With automotive manufacturers having such a great marketing budget to play with, it comes as no surprise that figures from Google’s Car Purchasing UK Report in April 2017 reveal £115.9 million was invested in by car dealers alone. The online display and direct mail campaigns by car dealers in the UK, in 2016 alone isn’t something that companies with smaller budgets can compete with. With increased interest in online platforms, digital visibility doesn’t come cheap — but is it worth the cost? Audi dealership, Vindis, investigates.
Google released their Drive To Decide Report in association with TNS in which they discuss how today’s auto shopper is more digitally savvy than before. Over 82% of the UK population aged 18 and over has access to the internet for personal reasons, with 85% using smartphones and 65% choosing a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep ahead in the game, a digital transition is vital to their success.
The report also revealed that 90% of auto shoppers carry out research online. It quotes 51% of buyers starting their auto research online, with 41% of those using a search engine. Car dealers must therefore think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets, in order to capture their potential market’s attention early in their search.
According to eMarketer, the automotive industry accounted for 11% of the total UK Digital Ad Spending Growth in 2017, placing the industry in second place behind the retail sector. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.
The majority of car purchases still take place on the forecourt so how is the internet influencing their decisions? 41% of shoppers who research online find their smartphone research ‘very valuable’ and 60% of shoppers said they were influenced by what they saw in the media. 22% of the latter were influenced by marketing promotions.This is the proof that online investment into digital advertising is worth the outlay.
The most invested forms of marketing for the automotive sector is still TV and radio advertising although in the last past five years, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.
Online sales in the fashion industry reached an impressive £16.2 billion in 2017 and this figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?
In December 2017, according to the British Retail Consortium, ecommerce accounted for nearly a quarter of all purchases. We continue to see online brands such as ASOS and Boohoo embracing the online shopping phenomenon with ASOS experiencing an 18% UK sales growth in the final four months of 2017, and Boohoo reporting a 31% increase in sales throughout the same period.
Big brand names including Marks and Spencer, John Lewis and Next have invested millions into their online operations and marketing in a quest to capture the online shopper and drive digital sales. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations, clearly expecting this to be a positive move to drive their profits back up.
Shoppers no longer want to go to the high-street store to shop – instead preferring being able to conveniently shop from the comfort of their homes or smartphones rather than in traditional brick and mortar stores.
According to PMYB Influencer Marketing Agency, 59% of fashion marketers increased their budget for influencer marketing last year – an essential marketing tactic in the fashion industry. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy.
More than a third of marketers believe influencer marketing to be more successful than traditional methods of advertising in 2017 – as 22% of customers are said to be acquired through influencer marketing.
With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.
More and more consumers are now turning to comparison websites when it comes to choosing the right utilities supplier in search of the best deals. The websites could be the key to many suppliers acquiring and retaining customers.
The four largest comparison websites – Compare the Market, MoneySupermarket, Go Compare and Confused.com are among the top 100 highest spending advertisers in the UK, but how does that marketing investment reflect on the utility suppliers themselves?
Comparison sites can be the difference between a high rate of customer retention for one supplier and a high rate of customer acquisition for another. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?
British Gas has shifted its marketing aims toward customer retention as opposed to customer acquisition. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.
An investment of £100 million is to be invested in a loyalty scheme to offer discounted energy and services. This turns the focus on the value of a customer, their behaviour and spending habits over time, in order to discover what they are looking for in the company. In such a competitive sector it is vital for companies to invest in their existing customers before looking for new customers.
The utilities sector has also cut itself a slice of the digital cake, as 40% of all searches in Q3 2017 were carried out on mobile, and a further 45% of all ad impressions were via mobile too – according to Google’s Public Utilities Report in December 2017. 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.
The healthcare sector is restricted by heavy regulations and so runs by its own completely different set of rules for marketing. As a result, the same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, it might be surprising to learn that email marketing is essential for the healthcare industry’s marketing strategy.
Approximately, 2.5 million people use email as a primary means of communication, rising in value and usage over the past few years so this means email marketing is targeting a large audience. As a result, 62% of physicians and other healthcare providers prefer communication via email. Now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.
Online marketing is another platform that is a worthwhile investment for healthcare, especially when you consider that one in 20 Google searches are for health-related content. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP.
Pew Research Center data shows 77% of all health enquiries begin at a search engine – and 72% of total internet users say they’ve looked online for health information within the past year. 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.
Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected and is a form of marketing that can and has been utilised effectively. 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.
So, is it worth the investment?
The answer is, it depends. For industries such as automotive and fashion it is evident that online marketing investment is critical to company performance. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.
However, for others, such as utilities, there is far more to consider. Whilst TV and digital appear to remain the main sales driving forces, its more than just creating your own marketing campaign when comparison sites need to be taken into account. Without the correct marketing, advertising or listing on comparison sites, you could fall behind your competitors.
According to webstrategies.com, the average firm in 2018 is expected to allocate at least 41% of their marketing budget to online strategies – with this figure expected to grow to 45% by 2020. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.
So, what is our verdict? Well, if mobile and online usage continues to grow year on year at the rate it has been, we forecast the investment to be not only worthwhile but essential to business success.