Marketing & ROI: The Key to Success
It’s hard to avoid advertisements from car dealers here in the UK — from television and radio adverts, to digital displays both on our streets and in our social feeds, they seem to be everywhere. According to figures from Google’s Car Purchasing UK Report in April 2017, £115.9 million was spent on online display and direct mail in 2016 alone, showing that it is a very lucrative yet competitive market to advertise in.
Marketing a business can sometimes be tough, with businesses not knowing how much they should invest to make sure their brand is seen by a specific audience. However, expenses matter very little when it comes to automotive manufactures such as Audi and Volkswagen, who have ground-breaking budgets to play with to deliver exceptional marketing campaigns. With a huge interest in social media advertising, companies across all sectors are looking to expand their digital visibility. But that doesn’t come cheap, as fierce competitors battle it out for the best digital space.
To investigate further, Audi dealership, Vindis, look to see how different industries are using the marketing tools that they have to boost their marketing methods.
Automotive
Over 82% of Britons who are aged 18 and over have access to the internet for personal reasons, according to the Google Drive To Decide Report which was carried out alongside TNS. Evidently, we can see that today’s auto shopper is more digitally aware, as 85% use their smartphones — which 65% say is their preferred device when accessing the internet. From these figures, we can see that businesses are having to adapt their marketing methods to appeal to those who are using smartphones, as this has become a more viable option to get your message in front of the right audience and optimise it fully so that everything they need to know is accessible. This in turn can enhance the users’ overall experience.
According to the same report, 90% of people who shop for automotive products online make sure that they carry out extensive research on the product before making any purchase decisions. Not only that, 51% of buyers start doing their research online and 41% of these are using a search engine to do so. With this information, car dealerships are having to capture their audience’s attention while they’re doing their research — otherwise known as taking advantage of the micro moments of influence. This could include displaying online advertisements, which a lot of the industry are currently doing.
Industries of all kinds are using digital advertisements to help target their primary audience. However, research carried out by eMarketer has suggested that the automotive industry accounted for an incredible 11% of the UK Digital Ad Spending Growth in 2017, which puts the sector in second place in comparison to the retail industry. It’s expected that the automotive industry will witness a further 9.5% increase for their ad spending in 2018 — which will allow them to retain their current position in the online market.
Most people will purchase their vehicle on the forecourt, but how is the power of the online and digital world influencing the decisions of consumers across the globe? Research suggests that 41% of shoppers who do their research online find the research that they carry out on their smartphones ‘very valuable’. This isn’t a surprise though, as almost 2.5 billion people have one. Customers can still be influenced by the media though, as 60% said that they were — when broken down, 22% said they were influenced by marketing promotions, which validate just how much online investment is working.
For the automotive sector in particular, traditional methods of advertisement remain the most popular and is where a lot of companies assign their budget. However, over the last five years, the digital world has jumped from fifth most popular to third and has experienced a 10.6% increase in expenditure for the industry.
Fashion
The retail industry is one of the most competitive sectors in the world — especially with the direction that the digital world is driving us towards in terms of sales and exposure, which has been evidently shown by figures that suggest online sales hit an incredible £16.2 billion in 2017. Although this figure was once a distanced dream, it has become a reality and it’s predicted that by 2022 this figure will grow by 79%. However, this can only be achieved through effective marketing methods, allowing us to pose the question: where are retailers assigning their marketing budgets and has this become one of their main priorities for customer relations and sales?
A report from the British Retail Consortium stated that in December 2017, ecommerce accounted for almost a quarter of all purchases as brands across the world, from ASOS to Boohoo, continue to set a focus on their online presence to drive their shopping phenomenon. Online retailer ASOS experienced an 18% growth in sales in the UK in the final four months of 2017 — Boohoo witnessed a similar increase of 31% during the same period.
Because of their online competitors’ results, big brands like Marks and Spencer, John Lewis and Next have invested millions into their online presence and marketing methods to help capture the online shopping market and, overall, drive their sales digitally. It’s undeniable that online shopping hasn’t pivoted in recent years, with John Lewis saying that 40% of its Christmas sales came from online shoppers — Next didn’t achieve as much, but have instead said that they are going to invest a further £10 million into their online operations.
British customers are thinking twice about stepping out on the high street to do their shopping, as it’s becoming more convenient to complete the same tasks from the comfort of their home — whether this is using a desktop computer of a smartphone that can be done on the go.
Research published by PMYB Influencer Marketing Agency said that 59% of fashion marketers increased their budgets for ‘influencer marketing’ last year, as it has become a necessity to put certain products in the limelight of an influential audience. As part of their marketing strategy, 75% of global brands have admitted to working with social media influencers.
More than a third of marketers believe that using influencer marketing for their brand is more successful than traditional methods of advertising in 2017 and, although this can be argued, it’s important to understand that 22% of customers are acquired by using an influencer.
Healthcare
Due to more intense regulations around marketing procedures in the healthcare sector, organisations will have a more timid approach and have to abide by countless rules and regulations. ROI methods undertaken by other companies will not work for the healthcare market, regardless that 74% of all healthcare-related marketing emails aren’t opened by the receiver even though this is a vital method of communication for healthcare companies and is something heavily important for their marketing strategy.
Rising in usage over the last few years, email communication has become a main platform, with approximately 2.5 million people using it. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.
As one in 20 Google searches are phrased around healthcare, it’s important that the market is utilising online marketing as much as they can to ensure better communications with customers. This is likely to occur because most people look to Google before phoning their doctor, due to it offering a quicker answer than calling a health centre.
77% of all health enquiries begin at a search engine, according to data gathered by Pew Research Centre — this leads to 72% of total internet users saying they’ve browsed online for health information within the past 12 months. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.
However, we should not be forgetting the power and influence of social media marketing. Although there are tighter restrictions in place for the healthcare industry when it comes to marketing products and services — their social media presence should not be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.
Utilities
It’s becoming more difficult for utility companies to retain their customers due to a rise in comparison websites that offer the public advice on where they can find the best deals for their requirements — allowing them to make a more informative switch to a cheaper and better alternative.
Comparison websites are spending millions on TV marketing campaigns that are watched by a huge portion of their audience and, because of this, it has become essential that utility suppliers are positioning themselves so that they are listed on these types of websites and offer some sort of competitive deal that can allow them to stay within the mind of the consumer.
There are four key figures who play an influential role in the comparison market — Compare the Market, MoneySupermarket, Go Compare and Confused.com — who are all among the top 100 highest spending advertisers here in Britain. But does this have a profound impact on utility suppliers?
The power of comparison websites can be the difference between retaining a high percentage of customers for one supplier and a high rate of customer acquisition for another. It’s important for them to keep a close eye on what their competitors are doing — and outperform them with any chance they get to ensure they stay on top and not deposition themselves from potential customers who could choose them over another supplier.
For example, utility magnet British Gas has shifted its marketing methods towards customer retention rather than the acquisition of new customers. Although this change will be a slower process to measure, they believe that retention will lead to acquisition of new customers. The gas company hopes that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention for their business and continue to see growth all around.
News broke recently of a £100 million investment to be assigned to a loyalty scheme with aims to offer a discounted energy service which can allow a focus on the value of the customer, whilst understanding their behaviour and spending habits over time to discover what they’re looking for in a company. With this being a sector that is increasingly competitive, it’s important for companies to retain the current customers they have before looking to gain new ones.
With 40% of all searches in Q3 2017 being carried out on a mobile device, 45% of all advertisement impressions were through mobile too, according to the Public Utilities Report in December 2017 carried out by Google. This shows that the utilities sector is looking to take a slice of the digital cake. As mobile usage continues to soar, companies need to consider content created specifically for mobile users, as they account for a large proportion of the market now.
Is the investment worth it?
Online marketing and a great investment is essential for companies in the automotive and fashion sectors. As the purchase process changes, there has been a clear increase in online demand and some game players could find themselves out of the game before it has even begun if they neglect the digital opportunities that they have.
After looking at the utilities industry, the picture is much bigger. Although TV and digital appear to be great driving forces for their marketing campaigns, comparison sites must be considered as an option. If a utility company does not market themselves correctly, advertising or listing on comparison sites could see them fall behind.
41% of the marketing budget for an average business is expected to be spent on online strategies in 2018 and, by 2020, this figure will grow to 45%. Social media advertising investments are expected to account for 25% of total online spending, while digital advertisements are expected to increase significantly too.
If online usage continues to grow over the next few years, which it probably will, the question to ask yourself is; is it worth it?
