The Impact of New Technology on Marketing
By Greg Paull, Co-founder & Principal, R3
Technology has transformed marketing by making campaigns more personalized and immersive for people and creating ecosystems that are more integrated and targeted for marketers. And it’s not just the interface between brands and people that have been transformed. New technology in marketing has permeated the infrastructure and systems on which companies are built, delivering value to procurement and adding to the bottom line.
In 2013, 47% of US marketers focused on creativity to drive marketing strategy. Last year that number was 29%. In 2022, for 56% of marketers, both creativity and technology will play an equal role in determining where and how they engage with their customers. 30% will prioritise technology over creativity.
Being where consumers are
To better grasp why this is happening, we only need to look at where people get their information, their desired modes of entertainment and their shopping preferences.
• Connectivity: There are about 4 billion internet users online, meaning that 50.8% of the global population is connected. In the next three years, China and India will add more internet users than what exists in the US today.
• Mobile: More than 5 billion people have mobile devices, and over half of these connections are smartphones. It is anticipated that $93 billion will be spent on mobile ads this year, over $20 billion more than what will be spent on TV.E-Commerce: Over 2.14 billion people worldwide are expected to buy goods and services online in 2021.
• Entertainment: One-third of online activity is spent watching videos online, with half a billion people watching videos on Facebook every day.
What marketers need from brands
We can also look at what marketers want from brands to see why new technology like blockchain and chatbots are growing in adoption and use. In this way, technology is less a transmitting device and more a tool for better communication.
• Personalization at Scale: In a study by Monetate and WBR Research, 93% of businesses with advanced personalization strategies reported an increase in revenue in 2018.
• Experiential Marketing: Compared to digital marketing, experiential initiatives that create emotional bonds between consumers and brands can have ten times the return on investment, building measurable loyalty.
• Accountability & Transparency: Of the US$63.4 billion that brands spent on programmatic in 2017, as little as 27% made it to working media. Up to 12% of those dollars were lost to ad fraud, and an astounding 55% fell victim to the so-called “tech tax” that is applied at each stage of a programmatic buy.
A partnership between marketing and technology
To really understand how best to apply new technology to a brand or product, marketers will need the assistance of their company’s technology, information and legal departments.
The challenge for marketers will not be what to do with the data they collect, but how they use it. You can have the most sophisticated technology, but without marketing intelligence that unifies data insights, the technology will not deliver the ROI you expect.
More budget to grow revenue
The cost of investment in new technology is a common concern for marketers, although, as with all technology, total cost is expected to decrease as economies of scale and competition among service and platform providers increase.
Marketing technology spend is also likely to rise as marketing budgets grow. Total ad spend in the US is anticipated to grow 24% between 2018 and 2022, from $220.96 billion to $274.44 billion, while the share of budget dedicated to marketing technology is anticipated to remain stable over that same timeframe, at 30% in 2018 and 32% in 2022.
Which technology category will receive the most investment is dependent on the type of company and the level of implementation required. Some technologies require minimal integration with legacy systems, while others demand extensive integration. However, the investment is justified by the amount of revenue these technologies are anticipated to bring in for companies. Greater digital interactions will generate more data sets, which will allow retailers to better customize promotions, prices and products for each customer, dynamically in real-time.
To learn more about the impact of emerging technology on marketing, request a copy of Future40, R3’s report on 40 technology companies making real change for their clients. www.R3future40.com