Your Marketing Budget in 2014 12/28/10

In 2014, a marketing budget will allocate most funds to digital and will be split between mobile, social, email, display and search – in that order of priority.  Media selection depends on the message and the audience, and there is growing consumer preference for channels and solutions that are interactive.  Evidence of this trend includes:

• Panasonic’s shift in focus to digital, citing “Quantifiable ROI” as a key benefit.
• Procter and Gamble opt for slashing their television budget in favour of social media campaigns.
• Unilever doubled their online ad spend for the second year in a row.
• Jetstar allocates 40% of their marketing budget to social media

Forrester's Interactive Marketing Budget Forecast up to 2014 for the USA. The trends are applicable to all western markets.

As I demonstrated in APAC SEO Trends & Your 2011 Strategy,newspaper and magazines will develop formats on mobile devices fueled by consumer uptake of tablets and large screen mobile phones. Magna Global predicts that by 2013, online overtakes print, but newspaper advertising still posts modest growth versus today.  I think this is mostly due to mobile devices offering connectivty like 3D barcode scanning and more sophisticated augmented reality applications, that for example, reveal additional digital data embedded in a newspaper ad.  The other major trend I discuss is the shift from TV to Internet TV with ad dollars flowing from FTA TV to Online Video.

Mobile driven by

A shift in consumer behaviour, more engaging ad formats and also location based ads.

Interactive ads for advanced, smartphone and tablet served through applications across iPhone, Android, Blackberry, and Nokia(Ovo.)

Increased uptake of Mobile Apps: IDC predicts the global market will grow from $4.9 billion in 2010 to $35 billion by 2014.

Increased audience attention on 3rd and 4th screens:  In the second half of 2010, traffic from mobile devices increased by 363 per cent over the previous six months. iPhones and iPads accounted for more than 70 per cent of mobile traffic. – Kogan.com.au site stats.

Smarter location based ads that leverage NFC will join the ranks of Facebook Deals and Foursquare Specials to offer smarter local search marketing. Examples include: this Alice in Wonderland Interactive Ad created by Sproutinc.com.  This check-in triggered advertising is not restricted to physical locations; it’s already happening with Terrestrial TV show checkins.

According to Yahoo Insights, mobile traffic spikes whenever a live TV event takes a commercial break, indicating that audiences are using their TVs, computers or mobile devices concurrently.  This example of consumer behaviour is why Yahoo have followed Apple’s lead with their iAd format, to offer greater audience engagement, entertainment and usefulness.

We also note that as smartphone sales outpace pc shipments by 2012 mobile has the potential to quickly grow to 15% of retail spending (Morgan Stanley)

Social driven by

Increased understanding of business on how to use social networks.  The value of a presence on Facebook as a discovery and loyalty channel where brands engage in conversation before the sale and after, to create evangelists and give them an experience or story worth sharing; virtual currency / products; Understanding how socially powered search engine results will work for businesses that understand the opportunities; Social shopping

Email driven by

As methods of segmentation improve (in some cases by using social network data,) Targeting and therefore conversion is expected to increase.  Behaviour triggered emails become a normal part of every conversion optimisation plan.

However, note that the CAGR for email budgets is less than 1/2 that of mobile and only 1/3 of social as preferred contact methods will shift away from email and towards more informal or messaging channels.

Display driven by

Interactive banner Ads will fuel growth of this once stale ad medium:  http://sproutinc.com/showcase/demo-ad-showcase/  The increased engagement of these ads work in conjunction with retargeting technology to enhance web experiences that drive brand preference and advocacy.  Does this fall under the mobile or display budget? Or should Tablets full under the display budget?

Search driven by

Traditional search budgets are transferred to  Social Search (Open Graph,) contextual ads in Mobile Applications and also local search on mobile.

Conclusions

1. The Future CMO: Experience will have a bias towards leveraging digital media (as part of integrated campaigns) in international markets as more eyeballs move to mobile, pc or tablet,  and servicing a global audience becomes second nature.  Only then can an organisation optimally allocate resources, measure actionable KPIs and prioritise projects.
2. With the pace of technological change we will see increasing budget allocations for digital innovation to keep up with consumer habits, rather than just tried and tested methods.
3. Agencies offer increased coverage of mobile devices as part of their integrated campaigns.
4. More location aware advertising and loyalty marketing powered by social network platforms and designed with game mechanics.
5. SAAS ad creation toolkits and access to a global base of freelancing creatives opens up advertising opportunities to a larger base of businesses through reduced costs and increased talent.  We are in an age where ideas can be turned into reality, tested and scaled-up within 24 hours.