Why To Invest In Digital Marketing
With The Way The World Has Changed And Has Become Increasingly Digitized, Digital Marketing Is Driving Growth And Revenue Like Never Before
- With a CAGR of 17.6% from now until 2025, the entire digital marketing landscape is increasingly important and popular as the world is becoming more dependent on tech1.
- Of the 4.57 billion global internet users, about 3.96 billion are active on social media. Digital marketing reaches people where they spend their time and money, regardless of location.
- Of these 3.96 billion active social media users, 3.91 billion are active on mobile devices. Mobile advertising spend in Q2 2020 increased globally by 71% over Q2 2019, and increased by 8% since Q1 2020.
- Digital marketing is more customizable, individualized, and easier to measure.
- For every $1 spent on Google ads, businesses make an average of $2 in revenue.
- PPC ads can boost brand awareness by up to 46% and 64% of consumers will click on a Google ad when they are looking to buy items online.
- Email marketing is the oldest form of digital marketing, yet has a median ROI of 122%-four times higher than any other digital marketing channel.
The world was already changing pre-pandemic. Globally, people were already becoming increasingly digitized through the increased dependency of the internet, the adoption of smartphones and mobile devices, and the increased usage of social media. Now, with COVID-19, the world has never been more dependent on technology and innovation than it is today. Businesses always need to adapt and pivot to keep up with technology and customer behavior trends. However, with COVID, our world was truly turned upside down. Businesses had to shift and adapt their strategies literally overnight. All means of doing business face-to-face unprecedentedly disappeared in totality.
2020’s circumstances forced businesses to think on the fly and adjust to not only stay relevant and functional, but to survive. With the way the world was already changing pre-pandemic, businesses with a strong digital marketing strategy were already ahead of the curve and well positioned. The most successful businesses understood that with digital marketing, they could better adapt to the evolving ways that people communicate, shop, and consume media. These same businesses, once the pandemic hit, were better positioned to not only survive, but thrive. In fact, according to a Deloitte report, digital sales eclipsed holiday sales during the start of COVID, and grew by 18% in Q1 2020 compared to Q1 20192. Traffic also grew by 13% in Q1 2020 compared to Q1 2019. From this traffic, the share coming from social media was 8% in Q1 2020 compared to 6% in Q1 2019.
COVID has only sped up the inevitable further digitization of our world. Businesses now more than ever need to invest in digital marketing, and adopt a digital marketing strategy for several reasons. Digital marketing reaches people where they spend their time and money, regardless of distance and location. Digital marketing is easier to customize and individualize, and target specific audiences. For businesses, it is also easier to track and measure. Furthermore, digital marketing is more cost effective than traditional marketing, and also has a higher ROI.
With an investment into a comprehensive digital marketing strategy, businesses can expect to significantly grow their revenue. With a CAGR of 17.6% from now until 2025, the entire digital marketing industry is becoming increasingly important and adopted. Furthermore, according to Accenture, since 2017 B2B digital commerce revenues have almost doubled, accounting for around half of all B2B revenues3. With digital marketing tactics such as content marketing, social media marketing, native ads, SMS/email marketing, push notifications, ticker tagging, influencer marketing, and retargeting, business can grow through investing in an all encompassing digital strategy.
Everyone is always talking about content marketing- but what is it exactly? Content marketing is defined as a marketing strategy that focuses on creating, publishing, and distributing relevant, consistent, and targeted content. This is a long-term approach to marketing that focuses on building a strong relationship with an audience by giving them high-quality, consistent, and personalized content that aims to eventually drive sales. This method of digital marketing is popular with companies to create brand awareness, and attract and retain loyal customer bases. Content marketing is all about storytelling, and shows customers that you actually care about them. Content marketing techniques can include anything from images, infographics, videos, and GIFS, to tweets, blog posts, and newsletters.
In a 2018 survey for “most effective digital marketing techniques,” content marketing came in at number 1 as the most effective technique- and it was not close either4. 1 out 5 respondents said that content marketing was the most effective, while AI and big data came in tied at number 2 with only 14% of respondents.
Furthermore, according to another global survey, as of 2019, over 90 percent of companies were using content marketing as part of their overall marketing strategy5. This same study also revealed that nearly half of the respondents estimated that they spent less than $10,000 USD on content marketing- a budget that shows how much more cost effective content marketing is compared to other forms of advertising. In North America alone, between 30 to 40% of B2B and B2C marketers planned to increase their content marketing budgets in 2020 and had a documented content marketing strategy.
In another survey conducted in May 2019, 60% of global marketing professionals that were questioned believed that research and case studies were most valued and trusted by their target audiences, while 34% said the same about photos and infographics. However, these means of content marketing are far from the most popular and engaging.
Out of all content marketing techniques, the usage of visuals has been shown to be the most widespread, organic, and engaging. In 2019, photo and video ads were listed as the most effective advertising formats on social media platforms like Instagram, YouTube, and Facebook by marketing professionals.
The numbers don’t lie. With over a billion users, YouTube is considered to be the second most popular search engine next to Google. On YouTube alone, 1.57 billion YouTube users will watch about 5 billion videos every day. But this doesn’t even include the entire internet base. Throughout the entire internet, users watch over 500 million hours of videos on a daily basis6.
But this only talks about how widespread video consumption is on the internet. When the statistics show how video can boost engagement and sales, it becomes evident how crucial a video content strategy is for content marketing. Recent studies have shown that 85% of consumers are more likely to purchase a product after watching a video about it, 46% of users act after viewing a video ad, and when you combine video with full-page ads, you can boost engagement by 22%7. Furthermore, 80% of consumers will remember a video ad they viewed in the past 30 days, 64% of online consumers have reported that watching a Facebook video has influenced them to make a purchase, and as a result, ecommerce sellers that use product videos can increase product purchases by 144%.
The numbers show that consumers prefer video content to just simple text ads. Video content better explains product information and promotes sales as they tend to be more eye-catching and engaging. Users clearly retain more information when they watch a video as opposed to simply reading text. Conversion rates through video content are also clearly growing and driving sales as well.
Native advertising is a very unheralded digital marketing tactic, and a perfect component to a well rounded digital marketing strategy. Native ads are ads that use paid ads to match the look, feel, and function of the media format in which they appear. These ads are effective, because these are simply ads that do not look like ads. These ads often are found in social media feeds, or as recommended content on a web page. While video content marketing stimulates engagement, and is the low hanging fruit when it comes to digital marketing and reaching people, there are drawbacks as well. According to a July 2019 survey, internet users in the US found that video ads that play automatically on websites- both with sound and without sound- were the most annoying types of digital ads (and by a considerable margin too).16
Native ads are a good addition to a comprehensive digital marketing strategy, because this method of digital advertising targets users that simply have tuned out internet ads, or don’t trust them. Most consumers, in fact, will likely identify native advertising as an article instead of an ad. In fact, 80% of adults in North America have some form of ad blocking software. However, publishing ad content that seamlessly integrates within a consumer’s typical feed will reach these consumers more than an ad will- figuratively and literally. In fact, viewers spend nearly the same amount of time reading editorial content and native ads-2 seconds and 1 second, respectively. Furthermore, according to a study by digital marketing company Outbrain, 70% of individuals want to learn about products through content rather than through traditional ads, people view native ads 53% more than banner ads, and native ads increase purchase intent by 18%17. Native ads also have a click through rate (CTR) 40 times higher than that of classic display ads.
Companies are beginning to catch on. Since 2016, in the US alone, native ad spending has increased from $16.68 billion to $52.75 billion18. Three out of four publishers also offer some form of native advertising on their sites, 90% of publishers either have or plan to launch native advertising campaigns, and 41% of brands are currently using native advertising as part of wider promotional efforts19
Native ads have also been shown to have a strong ROI. For every $1 spent on Google Ads businesses make an average of $2 in revenue, for example. PPC ads can also boost brand awareness by up to 46%.
Of all the different methods and techniques that can be used for digital marketing, email marketing is the oldest, yet most tried and true method. Email marketing has been around since the start of the internet, and refers to the usage of email to promote products or services. Email marketing can also be used to develop and strengthen relations with current customers, while reaching out to potential customers as well. This digital marketing tactic also allows businesses to customize their messages and keep their customers informed.
While this digital marketing method is not as fashionable nowadays as social media or content marketing, it is still very widely used. In fact, 9 out of 10 marketers use email marketing, and 81% of small businesses still rely on email as their primary customer acquisition channel, and 80% for retention20. But most importantly, this form of digital marketing is preferred by customers. In fact, 51% of US consumers said that the way they most preferred to be contacted by brands was through email21, including 73% of millennials22. 59% of consumers also say that marketing emails influence their purchase decisions23.
The most important things to understand when crafting an effective email marketing campaign, are to be welcoming, be personalized, and be interactive. You only get one shot with an amazing welcome email as the open rate for a welcome email is 82% as opposed to 21% for an average email24. Personalized emails also have an open rate 50% higher than an impersonal email. Emails with some kind of interactive content also have a 300% higher click through rate.
Email marketing is also by far the most cost-effective and conversion-rich form of digital marketing. Email marketing has a median ROI of 122% in fact-four times higher than any other digital marketing channel25. Additionally, according to Constant Contact, for every $1 a company spends on email marketing, they can expect to earn an average revenue of $38. An eMarketer survey also revealed that email marketing drives 25% of the total revenue from surveyed companies. But what has been shown to drive the most revenue are segmented email campaigns, which according to statistics, can drive as much of a 760% increase in revenue26.
Another reason why email marketing is very effective is because more and more people are using their phones as email devices nowadays. In fact, as of 2018, Apple iPhone and iPad together had over 1/3 of the global email client market share27. But just think how many people have phones that don’t use email. The number of smartphone users worldwide today is over 3 billion. But research shows that as many as 50% of mobile phone users don’t own a smartphone at all. There were 7.9 billion mobile subscriptions worldwide as of 2019, with an estimated minimum of around 5 billion people owning some kind of mobile device that can send and receive SMS messages. Regardless of what type of phone someone has, SMS reaches virtually everyone. In fact, on average, 23 billion text messages are sent daily-or 270,000 per second28. Therefore, an even more effective way to reach people on their mobile devices is through SMS marketing.
SMS marketing is also known as text message marketing. This digital marketing tactic is a simple method where businesses send out specials, coupons, promotions, alerts, and highly targeted permission-based “opt-in” texts.
The numbers of SMS marketing’s effectiveness are staggering. SMS messages have a 98% open rate, for one, with 90% of these messages are read within 3 minutes29. SMS also has a 209% higher response rate than phone, email, or Facebook marketing means, with customers redeeming SMS-delivered coupons 10 times more than other types of coupon.
But what makes this such an effective form of digital marketing? People are always on their phones and actually like the messages! The average American checks their phone 47 times a day, for example 30. But compared to other forms of marketing, customers actually opt in and act on SMS texts. 48.7 million people this year are projected to choose to opt-in to business SMS messages, with 59% saying that a promotional SMS led them to visit a store in person or online31.
The usage of push notifications is another very effective method of digital marketing, that is uniquely catered towards smartphone users. Remember- although not everyone has a smartphone, 3 billion people as of today have one, with this number forecasted to grow by the hundreds and thousands year after year.
Push notification marketing is a strategy where businesses, or apps, inform and update their customer base about services, products, and promotions via notifications on their home screen on an array of devices. Using this tactic can be very beneficial, because a minimum of 52% of smartphone users have push enabled on their devices. By utilizing push notifications, businesses can direct users to social media channels, promote products, build trust and brand reputation, and engage and inform users.
While push notifications are a more supplemental tactic than a standalone tactic, they can help connect all of your digital marketing tactics, and be an important piece of your comprehensive strategy. A push notification can drive your customer to a promotional email, your social media page, or app for example. The average US smartphone user receives 46 push notifications per day, with an overall opt-in rate at 53.3% across all devices. Opt-in rates are much higher on Android devices (91.1%) than iOS (43.9%), simply because iOS users have to actively opt-in, while Android users are automatically enrolled.
Even more so than other methods of digital marketing, push notifications need to be used very carefully. Emojis (20%), rich formats (25%), tailored send times (40%), advanced targeting (3x), and personalisation (4x) can all improve reaction rates, while
basic personalisation can improve open rates by 9%32. But there is a reason why push notifications are complementary rather than foundational. If they are overdone, people will get annoyed and tune them out. One push notification per week can lead to 10% of users disabling notifications, and 6% to disable the apps, while 31% of users do not like to find push notifications helpful at all as opposed to only 18% that always find them useful33.
Ticker tagging is a very interesting digital marketing tactic specifically geared towards publicly traded companies. If there is a publicly traded company looking to generate buzz, and put their content in front of the faces of major shareholders of competitors-especially once they release news-the best way to do this is through targeting these company peers or competitors via their stock tickers. For example, if a company is a little known energy company, they would want to tag their peers through company name and ticker- for example Chevron (NYSE: CVX), Exxon Mobil (NYSE: XOM), and Valero (NYSE: VLO). If a company is involved in pharmaceuticals or biotech? Companies such as Gilead Sciences (NASDAQ: GILD), Pfizer (NYSE: PFE) or Eli Lilly (NYSE: LLY), for example.
Influencer marketing is a method of digital marketing that involves endorsements and product placements from influencers. Influencers, while usually celebrities, can also include people and organizations that have some sort of finite knowledge, expertise, or social influence. What was once an obscure fad led by internet celebrities, has now grown into a full fledged form of digital marketing used by the biggest brand names and biggest celebrities. Just look at how Kylie Jenner for example was able to grow HER OWN brand into a billion dollar business- by being HER OWN influencer.
Companies are certainly catching on. While 61% of marketers consider finding relevant influencers for a campaign difficult, the costs for an influencer post throughout the last five years has risen all across platforms. Between 2014 and 2019, YouTube’s cost per post started at $400 per post in 2014 and rose to around $6,700 per post in 2019, while Instagram posts grew consistently from $134 a post in 2014 to $1,600 in 201934. This increase in influencer marketing budgets directly mirrors the decrease in print advertising budgets. But this isn’t even the peak. 63% of companies intend to increase their influencer marketing budget within the next year35.
While hiring influencers is not always cheap, as the likes of Kylie Jenner can make over $1 million per sponsored Instagram post, and Cristiano Ronaldo can make over $975,000 for each sponsored Instagram post, companies are certainly seeing the value and buzz that these names alone can create. On average, a business makes $5.20 per every $1 of influencer budget, while the top 13% make $20 or more, and only the bottom 25% failing to generate any revenue.
Beyond big name celebrities, bloggers and Instagram/YouTube celebrities are now getting an increasing amount of work as influence marketers. Department store chains now partner with fashion bloggers, and YouTube influencers can earn millions from their videos, for example. In fact, micro-influencers, or ordinary people who have built up a solid social media following of between 1,000 and 100,000 followers, perform nearly 90% of influencer marketing campaigns36.
Retargeting, which is also known as behavioral retargeting, or remarketing, is a form of online advertising that targets consumers based on their previous internet actions. Only about 2% of web traffic converts on the first visit. But through retargeting, consumers can still be exposed to a brand or business even after leaving a website.
The numbers show how effective retargeting can truly be, and how cost effective it can be as a crucial component for your digital marketing strategy. While CTRs and conversions naturally drop through time with typical display ads, the CTR rate actually increases by 10 times for retargeting ads, with a conversion rate nearly twice as high. Because of this CTR and conversion rate compared to typical digital advertising, retargeting ad clicks cost anywhere from twice to 100 times less- a very attractive ROI37.
Retargeting is also the best display advertising strategy when increasing brand awareness. A recent study which compared six different online display advertising, found that retargeting had the highest increase in brand-related search queries at 1,046%38.
As the world continues to advance and adapt to these unprecedented times, digital marketing is improving with the advancement of technology, and becoming increasingly important. Through investing in and adopting a comprehensive digital marketing strategy, companies will adapt to customer behaviors, and strengthen their position in 2020. The facts and statistics of each aforementioned digital marketing tactic show the pros and cons of each tactic, and why it is so important to have a well rounded, comprehensive strategy. These statistics also show how truly effective each tactic is when not only used individually and situationally, but also concurrently with one another. By investing in a comprehensive well rounded digital strategy, businesses can reach an enormous audience in a way that is both cost-effective and measurable, and customizable and individualized. With these techniques, companies can get to know their audience better and more intimately, and create brand loyalty. It is for all of these reasons that it is crucial to invest in digital marketing.