Businesses are more digitally aware – so why is marketing waste still so high?
The technology sector’s impact on the digital marketing industry has in the last 10 years dramatically altered how brands engage with consumers. Marketing and advertising spend has continued to skyrocket, with global spend for 2016 set to surpass expectations by growing by 4.4% to $548.2 billion. At the same time, digital marketing understanding has grown. New tools for greater automation continue to emerge. First it was cookies and now we’re seeing highly complex targeted data engines.
Despite this however, advertising is still as ineffective as it has been previously, with waste figures continuing to be high. Research by Lumen earlier this year revealed that just 36% of digital ads received any views at all, and just 9% of these enjoyed more than a second of attention. Data by Meetrics suggests that UK marketers waste up to £7.2 billion on unseen ads every year.
The tragedy of this is that businesses are supposed to be more digitally aware. We’ve reached a point in terms of tech innovation where automation, personalisation and business intelligence is so high that there should be little excuse for not being able to ensure more than half of your marketing spend is doing something useful. My concern is that marketers in general might be at risk of being too insular with their approach and understanding.
One of the greatest tools available to marketers today is competitor intelligence - particularly in search marketing: I’ve built a successful business around the idea. Understand your competitors and you understand your market, but how many are actually doing this? In the search space, too much marketing spend is being wasted by companies who don’t realise that their ads are consistently at the very bottom of the search engine results page.
The number one aim for marketers must be to get their ads in front of consumers. Doing so requires an understanding of who your target customers are, how they like to be engaged with and how to out manoeuvre your competitors to reach them. Each of these are reliant on a form of data input, but with today’s technology, this whole market and customer view is not that difficult to achieve.
The challenge for marketers once they’ve identified targets and how best to approach them is then ensuring more money isn’t wasted. At this stage, outmaneuvering competitors is key. Few realise that much marketing spend is wasted by simply paying too much to reach customers. To use the search example again, if you’re competing on the same keywords as multiple competitors your customer acquisition costs are going to be high.
In my role, working with brands on their search marketing strategies, we consistently see a race to the top, in which brands attempt to dominate keyword searches by consistently trying to outspend one another. In this environment, the only winner is Google. As a result, marketers need to better understand their own market landscape, and employ a marketing strategy to exploit routes to customers that others are not already using.
Reducing marketing waste is not simply a question of better targeting of customers, it’s better intelligent targeting of customers. Ultimately if you know a lot of your customers shop at the biggest national supermarket, you don’t just advertise there, you look for other ways to engage as well. The same principle must be applied to digital. Don’t waste marketing spend by failing to utilise available technology to properly target individual prospects, nor by using exactly the same methods as others engaging in a price war. In short, being more digitally aware should mean marketing waste is low, but only when competitive intelligence is used to make clever business decisions.