There's a lot of money to be made in digital advertising -- no doubt about it.
In 2017, U.S. digital ad spend hit $83 billion, with mobile ad spending marking more than $58 billion. Facebook alone drove more than $9 billion in revenue in the second quarter of the year. Add its long-term plan for making WhatsApp a hub for e-commerce and digital payments and you can see why it's central in this discussion.
Traditional outlays have already felt the sting -- 2017 was the year when TV ad spend was eclipsed by digital. But digital marketing outlets, like social media, don't just drive spending from consumers -- they empower them.
David C. Edelman explains in a McKinsey & Company blog post:
"Most companies still concentrate marketing resources on only two stages: brand marketing up front to woo consumers when they first consider products, and promotions at the final point of sale to sway them as they are about to make a purchase. Digital technology is changing all that. Consumers who used to seek out family and friends for word-of-mouth product recommendations now read online reviews, compare features and prices on websites, and discuss options via social-networking sites."
This loss of control does provide marketers with one key benefit: The ability to participate in the conversations consumers are having. It pushes them past the old-school hard sell and into engagement.
And where does that ultimately lead? To paying the most engaged users, content viewers, fans of brand to keep them engaged. The dollar amount doesn't have to be large. It's more so an acknowledgement. We, as a brand, see you. And we appreciate you.
Leaving an Opening
With ad-blocking software usage rising by 30 percent worldwide, it's getting harder for us to reach our audiences. Combine that with boycotts, erroneous targeting, and a deluge of ads, and we're facing an uphill battle in getting closer to the very people we need.
"I think we all know the push marketing strategies aren't working so well," says Cat Howell, founder of Eight Loop Social, a brand strategy agency specializing in Facebook ads. "More than anything, brands now need to take people on individualized journeys. But how do you create customized experiences for each customer if you can't even get to know them?"
Businesses are neglecting to take advantage of the opportunities that do come to them. As Adweek's Jason Kapler writes:
"Up to 65 percent of companies have embraced social media to engage customers, but this is still generally a one-way effort. One study found that fewer than 50 percent of retail brands engaged with any tagged @mentions on Twitter, and even those that did respond weren't in any hurry. Only 11 percent responded within one hour, and a staggering 65 percent took up to five days to respond. This directly contradicts the level of engagement consumers are demanding."
Personalization takes place through genuine two-way conversations, Howell says. The fact that some businesses are failing to engage consumers has left an opening, ironically, for other individuals to capitalize on. And that void is currently being filled by influencers.
Businesses struggling to establish authentic conversations, then, become reliant upon influencer insights and consumer opinions to make progress. As influencers become more and more savvy on what to charge for their audience, we'll need to see the cost benefit in creating our own engagement rather than outsourcing.
Monetizing Insights
Companies big and small seem to believe the future of advertising lies in both two-way conversations and two-way formats, from startup offerings like AdSwapper and HitBliss to larger programs like Nielsen Digital Voice and DirecTV's Viggle app.
The goal is to connect consumers to brands so they're seen as partners, not targets. You do this by establishing user compensation as the industry standard.
This gives advertisers a major upside: They gain a captive audience willing to view ads and provide feedback on them, creating a more positive experience and enabling their brands to capture more eyes in the future.
Can you afford to pay consumers? Probably, yes. Payment can take many forms: gift cards, points to exchange for goods or Visa prepaid cards, major discounts on items, direct deposits, and more. Amounts, too, can fluctuate based on the type of participation being asked of consumers.
The bottom line: With the advertising industry losing $8.2 billion each year, we have to think differently. Be diligent on cultivating your own engagement. You may need influencers in the short-term to beak through but also work on your long-term play.
Or, be the consultant that helps brands navigate the engagement issue. Advertising will never go away. It always adapts. And someone or some people will lead it through this latest shift.
Why not you?
