Digital poised to grow globally


  • Business
  • Saturday, 16 Jul 2016

Challenging year as marketers seek to improve client experience

THIS year will inevitably be a challenging one for marketers globally as they dive in further to focus on improving client experience and marketing in a digital world.

The hazy economic climate has impacted globally advertising spend on traditional media and this has somewhat stifled, beaten by the shift to digital.

But with the digital audience having short attention span, hopping across platforms and devices, marketers will perhaps resort to changing their marketing strategy, allowing clients to make decisions based on their terms unlike before.

Having years of experience in digital marketing since he graduated in 1988, Mindshare global chief strategy and digital officer Norm Johnston shares his views on digital marketing when met at GroupM’s digital conference, “HowNowDigital” that saw an overwhelming response among marketers in Malaysia.

Responsible for leading Mindshare’s global digital specialists and managing the firm’s business strategy division, Johnston admits that it is a real challenge when digital audiences’ attention span are on a downtrend.

Johnston: ‘My advice to marketers is to firstly build the infrastructure to manage the amount of data and look for the silver bullets for singular pieces of data that will have significant impact on people’s behaviour.’
Johnston: ‘My advice to marketers is to firstly build the infrastructure to manage the amount of data and look for the silver bullets for singular pieces of data that will have significant impact on people’s behaviour.’ 

“A way to overcome this is one should look at the relevance and the ability to use data, and indentify what the client needs and where the need is.

“The other important aspect is the shape and creativity of the content. And there is nothing like a good idea to capture clients’ attention,” says Jonston.

But creativity has its downside as well, says Norm and while it is not built for the environment, he thinks that it is pertinent to see how people view the content as well.

Making his first appearance in Malaysia as a keynote speaker for the topic “Adaptive Marketing for the Digital Age”, Johnston gave his insights that it was not all about the size of data.

“Having a vast amount of data available to you is positive, but it often overwhelms people.

“But some singular pieces of data have a huge impact on behaviour. And my advice to marketers is to firstly build the infrastructure to manage the amount of data and look for the silver bullets for singular pieces of data that will have significant impact on people’s behaviour,” he adds.

Last December, GroupM, the world’s leading media investment management group responsible for nearly one-third of global ad investment, maintained its mid-year forecast and estimated digital growth of 14% in 2016, commanding 31% of global ad budgets.

This is, however, a decline from the 17% growth predicted for 2015.

Johnston says the role of digital marketing in the media industry has become increasingly fundamental now.

“Digital spend was in the single digit back in 1995 and now some markets have reported digital spend of about 50% of total media spend, driven by people themseves.

“More and more individuals are spending time online through various devices than they do with any other traditional media,” he points out.

Meanwhile, eMarketer, a research firm that provides insights and trends related digital marketing and media had reported last September that global digital ad spend would increase 18% in 2015 and make up nearly 30% of the overall ad market.

The industry is seeing more online editions for magazines and newspapers, and digital video has replaced traditional TV, an eMarketer analyst was quoted in the report.

Having said that, Johnston thinks although the worsening economic conditions usually result in diminished advertising budgets, more advertisers are shifting budgets into digital, given its measurability and greater accountability.

This is particularly with improved attribution modelling that shows correlations to actual online and physical sales.

“Digital is increasingly becoming the safer bet for media investment, and an inevitable one given where people are increasingly spending their time.

“Despite strong economic headwinds, digital is poised to continue growing globally as well as in Malaysia,” he says.

Social media and growth areas

Online advertising brings several advantages over print, says Johnston.

While it had advanced targeting ability, ensuring the right ad gets in front of the right person, he says people are able to act immediately with those ads, whether sharing, engaging, clicking on them, and making instant purchases online.

Another positive side to it is marketers can optimise their ads in real-time, changing the message or media plan based on results.

With bigger platforms like google and Facebook now dominating the figures in the Unites States, and Twitter and Snapchat owning some 65% to 80% of total media spend coupled with the appearance of other massive players like WeChat, companies are trying desperately to attract media investments.

Reports indicated social media firms like Facebook and Snapchat are looking to bulk up their innovative ad offerings with the aim to attract clients.

Research revealed that Facebook and Instagram had made up one billion and 400 million users, respectively, while Twitter and Snapchat each boasted 320 million and about 100 million daily active users in the second half of 2015.

Johnston opines that companies in China have copied firms from the Silicon Valley and have their versions of Twitter, Facebook and Amazon now.

“They are more sophisticated than Facebook and Twitter and now firms in the Silicon Valley are trying to copy what WeChat has done in China.

“That to me just encapsulates how competitive this environment is and how rapidly firms are trying to be more attractive to advertisers,” Johnston points out.

On that note, he says that marketers should have a strong marketing strategy in place and a solid foundation, or not run the risk of losing customers through competition.

Based on GroupM’s statistics, the number of people on the Internet is forecast to grow to 7.6 billion by 2020, from 3.2 billion in 2015.

Apart from Africa and Latin America being huge areas of massive growth Johnston says China has without a doubt seen explosive growth in online advertising and benefitted hugely from a sophisticated Internet infrastructure and ecosystem with some homegrown giant players like Alibaba and Tencent.

He thinks that India will continue to be stifled by a lack of pervasive Internet access beyond urban areas.

“However, if Google and Facebook have anything to do with it, millions more will get Internet access soon via Project Loon, Internet.org, and other innovative ways to provide more access,” he adds.

On where Malaysia stands, he says it arguably sits in between, perhaps closer to China, adding that the mobile penetration and Internet access numbers here are particularly staggering, and advertising investment will naturally follow.

Based on GroupM’s data, Malaysia’s advertising spend on digital media is nearly 15% of total budget and by 2018, the total spend on digital advertising is forecast to be at the same level as TV spends.

It also forecasts net global ad growth in 2016 of US$22bil and thinks that digital will comprise 90% of this.

Expansion, consolidation and challenges

With mobile proving to be one of the fastest-growing media channels, the industry is also witnessing a huge growth in mobile apps.

And marketers world over had to revamp their marketing budgets and strategies due to the surge in mobile users and apps, causing a huge impact in the relation between brands and consumers.

Johnston says China has taken WeChat ahead and is one of the top apps among mobile devices here.

But the question is whether China wanted to expand it beyond Asia and how they do it, he says.

“One way is to build their user base and the other option is acquisition.

“Twitter for example is trying desperately to grow their user base,” he adds.

Johnston foresees that more consolidation is expected in the next few years, especially among the Chinese players.

The likes of Tencent and Alibaba are also growing and it’s not just social network but e-commerce, he says.

In terms of challenges, Johnston feels that getting the infrastructure in place to deliver on digital and programmatic advertising has been quite disruptive in the industry.

“This is due to the confusion in acronyms and marketers have to make decisions on the many different choices that are available.

“Also, different organisations have trouble getting data around and its mainly to do with communication,” he points out.

Additionally, the industry is such where it had to deal with ethical security issues.

But Johnston thinks that it’s pertinent to have the foundation in place.

“If not, they will be struggling in the next few years because the importance of things in programmatic media is set to increase and this is forecasted to be about 20% of total media by 2020, which includes television, radio and the various channels that will become programmatic,” he says.

He concludes that the other challenge in the industry is culture.

Many firms are still not designed and built for speed. he reckons, adding that they are still slow.

Having said that there is lack of communication between the different agencies, which consequently creates a dysfunctional system where people cannot react.

“And this is where you need to reconfigure the talent, and rethink of ways to work together,” he adds.

The “HowNowDigital” one-day conference was hosted and organised by GroupM with Star Media Group Bhd as one of the media partners for the event.

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