Digital Marketing Global Market Outlook
The global digital marketing spend was valued at $170–190 billion in 2016 and future estimates looks much stronger due to continual attraction on digital channels. It is forecasted to grow at a CAGR of 13 percent to reach around $280–310 billion in 2020.
Globally, North America will continue to dominate the digital marketing industry by contributing around 39–40 percent towards the global digital marketing category spend. Digital ad spend in APAC has surpassed Europe and this growth is primarily driven by China & emerging Asian markets due to increasing investments on technology and digital platforms in these regions
Global Digital Marketing Maturity
Online videos and mobile ad spend have fueled the overall digital marketing spend in North America and Western Europe. Mobile ad spend that once accounted around 6–9 percent of the total digital spend share in 2013 is expected to contribute around 37–39 percent of the digital spend in key Western European markets such as the U.K., Italy and Spain by 2017
Global Digital Marketing Industry Trends
Users in the European market consider mobile in-app display to be intrusive, and due to this, spend for mobile in-app display is expected to go down in the region as it will be considered harmful to the brand value
Global Drivers and Constraints
The digital marketing spend in Europe and North America together is expected to grow at a CAGR of 11 percent and will contribute around 65 percent of the global digital marketing spend in 2018. This modest growth is due to the positive spend inclination from key sectors like BFSI, CPG, entertainment and media and telecom.
RTB and Digital OOH Media
- Rising adoption of Real-Time Bidding (RTB) of online display ad slots and increasing consumption of rich media and video advertisements are expected to be the key driving factors for display advertising spend in the coming years in Western Europe
- Adoption of digital Out-Of-Home (OOH) media is limited to the developed countries; e.g., the emergence of digital TVs in gas stations, where 78 percent of the drivers (in the US) watch TV as their vehicles are refuelled Targeted Mobile Ad Delivery Emerging advertising technologies (such as RTB platforms, location-aware and bandwidth-aware technology tools) are enabling contextually relevant and personalised ads based on device features, mobile internet speed, location and other factors
Difficulty in Calculating ROI
- Most marketers believe that they are not sure about the impact of digital marketing as they often encounter lack of synergy between marketing and procurement centres. Thus, securing a budget for digital marketing investments becomes difficult because providing a digital marketing return on investment is the most critical challenge
Key Observations Across Digital Channels
Digital component with medium strategic importance
- Marketers are adopting software-enabled, automated and measurable e-mail techniques
- In the US, e-mail marketing shares almost 10 percent of the total online ad spend by the marketer
- Agency and marketer adoption rate is very high in the US
Most of the global agencies are present here, and there are many small/niche agencies catering to accounts with low budgets. Maturity of the agencies is low in the Middle East and Africa region.Maturity of the buyers is high in Western European markets and medium-high in the Eastern and Central European markets. The maturity of buyers is low in Africa and low-medium in the Middle Eastern markets.
Key Observations Across Digital Channels
An essential digital marketing division, but the current adoption rate is low to medium as the supply market is slowly maturing
Marketers are developing text-only websites compatible to mobile platforms to enhance consumer reach (Facebook created 0.facebook for its mobile website) in the emerging nations
Total revenue generated through mobile application is still low. However, consumer adoption is growing aggressively
Sourcing complexity increases with the emergence of specialised mobile marketing agencies such as Apsalar, Localities and Flury
As the new trend indicates that global network companies do like to collaborate with new specialised digital agencies to have economies of scale and cost benefit, and also due to increased penetration of mobile and internet media, niche specialist agencies may be motivated to enter the industry.The supplier power would depend on the overall digital ad spend managed and the percentage contribution of the marketer to the overall spend of the agency.
intensity between rivals is high, especially in matured markets such as Europe and North America due to the presence of multiple globally established digital agencies.
Buyers are likely to have a better negotiation power due to the presence of diverse agencies and low switching costs
Consolidation of spending by the buyer increases the amount managed by a single agency and gives the advertiser a higher negotiation power
Effort Reduction of Agencies
Global marketers are harnessing opportunities to reduce the effort of agencies’ leadership and account management teams with marketing technologies which promise to automate customer identification, customer profiling, customer query management, customer targeting, campaign concept development and review, campaign deployment and campaign performance reporting Partnering with Agencies
Marketers who share monetary and non-monetary resources with incumbent agencies tend to strengthen the ongoing relationship and expect value-added services. Agencies are willing to offer 2–10 percent billing rate discounts for additional contracts.
Agency Restructuring is Observed
Major digital agencies (Intouch Solutions) are realigning their resources to develop separate facilities for healthcare and consumer care communication to win the consolidated marketing accounts. Intouch Solution’s Intouch Science is a healthcare-specific division launched in Q4 2013. This segment is expected to fetch a 50–60 percent revenue by 2015
Line Between Core and Developing Capabilities is Blurred
Traditional print publishers such as NEJM and Elsevier are employing digitally skilled human resources to compile live CME events (meetings, symposiums, conference lectures) into virtual CME course apps which are then integrated into various independent or branded platforms
A landing page could be a dedicated website for the telecom company’s products or a social media profile page of the company. The online advertising channels are used as lead generating avenues for the right audience to reach the landing page. The best online interaction between the audience and the brand happens in the landing page of the campaign.