The Future Of Marketing In An Increasingly Ad-Free World
The future of marketing is being debated by leaders in our industry. Some see a shift to more customer-focused content marketing. While others want to continue pushing product promotion content interruptions. Which side are you on?
Ad Blocking Gets Serious
There are approximately 200 million monthly active users of ad blockers globally, according to a recent study by Adobe and PageFair. And a more recent study by Comscore found that 10% of US consumers are already using ad blocking.
Apple’s mobile operating system now allows users to enable ad blocking, so expect to see much higher ad blocker usage this year.
Brands are going out of their way to get and keep consumer eyeballs. Packaged goods giant Unilever, for example, has so far spent $15 million on its “future hunting” Foundry program, in hopes of connecting with marketing-tech startups to earn more consumer attention, loyalty and ultimately sales.
But according to this Advertising Age article, ad blocking is not the only challenge marketers are facing. 55% of TV programming is now viewed via DVRs, video-streaming subscriptions and other sources. And for millennials ages 14 to 25, this number jumps up to 72%.
People are no longer consuming media the same way a mass audience would in the past. They are now customizing content according to their own preferences. The Advertising Age article states that, rather than fighting this fragmentation, many companies like Clorox Co. are embracing it.
Clorox has shifted more than 40% of its media spending to digital. Using programmatic media, the company is able to not only save money, but to reach people with more relevant ads to convert them into sales. According to Clorox Co. Chief Marketing Officer Eric Reynolds, this is the secret to their steady growth.
Improved targeting is only one part of the agenda, the Advertising Age article suggests that the industry also needs to find more creative, effective ways to reach today’s consumers, either by making it harder for viewers to avoid ads or to get them to opt in.
Increasing Popularity Of Unavoidable Ads
Some companies are spending their marketing dollars on media where ads are harder to avoid. For example, GE has shifted money to sports programming like NFL football and NCAA games. Others are pouring their dollars into the least avoidable forms of digital advertising. Pre-roll, search and mobile newsfeed ads on Facebook and Google are increasingly annoying, and impossibly difficult to avoid, even with ad blockers on.
What makes Google and Facebook so attractive for marketers though isn’t just their relative immunity to ad blockers alone, their huge audiences also allow brands to minimize costs while maximizing reach.
Content Marketing On The Rise?
More marketers are doing content marketing now if they haven’t already. But not everyone is a fan of it. Procter & Gamble Co. Global Brand Officer Marc Pritchard is one of them. He feels the term content marketing itself is “overused and underdefined.”
Pritchard prefers calling marketers’ work “advertising,” since at the end day it’s about influencing consumer purchasing decisions to achieve a brand’s goals. And while I don’t agree with Pritchard that the term “content marketing” is still misunderstood by many in our industry, I don’t think calling it the exact opposite of what it is will help either.
PepsiCo Global Beverage Group President Brad Jakeman, on the other hand, wants the industry to stop using the term “advertising” in favor of “content.” Amen brother! No one EVER asked for an ad to interrupt their content experience. But EVERYONE consumes content.
Love it or hate it, content marketing isn’t going away anytime soon. According to PQ Media, content marketing currently accounts for $67 billion in U.S. spending, and is expected to continue to grow.
It’s easy to imagine why Pritchard feels this way. P&G’s CEO doesn’t hand him a bucket of money to do marketing, especially not content marketing. The CEO of P&G and many other consumer brands wants their marketing team to make ads and coupons. And lots of them. Reach and frequency, baby!
And while they litter the streets and the airwaves with enough pieces of torn up paper to host a ticker tape parade, they “count what they catch.”
To many in the marketing world, reach and frequency is awesome. It is the source of their budget and power. It is easy to buy reach and frequency and shout into the wind. Who cares if no one hears it?
Just don’t ask Pritchard, and countless other CMOs who love their big advertising budgets, to try and figure out engagement.
I once asked a big brand CMO (right to his face) after he told me they only care about reach: “well I guess you can shout into the wind, or you can engage directly with your target audience.” I was suggesting they try and measure engagement.
He didn’t care. He wasn’t moved. He certainly didn’t change. He just went and bought more ads.
Making Avoidable Ads Unavoidable
With the growth of content marketing, it’s often assumed that the creative and production costs associated with content marketing would be higher compared to media spending.
However, according to the Advertising Age article, a recent survey by Percolate found that 20% of overall marketing budgets are allocated to creative costs, and the biggest driver is not content marketing.
Marketers are now spending more on creative costs for traditional ads to make them more appealing to their target audience so viewers will not avoid them.
New Face For Brick And Mortar Stores
As the Advertising Age article suggests, people can avoid ads but they still have to buy things. To reach people in store, brands have to find new ways to encourage people to make purchases in stores rather than online.
Revlon, a brand that has relied heavily on traditional advertising and promotion displays in the past, began experimenting with adding beauty consultants to cosmetics counters in shopping malls. The brand hopes to use trial samples to drive purchases at stores. Hey this feels more like content marketing than advertising. Help your customers and they will be more likely to buy from you.
Event fast food chains are revamping their physical stores as a marketing tactic to attract more customers. Domino’s Pizza, for instance, has renovated 2,000 stores as part of its “pizza theater reimage” with openly visible kitchens, allowing customers to order and watch their pizzas being made with the freshest ingredients.
Similarly, Wendy’s has opted for a more contemporary look, with fireplaces, flat-screen TVs and low-slung cushioned chairs. Many grocery stores, such as Kroger, are also getting a facelift to look more upscale, adding higher-end amenities such as coffee shops, sushi and oyster bars.
The New Brick And Mortar: Amazon
While e-commerce represents a very small percentage of total grocery sales – estimated at 2% according to Morgan Stanley – it inevitably still has an impact on margins, particularly in-store promotions. With customers taking less trips to the shopping malls, in-store displays are reaching fewer and fewer people.
And 2016 may actually be the year for grocery e-commerce. Morgan Stanley’s consumer survey found that 26% of online shoppers are expected to purchase groceries online this year, up from only 8% a year ago.
This trend explains why many companies, such as Clorox, are dedicating more promotion resources to e-commerce sites and businesses like Amazon and Walmart.com. While one would think that big retail players like Target and Walmart would be consolidating, the reality is that even retail is fragmenting too like marketing and media. Small-format stores are growing in number as a result of urbanization, requiring big companies to reallocate and diversify their resources.
“Native Advertising For E-commerce”
P&G is the world’s biggest ad spender for “point of market entry,” or sampling. It offers customers samples of its products at times when customers are most likely going to make brand decisions. For example, in the past P&G has provided samples of Pampers diapers to maternity wards and at Lamaze classes.
This growing interest in targeting and reaching consumers with product samples at the right moment, even when they are not shopping at stores physically, has fueled the growth of companies like Exact Media, who specializes in distributing highly-targeted sample packages to consumers. In the last year alone, Exact Media’s sales has tripled, with big clients like P&G, Johnson & Jonson and Unilever under its belt.
Exact Media’s CEO Ray Cao says the idea is like “native advertising for e-commerce.” He explains, “If I’m getting a shirt, and I also get a sample of laundry detergent, it doesn’t feel like I’m getting a random banner ad.”
Maybe P&G isn’t lost forever.
Rethinking Product Packaging
Coke’s “Share a Coke” labels with people’s names printed on the bottles is perhaps one of the best examples of customizing packaging to better connect and reach consumers.
Many other brands are also tapping into customized packaging to get closer to their customers. Clorox’s Brita, for example, has partnered with Amazon to sell chip-enabled water filters, which will automatically generate online orders of replacements when a customer’s old filter is almost used up.
Technological advances, such as digital printing, conductive inks, Bluetooth-enabled packaging and near-field communications for mobile phones, are opening up endless possibilities for brands to reimagine their packaging to better engage consumers and win their loyalty.
The Future of Marketing Focuses on Customer Value
OK, so traditional marketing tactics are not dead. Many are finding new ways to reach, engage and convert their target consumers by focusing on providing value. But let’s please not call all this cool stuff “advertising.” It’s just what marketing was supposed to be: Helpful!
What do you think? Have you seen any other disruptive trends or ideas that you think marketers should know or try out? Please share your thoughts below!