CMO and Founder of Bango. Fighting to build a strong connection between marketing dollars spent and revenue generated by businesses.
With budgets being squeezed and cost-per-click rising among most digital platforms, it’s hard to remember a more challenging time to be a digital marketer than the previous two years. In 2022, I believe we can look forward to renewal and a recalibration of how we work as marketers. Here are four trends I expect we’ll see this year:
Digital marketers will reevaluate their key performance indicators.
In a 2011 study, Fournaise found that almost three quarters (73%) of CEOs believed marketers lacked business credibility and failed to generate revenue for their businesses. Sadly, more than 10 years later, these perceptions have changed very little. When my company, Bango, carried out a CEO survey last year, the song remained the same. We found that nearly two thirds (62%) of CEOs feel that too much marketing budget is wasted on activities that do not deliver meaningful results. In a rebuke to digital marketing specifically, 77% of CEOs said that they don’t view digital ads as a key source of new customers or sales.
In order to shift a decade of skepticism, marketers must reevaluate how they measure their success and how they sell their efforts back to the board. Against the current backdrop of declining marketing budgets and increasing board expectations, 2022 will be the year in which this reevaluation finally takes place. What will this look like?
Marketers will shift their focus from intangible metrics, such as engagement, to more grounded metrics of measurement that reflect consumer buying intent, such as conversion rates. Only then can they present their work to the board, safe in the knowledge that their efforts can be tied back to the bottom line.
Digital ad spend on search advertising will decline.
Search engine advertising has dominated the wider digital advertising landscape for some time now. Last year, out of a global digital ad spend of $378 billion, search advertising accounted for the largest share at nearly $145 billion. Until very recently, it was believed to be a worthy investment of marketing dollars, purportedly because it was an accurate way of targeting consumers based upon their previous search and browsing history.
However, after examining over 65,000 search ad impressions, my company determined that more than a third (35%) of search ads never reached their target audience. With such a considerable chunk of search ads going unseen, we can estimate that around $60.2 billion of ad spend was immediately wasted in 2020 alone. That’s a huge waste of money—one that the industry is waking up to.
The mechanics of a typical sales funnel means that marketers do expect to lose between 5% and 10% of potential buyers at each stage of the process. To lose over a third at the very top? No funnel will ever be wide enough to catch those returns. That’s the reason why businesses will be cutting down on search advertising spend and exploring new, more effective forms of targeting.
Digital marketing will double down on innovative targeting methods.
There are seismic changes rocking the digital marketing industry—one of the most prominent being a renewed focus on consumer privacy. In addition to the looming threat of Google cookie deprecation, Apple’s changes to their Identifier for Advertisers means that most iOS users who were once easily targeted for marketing campaigns are now declining to be tracked.
This particular change is already biting. It’s been estimated that the industry is experiencing revenue loss on iOS of anywhere between 15% and 35% across mobile app advertising. Overall, it’s resulted in advertising that is more wasteful and less targeted in its approach. Most businesses are not in the position to pivot to large, first-party owned datasets and must rely on new innovative targeting methods rising out of the scramble to replace IDFA-based efforts.
Consumer audiences are being constructed from every morsel of data that companies can get their hands on. For example, publishers are touting their data on what consumers read and engage with most. Within the payments industry where I operate, we’re witnessing a quiet revolution in targeted advertising thanks to access to purchase behavior data. These data sources act as the foundation for the targeting methods that I believe marketers will be switching to, sooner rather than later, in order to future-proof their advertising campaigns against the ongoing regulatory changes.
Data privacy changes won’t mean the end of the world.
As much as digital marketing is indeed changing, it won’t be the end of the world as we, marketers, know it. More than half of U.K. marketers are expecting the eventual loss of third-party cookies to cut into business revenue by 10%–25%. That paints a pessimistic vision of the future, which I personally don’t subscribe to. New regulations and consumers’ privacy preferences may make it feel as if the walls are closing in, but that needn’t be the case.
As mentioned above, there are new sources of data ready to be used for targeting that I believe will be even more effective than what came before. We now have a chance to consider if the existing forms of targeting are really cutting it. Our research into search engine advertising, for example, gives us ample reason to be skeptical.
Here’s the opportunity: Instead of targeting advertising based on hunches derived from demographic data, personal characteristics or ephemeral online browsing habits, marketers can now begin to target advertising at consumers who are demonstrably more likely to buy their product. The surest way to estimate what a person is likely to purchase is based upon what they have purchased in the past. This purchase behavior targeting presents as one of many reasons not to despair in digital marketing this year.
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