Our guest author analyses the shift in new-age marketing, from impression to impact.
The digital era has altered how businesses market their products to consumers today. The marketers' playing field has seen a massive shake down. This has led to companies altering their strategies to restructure their marketing plans in order to effectively reach out to their customers.
Recent studies indicate that the global digital marketing industry is growing at a CAGR of 17.6% and is projected to be worth more than $930 billion by 2026. With digitisation becoming bigger and the Internet supporting more businesses than ever before, digital marketing is more relevant and crucial today.
As per the Cisco Annual Internet Report, in India, there will be 907.4 million Internet users (64% of population) by 2023, up from 398.2 million (29% of population) in 2018.
In India, digital marketing is growing at a rapid pace. The Indian digital marketing industry is expected to be worth $160 billion by 2025, as per a Goldman Sachs report. According to Global Data, the growth of the Indian e-commerce market will be Rs 7 trillion by 2023, due to COVID.
One of the main factors reshaping the digital marketing industry, is the popularity of social media and other digital marketing platforms. Somewhere in the thick of this, traditional broad-based marketing is gasping for existence.
What is the preferred outcome for marketers - reach or conversion?
Let us start by understanding the difference between traditional and digital media. The main difference is the choice of medium through which an audience receives a marketing message. While traditional marketing uses media like TV ads, magazines, newspapers, radio, billboards, among others, digital marketing uses the Internet and social media.
Reach/conversion is an always-on debate, as both are critical and almost go hand in hand. Assuming that the creatives used are relevant and have high cut through, irrespective of the marketing strategy used, the difference between traditional and digital marketing is that the former guarantees high reach and impact. But it struggles to push consumers beyond awareness in the buying journey, and has the following cons:
● Limited to singular messaging to a large audience, as there are limited high level demographic-based targeting options only
● Generally much higher cost, with no control on returns
● Metrics limited to reach and sometimes impressions, with no direct visibility on engagement or conversion, as there are limited tracking metrics
Digital marketing, on the other hand, is a more empowering scientific method of driving various identified consumer cohorts through a funnel - starting from awareness to conversion, depending on what part of the category buying journey they are on. This can be managed more effectively through targeted, relevant consumer communication, as the marketer has the flexibility to customise messaging by audience and can tweak them real time basis consumer feedback and conversion impact.
Digital marketing empowers marketers with real time data and metrics that help to drive media monies more efficiently than ever before by moving control of media from just media owners to now jointly between media owners and marketers. Brands typically pay the media partners, once a set number of predetermined actions, such as a click, sale or lead, generation, are completed - giving marketers more control than ever before on their marketing monies efficiency and returns. The cons are fewer with digital marketing, however, one could argue:
● Need to constantly invest in relevant communication, as there is higher creative churn and creative fatigue
● Risk of becoming automated on creatives due to the sheer need of number of creatives - brands could stop thinking large conversation generating consumer relevant campaigns
Another disadvantage of traditional marketing is increasing competition across categories, and division of categories into several micro-categories to meet the evolved consumer needs. Consumers are looking for more customised and personalised solutions than ever before.
Let's take an example, shampoos had, at best, three variants in the past - for dry, normal and oily hair. I'm sure no one resonates with that anymore. The category is now broken down by the umpteen consumer hair problems, ranging from split ends to hair growth regeneration, to personalised shampoos developed for you basis your hair analytics.
This is just an example of how difficult it is to get one brand message that would work with a large consumer audience and how broken consumer cohorts are today. This also highlights why digital marketing becomes a go-to marketing strategy.
The growth of Internet and the impact of COVID
With the world shifting to the Internet for everything, from understanding if flex workspaces are for them, to reading reviews online on best flex workspaces near them and finally choosing which one they should sign up for - consumers are on the web from need creation/validation to brand choice. While 2020 came as a rude shock to many businesses that had never considered digital marketing in the first place, COVID accelerated consumers' shift to e-shopping, which ultimately resulted in the closure of numerous companies without an online presence.
According to India Times, 61% of households in India used Internet in 2021, compared to just 21% in 2017. Over 130 million users came online in 2020 and 2021, i.e., during the pandemic era. As a result, customers shifted their attention towards businesses with an online presence. This boosted the need for digital marketing to reach out to an audience who was present online, and convert them into permanent buyers.
Digital marketing allows businesses to target just those consumers who need the product by pre-empting consumer behaviour with the help of technology.
Even though digital marketing has taken the driving seat, traditional marketing is still relevant for a certain audience - who are still predominantly on TV and newspaper, or when brands want to launch large audience agnostic campaigns. However digital marketing can help achieve this too and that’s the whole crux of this article. There is very little today that digital marketing can’t achieve, but the same does not hold true for traditional marketing.
So, what should be the go-to-strategy for marketers - traditional or digital marketing ?
Digital marketing, in today’s context probably, is the go-to option for most marketers. Reaching a select audience through relevant communication, while keeping a close check on costs and RoI, is possible only with digital marketing.
However, there could still be a place for traditional marketing, if you need to reach out to an older audience or audiences where Internet penetration is still limited, versus digital media options. The important thing for a marketer should not be so much an either/or, but ensuring the use of all channels to reach the consumer effectively, create impact and ensure they move ahead in the purchase journey to eventually purchase the brand.
Utilising all available digital and traditional media outlets will give one the best chance of success, even though the process of media procurement is constantly changing due to new technology. Consumers today are firmly expressing, both verbally and with their purchasing power, their preferences for products and brands that stand out for a lot more than functional product delivery. Brands need to not just reach out to the consumers, but also engage and be a part of consumer conversation to be relevant to consumers and thrive.
In India, digital marketing has a bright and compelling future. With the pros and cons on the table, I'd strongly urge marketers to evaluate the full potential of digital marketing. In a world where consumers are so evolved, marketers need a strategy that supports this evolution.
(The author Megha Agarwal is head of brand and marketing, WeWork India)