a human touch is needed, in addition to technology, for a positive customer experience.”
Marketers should only use AI where it will enhance customer experiences, and it turns out there are plenty of situations in which people prefer to speak to a human than a machine. 75% of the respondents to the Acquia survey agreed that “the problem with automated experiences – interacting with technology instead of a real human – with brands is they are too impersonal.”
The future of AI in marketing depends on smart investments
Implemented correctly, AI will offer us tools that make our work better, easier, and more enjoyable. Marketers will be able to focus on the strategic, creative elements of their work and leave the tedious and time-consuming tasks to a well-trained machine.
All of this, though, depends on marketers educating themselves so that they can help their organizations invest in smart solutions. As AI evolves at a rapid pace, marketers will face increasing pressure to keep up.a