Where will your marketing budget be going in 2018?
In early December 2017, just like many of my marketing manager counterparts, I have been working on a tab that is constantly open on my computer. Over the past few weeks, my team and I have been working on this tab to keep a record of all the possibilities we have to invest our budget in 2018.
And this year, I have decided to share my vision of marketing expenses. I think that Marketing, as we know it, is dead and I’m about to tell you why that’s a very good thing.
Before talking about 2018, let’s take a look back at 1994. I personally don’t remember much about this year. I was 6 years old and my only memory back in the days was Roberto Baggio’s missed penalty kick during the World Cup Final in the US.
Yet, on October 27, 1994, a banner ad was integrated into the code of HotWired.com, one of the first online magazines which later became Wired. This banner was 468 x 60 pixels and was ordered by AT&T, the American telecommunications company, and will forever be known as the first online advertising banner.
Why am I telling you about this banner ad? Because 44% of people exposed to this banner ad clicked on it in 1994.
Today, the average click-through rate on a banner falls below the 0,06%. And us marketers, have made it the norm. It seems perfectly normal to us that less than 0,1% of people exposed to our messages click on it. We would even be proud to reach an average 0,5% click-through rate :)
But how are we fighting this drop in click-through rates? We are designing formats that, we believe, are more creative. But in reality, there are simply more intrusive.
This results in web users rejecting our banner ads. They massively use ad blockers, plugins which block display ads. Today, 30% of web users have installed ad blockers and, in less than 3 years, this ad blocking rate has doubled!
Long story short, click-through rates on banner ads have dropped and marketing teams invest in acquisition displays that are blocked by web users. Therefore, generating traffic becomes increasingly more expensive which results in a rise of the acquisition budgets. Worldwide online ad spending has reached $220 billion this year!
I’m no sociologist but I’ve understood two things: people need to believe in what they buy. People love hating advertising, they always have hated it and will continue to hate it.
But then, what is our role as marketing specialists in this hyper-mediatic world constantly interrupted by ads we don’t want to see?
I believe marketing specialists should consider 2018 as an opportunity to build closer relationships with their customers.
Because there is a real paradox. 27% of the traffic hardly won by marketers land on their website with a purchase intention. This represents, as marketers like to call it, a conversion potential. Yet, only 2% of visitors are actually converted.
Why? Visitors are not only IP addresses, they are people who have doubts, questions and/or problems. According to a CCM Benchmark study, 59% of these visitors who didn’t make a purchase would have done so if they had been supported in real-time to compare products or if they had receive some advice about the products.
When we think about marketing, we think about advertising. iAdvize and I share a common vision: we believe that Conversation is the New Marketing!
For the past 7 years, we have proven that, by offering support to visitors in real-time via messaging, you multiply your conversion rate by 10.
In other words, a website which converts an average 2% of its visitors in self-service would convert 20% of its visitors if they were supported via messaging.
It’s the end of the era of mass exposure and the beginning of the era of relationship marketing.
Forrester predicts that 3 billion dollars of interruptive advertising budget will be reassigned next year to a conversational experience. In its recent report The End of Advertising As We Know It, Forrester concludes its demonstration of how marketers will reassign their budgets to conversational marketing by saying:
« When they do, that will signal to everybody that the end of advertising is upon us. And that something much better is on its way ».
Sources: eMarketer, Forrester, CCM Benchmark
