Digital Advertising

With only a few weeks until the New Year, it is time for marketers to review what worked last year and to plan where to spend marketing dollars for the best results in 2016. Marketers also need to be ready for the new challenges that technology will bring. We combined data from multiple surveys to help marketers determine the budgets and channels they need to focus on in preparation for the changes the new year will bring in customer behavior.

Marketing Trend Predictions for 2016-2017

Most companies budget between 7 and 9% of their revenue for marketing.[1]

Data from the CMO Report
This chart shows the total marketing budget including staff salary, customer relationship management, agency or consulting costs, advertising costs, media spend, content creation, website, etc.

  • Most companies will allocate 30% of their marketing budget to digital and this is expected to grow to 35% by 2019. Newspaper and Magazine ad spend will account for 20% and Television will account for 38% of marketing dollars in 2016, with the rest of advertising dollars going to radio and other media.[2]
  • By 2017 desktop internet ads will account for 19% of global adspend while mobile internet ads will account for 15.0% in 2017.[3]

The top 5 marketing channels in 2016 will be Website, eMail, Social Media, and SEO and Paid Search.[4]

econsultancymarketingsurvey2015

  • eMail marketing still offers returns of $44 for every $1 spent.[10]
  • Mobile marketing continues to grow and smart phones are used more and more for browsing, communicating and purchasing.

78% of US marketing professionals felt that PPC advertising worked well in 2015.[5] The best ads were Text, Remarketing, and Mobile.[6]

emarketerppcsurvey2015

 

That said, display and banner ads were not nearly as effective in 2016 due to ad blocking. The majority of internet users ages 18 to 34 block ads with ad blocking software.[6]emarketeradblocker2015

How to Plan Your Marketing Budget for 2016

  1.  Make Sure Your Marketing Messages are “Mobile First”

There have been many statistics published about how important mobile devices have become.  Google rolled out a mobile update earlier this year that penalized sites that were not responsive or mobile friendly.  The PC market is tanking, and the world is using their smart phones and tablets to do all the tasks it used to do on computers.  US marketers are very aware that they should have a “Mobile First” strategy, however most are not acting upon it quickly.  In fact, one survey showed that 51% of marketing executives are not yet building a mobile-first environment.[6]  Adopting a “mobile first” marketing strategy will pay dividends in 2016.

emareketermobilefirst2015

 

  • Brands need to make sure that their websites work they way they want them to on mobile devices.  Consumers are beginning to use voice activated search on all their connected devices like cars, TVs, phones, tablets and smart devices, according to Google.

googlesearch2015

  • Mobile payments are also expected take off in 2016, with as much as a 62% increase (to 37.5 million users) specifically paying for things with a mobile phone.[6]  The dollar amount associated with the average mobile purchase will also increase begin to include more expensive items as people become more accustomed to paying with their mobile wallets. Businesses should offer coupons, apps and specials for people who pay with mobile wallets, because the intimacy of the phone tends to deepen personal relationships with customers.
  • In addition the majority of emails were opened on mobile devices for the first time in 2015. Now more than ever before, marketers need to optimize their emails so that they appear correctly on the most popular mobile browsers.

Mobile commerce is now 30% of all overall commerce sales, and these numbers are expected to increase in 2016. The larger phone screens make browsing easier, and therefore mobile conversions have been going up. Mobile payments, in-app purchases, and social media buy buttons all help to increase mobile commerce

2.   Personalize the Customer Experience

According to a survey of 2,363 companies, more than 50% of marketers feel that they can differentiate themselves in 2016 through a better customer experience.[7] They also feel that using price as the primary differentiation method will not work. To create a more harmonious customer experience, companies are pulling together data, mobile and content, and sometimes even shifting the corporate culture so that the customer is “first”. They are implementing “personalization”, trying to make the experience as valuable as possible, and consistent across marketing channels. Companies are also spending money on making the user experience safe, fun and fast, especially on mobile devices.

 

dirrentiationsurvey2015

3. Continue to Use Content Marketing 

Content marketing was the biggest spend trend in 2015, and it was effective. But although the Internet is flooded with thousands of articles, infographics and videos, a survey showed that about 74% of companies thought that content marketing was effective in 2015.[8]

Data from The CMO Report

The same survey showed that the average marketing budget is 28% content marketing, and that 51% of companies are going to increase the budget for content marketing in 2016. Additionally, 76% of companies will produce MORE content in 2016 than they did last year. So the trick here is to find the right types of content and the right ways to get your interesting content in front of your customers, in order to get your work seen in the sea of material that is the internet.

 

4. Collaborate to Promote Content

We’ve already said that there will be more content from more sources. Competition for the consumer’s attention will be fierce. One proven way to ensure your audience sees your content is to collaborate with influencers and other vertical markets to share your content with their audiences.  As long as the partnership is clearly disclosed, collaboration can be very effective. Marketers can reach potential customers by using another brand’s audience on social networks by partnering with them to show content. The partnership can be mutual postings of each other’s content, sponsored posts, or the brand can pay the influencer to post the content.

5. Build Your Own Network

Brands should consider creating and promoting self-owned publication channels to build their own audiences, rather than rely on third-party platforms to deliver visitors to their commercial sites. Some of these brand-owned channels will be indistinguishable from independent channels. A few independent online publications will be bought by brands who can’t be bothered building their own audience from scratch.

 6. Pay for sponsored posts on social networks, particularly Facebook.

Facebook has mad a lot of changes to keep followers logged into Facebook by refining search, making videos appear and start playing in the feed, and creating buy buttons.  It’s important for most B2C companies to use Facebook, but posts made by brands only show to 16% of the brand’s total audience.[9] The same can be said for other social networks. However, social media sites guarantee to show content if it is sponsored content, which means that sponsored content is an easy way to reach communities and groups.

One reason for the focus on Facebook by B2C companies is that Facebook is predicted to become nearly entirely mobile in the near future.[6] This may reflect more users in emerging markets, rather than all users, but it still illustrates that businesses need to think about Facebook ad formats and content specific for mobile. To that end, Facebook has created a few media platforms to help marketers:

  • Facebook Messenger allows marketers to join in conversations. They can have a voice in one-to-one communications, but most brands have trouble injecting into a conversation. They have found that interruptive ads do not work as well as news apps, sponsored stickers or emojis, or customer service apps.
  • According to eMarketer, advertisers have adopted Facebook video, but they still like YouTube. Overall, digital video ad spending will increase by 42% in 2016. Marketers are using Facebook to get a big bump in awareness and spreading a message virally, and they are using Youtube as a repository of videos, where users will view many videos from YouTube.

 7. Ask for more data from your customers in return for a better experience.

The “Internet of things” encourages customers to give away more and more data, in return for providing them a repository for personal information. Many consumers, especially young consumers, are willing to give up personal information online for convenience and for the value of being connected. Imagine the targeted marketing your business could provide with the amount of personal data available out there. Tapping into that information can be an incredibly valuable resource for an emerging business.

8. Pay Attention to Technical SEO and Reputation Management

In 2016, technical SEO will become even more important because many of the updates like RankBrain, Penguin and Panda are going to be integrated into the main algorithm. Sites that fail Google’s complex technical requirements (like tags and Schema) will suffer and loose rankings and visitors. SEO experts will need to monitor these technical aspects to make sure the website is correctly indexed. As stated above, mobile versions of websites are becoming more and more important, so websites need to be fast, deliver a superb mobile experience, and include voice search functions.  Not every brand can afford this, and this will widen the gap between big companies with big SEO budgets and small and medium size budgets.

Google’s Penguin update (delayed until after the new year) is supposed to degrade the significance of links in the algorithm. Penguin algorithm has not run in over 14 months, and perhaps this is because Google wants to get it right this time, in order to stop the paranoia surrounding links. Companies and publishers fearful of a Google penalty have deemed to avoid linking, which is messing up the validity of the algorithm. Perhaps Google will use something more than linking, something more like a company reputation algorithm to determine ranking.  Factors could include links, mentions, shares, reviews and press.  The algorithm may also scrutinize company executives and subject matter experts.

One thing that is certain is that Google’s algorithm will change, and companies need the technical SEO expertise to monitor and respond to any drops in rankings.  You can see our ideas on a general 2016 marketing budget in this PDF. 2016 Marketing Budget Planning

2016 Digital Marketing Budgets

By presenting data from these credible sources, we hope to help guide you on how much to spend on your 2016 marketing budget as well as how to distribute your available funds.  Creating your 2016-marketing plan can be a challenge with all of the new channels available and the fact that your target audience uses such varied media. Partnering with an experienced marketing consult who understands your marketing objectives can help you avoid wasteful spending in your marketing budget and prepare a brand-centric, multi-channel plan for 2016.

At Boomtown Internet Group, we know you value marketing investments that result in profitable sales. Learn more about how outsourcing some of the marketing work your company plans to our experts in online/digital marketing methods like Content Creation and Inbound Marketing, Web Development, Graphic Design and Data Analytics can help you achieve your sales goals.

 

 

Works Cited:

  1. The CMO Report.org
  2. Forester Research 2016 Digital Marketing Predictions
  3. ZenithOptimedia
  4. Econsultancy and Oracle Marketing Cloud
  5. Hanapin Marketing,
  6. eMarketer
  7. eConsultancy/Adobe
  8. Marketing Profs
  9. Forrester Research
  10. News Max

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