It is not news to Belardi Wong that for many brands the marketing mix is shifting — we’re seeing an increase in spending and testing in more traditional channels (like direct mail!) from emerging or digitally-native brands. But what is happening on the digital side that is causing this shift?
1. Facebook and Instagram are becoming more expensive as more and more brands advertise here.
- As this Modern Retail article explains “The more brands that advertise on Facebook and Google, the more expensive the advertising costs get. According to an analysis of its Facebook impressions data by marketing software company Adstage, the median cost-per-click for Facebook News Feed ads has risen from $0.43 during the second quarter of 2018, to $0.64 during the second quarter of 2019, for example.” Essentially more brands and advertisers such as political campaigns are competing for the same impressions, forcing up the cost per click.
- To exacerbate the problem social media usage is slowing. As Mary Meeker’s internet report showed “social media usage is up just 1% from 2018 to 2019”
- More demand from advertisers for ad space + smaller or flat supply of impressions = higher costs per clicks
2. Due to increased competition and a flooded ad market, a brand must have an iron-clad strategy, not just pretty pictures and money to spend. With costs increasing it is easy to burn through a marketing budget quickly and un-profitably unless a brand is strategic in the audiences they target, integrating their audiences across email and paid social and building a campaign around where the customer is in the marketing funnel (awareness vs. consideration vs. retargeting) is essential.Via Marketing Land.
3. Other digital platforms are emerging such as Pinterest, YouTube, TikTok, Amazon and retailers who are building out their own ad networks. With Google, Apple and Facebook creating stricter privacy policies on user data (making potential customers harder to track) brands are more eager to test on new platforms that provide contextual data (e.g., what a user is actually shopping for). These platforms are still proving themselves in terms of reporting and driving strong customer acquisition.
So what does this mean for our clients, especially emerging brands? They’re looking for cost-effective, on-brand ways to spend their marketing dollars across more channels. The risk is that marketing starts to become inconsistent across the channels as complexity grows. It’s rare that a business can be grown solely online. Stores, direct mail, wholesale are all coming back into the conversation and strategy.
Interesting podcasts worth listening to:
- FaZe Clan CEO on Digiday Podcast: Gaming culture is here, real and a potential opportunity for brands if that can get it right. If you want to start to understand what this gaming phenomenon is all about, this podcast is a really interesting listen.
- Atlantic Reported on Digiday Podcast gives an overview of TikTok: Another great listen to start to understand what TikTok is and why/how people use it. Coupled with the fact that TikTok is starting to run ads, it will be an interesting platform to watch.
- Iris Nova founder on Modern Retail Podcast: Listen to the first ten minutes of this podcast (the rest is good, too!) for some very up to date analysis on Casper and DTC.