How Much Should Small Businesses Spend on Digital Marketing in 2017?

While working hard on my teams recommendations to our assigned company, I came across this article that has helped me put into perspective how difficult and important marketing is to a startup. For large companies digital is taking 35% of marketing budgets, for a small startup strapped for cash, this 35% might not mean much. However, the high ROI and potentially low cost is worth a second look for startups.

According to GetResponse, 70 percent of small to medium sized businesses said they will increase their digital/web-based marketing budgets this year. 

That makes total sense when you think the impact a well placed display ad, or viral video can increase brand and ultimately lead to traffic and sales. During our email lecture, we learned how that channel was one of the best, in the article spending is focused on email campaigns and now mobile as well.The article goes on to suggest that a small company spend between 4% to 12% of its revenues on digital marketing. Mobile is becoming a hot space as more and more people carry mobile devices and consume content via their mobiles.

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Digital marketing on the rise in India

I am currently visiting India and thought it would be interesting to see what small and medium businesses in India do for marketing. I was surprised to find that digital marketing has been rapidly increasing in India. According to Morgan Stanley, India’s digital marketing industry has grown 33% annually between 2010 and 2015 and consumption of online video content has grown almost 20% in just 1 year. Content has become an important tool for digital marketing. Small and medium businesses that traditionally relied on local advertisement, newspaper, billboards and word of mouth, are now implementing digital marketing strategies and are increasingly leveraging social media – Google, Facebook and Twitter – as part of the digital marketing strategy.

One of India’s leading digital marketing training companies outlines the following 7 steps to build a comprehensive digital marketing strategy for small and medium business

1.       Define goals & metrics and identify tools to measure success

2.       Research target audience to identify relevant channels

3.       Create content that addresses buyer persona pain points

4.       Build a content library for various channels

5.       Allocate a paid advertising budget

6.       Create a timeline and an action plan

7.       Evaluate results and improve your strategy

I see plenty of evidence that small and medium businesses in India are implementing a digital strategy, which was non-existent not too long ago

AdTech VS. MarTech: Global Consultancies Are Buying Up Agencies

I've read an article talking about how global consultancies are buying up agencies and taking more and more business from agencies.

Behind the battle between digital agencies and consultancies is the battle between Advertising technology and Marketing technology. AdTech is more about how to deliver messages to the consumers, it's media-based. While MarTech is more focused on selling software on a subscription basis to build a relationship with customers that lead to long-term success, which is often more attractive to investors because it’s less exposed to fluctuations in ad spending and other market dynamics, according to a WSJ article. The line between AdTech and MarTech is blurring nowadays. However, while MarTech is having an advantage over AdTech among investors, I think it would be interesting to share this article for us to know more about what are global consultancies doing. Here is the article link:
Global Consultancies Are Buying Up Agencies and Reshaping the Brand Marketing World

Peer Reviews in Retail

There has been an incredible amount of conversation around the death of brick and mortar retail with sales moving online.  This, of course, is true with more consumers preferring to purchase items through Amazon and other e-retailers.  What has been less publicized is the importance of social media's impact on buying behaviors and retail preferences.  Individuals in the digital age are more likely to trust peer reviews, Yelp for instance, than traditional media sources.  This makes it increasingly important for retailers to ensure their presence on social media has a positive influence.


https://hbr.org/2016/11/84-of-b2b-sales-start-with-a-referral-not-a-salesperson

Google Redesigns its Mobile App

While the article itself does not mention how this will affect Google's digital marketing ability, I think the insight here is how Google's small adjustments to access to information will increase Google's ability to retain customer focus and identify more information about users.

Everything Google is consolidating within it's mobile web access is currently available, the difference is the platform and ease through which 'googlers' can access this information. This change not only encourages users to use Google but to stay on this platform for additional searches and information. As a result, this increases the ability of Google to capture user data and leverage that information with advertisers.

https://techcrunch.com/2017/03/21/google-redesigns-its-mobile-app-and-website-with-tappable-search-shortcuts/

4G to 5G: Predictions for a Faster, Cheaper Data Landscape

Spectrum/Time Warner came to my apartment this week and upgraded my high speed internet from 4G speeds to 5G speeds. By 2020, it’s expected that the standard for mobile data speeds will be 5G. Additionally, I changed my Verizon phone plan last month to unlimited data because it finally made financial sense. Data is becoming faster and cheaper, and here are a few predictions on what that means for the digital marketing landscape:

1)    It’s all about video – Bigger screens and fast cheap data will mean that video will be easier to deploy and accessible to consume. It’s far more engaging to begin with, and now advertisers will benefit by being able to distribute video assets even further.

2)    Cord cutting will become more viable – consumers, once accessing “cable” television on mobile will be feasible and easy, will start to explore a la carte programming, ie buying channels on one off bases rather than in bundled cable packages. The watershed moment for traditional cable television to finally dissolve may finally be near.

3)    The “internet of things” will lurk closer - Requiring cheapier and easier set up costs, internet-connected “smart” gadgets will start to proliferate. Right now the fodder of the tech savvy, mass adoption will begin once ultra high speed internet is further commodified.

4)    Digital commerce will expand – With internet connection even more reliable, faster, and more functional, users will continue to become more idea with mobile purchases, which will expand share significantly since most e-commerce consumption currently happens on desktop.

Will Reality Ads and UGC Destory Brand Reputation ?

"It takes many good deeds to build a good reputation and only one to lose it."-Benjamin Franklin

The rise of reality ads, a new style of communication created by engaged consumers equipped with smartphone cameras rather than ad agencies with million dollar budgets, forces brand to re-examine the way they market themselves.

Whether this new form of communication relies on hidden cameras, or real consumers voluntarily speaking their mind, it is gradually replacing traditional, slick persuasion with honesty, spontaneity, and authenticity.

Today, we can get any answers we want in a few clicks. But when it comes to brands, the answers we trust are mainly from consumer reviews.

Getting the straight answers from real buyers is a great thing. But are the reviews trustworthy? According to the Harvard Business School study, it is estimated that up to 20 percent of Yelp reviews are fake. However, we cannot say that all fake reviews are intentionally duplicitous. Technically, we all are fakester, have you ever given a classmate or college an overly generous endorsement on LinkedIn, or raved about your author friend’s book on social media after reading just several pages? You probably wouldn’t think of it as reprehensive, even though you’re messing with the honor system.


In summary, the rise of technology and social sharing has created a new phenomenon in the brand world, and twisting the power of honesty and ‘real’ to sell product will create some serious brand reputation carnage.

Reining in Google's Run-of-Site Advertising

Google has come under some pressure recently as its run-of-site advertising model has placed ads in front of extremist video's on its Youtube platform. This problem for Google comes on top of other issues they have been facing recently, including requests by brands and agencies to have a clearer picture into metrics and performance.

While Google can refine their screening processes, the recent media attention seems to be highlighting a greater shift in the market. Not only will Google have to come up with better ways to screen videos for inappropriate content, they will also need to manage ad placements for "fake news". There seems to be a slight shift in power in an industry where Google, Facebook etc. had a seemingly never ending supply of content on which to advertise and little oversight.

Are all of these news stories pointing to a shift that could slowly be impacting Google and Facebook's reign? To my eye there is definitely a shift underway as improved analytics will show less of a correlation between ads and sales. Run-of-site opportunities will inevitably be reined in as increased vetting and metric tracking occurs and ultimately, the pendulum is going to start swinging away from Google.

Google Home Tests The Waters With Voice Ads

Last week's WSJ had an interesting piece on how Google Home recently tested the waters with a voice promotion for Walt Disney's new Beauty and the Beast movie. With the consumer's ad tolerance in mind, its clear that Google is seeking new ways to monetize its new Google Home search platform via voice interactions with users.

The article stated how the reaction so far has been mixed, with some saying that "Advertising on the device would really ruin the experience."  The more interesting part is that Google claims this wasn't an ad, but rather a "partnership" with Disney, as Disney didn’t pay Google for the alleged promotion. However, this may just be Google's way to first show proof of concept before rolling out a similar paid service.  Historically this has been the case, with the company typically trying to make products popular before profitable. Going forward, Google will need to find a delicate balance between testing this new potential revenue stream and making sure the ads dont come off as intrusive.

https://www.wsj.com/articles/google-tests-waters-of-voice-ads-on-speaker-1489710193

Original Programming is a Bad Sign for SNAP

Digiday reported this week that Snapchat is pitching original shows to advertisers, which the newly IPO'd company will sell ads and sponsorships against. The article positions Snapchat in a favorable light, saying that “advertisers are listening” and that “presented by” sponsorships are selling for low 6 figures. Despite the positive coverage, the fact that Snapchat is moving into original programming is a bad sign, especially for the bulls who liken Snapchat to Facebook and Google and are driving the valuation as such. The stock has plummeted since my most recent call, and will continue to do so.

Rolling out a product like original programming is a move toward being a publisher, rather than a social medium. Snapchat is moving more in the direction of Twitter ($11b valuation) and even a digital content company like The NYT ($2b valuation), rather than a company that rolls out highly automated ad product based on user data (rather than programming). Facebook and Google have skyrocketed by implementing systems that collect troves of data, and deploy automated advertising leveraging that data. Snapchat seems less intent on achieving that business model than bolstering its publisher platform, with this recent move. It seems as though they are shying away from newfound competition from Instagram (stories), and disappearing messaging from Facebook, and differentiating by producing original content.

Having witnessed the challenges of monetizing digital content, whether by selling the rights to read it, the content itself, or advertising against the content, I’m wincing at these types of moves by Snapchat, and remain convinced that its stock is significantly overvalued.

http://digiday.com/media/snapchats-pitching-its-shows-to-advertisers-and-theyre-listening/

YouTube TV

At the end of February, YouTube unveiled YouTube TV, its live streaming service, which is being offered at only $35/month for basic accounts and with no long-term contract required. It is only launching in markets where it can offer full, live local broadcast feeds, like L.A., New York and Philadelphia to start, but YouTube has developed relationships to offer the majority of networks offered to cable subscribers now.


If YouTube is able to launch without significant technical issues, this will be a very attractive service to existing cable customers, Dish Network Sling customers, and more. And with more customers, this will be the next movement of TV ad spending, especially with the expected ability to serve up dynamic ads to a much more targeted audience than traditional TV.


Advertisers expect that ad formats will not change in the next few years, however, and will remain in traditional TV ad formats. The more immediate difference, and DirectTV is close to this, is the ability to serve up real-time, current ads to customers using playback or DVR versus recorded ads from when the program was recorded.


As interesting as dynamic ads and improved targeting is for advertisers, right now the Virtual Pay-TV marketplace is only 2M subscribers. Small potatoes compared to the overall market of ~94M Pay TV subscribers. For advertisers targeting millennials and other early tech adopters though, this is an area to watch.