How to achieve a ROI on marketing spend
The automotive industry has a notorious budget to play with when it comes to budgeting for their marketing campaigns. With increased interest in online platforms, digital visibility doesn’t come cheap — but is it worth the cost?
According to Google’s Car Purchasing UK Report that was released in April 2017, £115.9 million was invested in online display and direct mail by car dealers in across Britain in 2016 alone — backing up our claims of high investments.
1. Automotive
More people are using smartphones, especially in regards to researching a product — Google’s Drive To Decide Report found that 65% of people prefer accessing a smartphone on the go. These figures show that for car dealers to keep their head in the game, a digital transition is vital.
Figures from the same release found that 90% of people conduct research on their device beforehand too. 51% of buyers starting their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must 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.
eMarketer found that the automotive sector contributed 11% of the total UK digital ad spend in 2017. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.
But as sales are completed in the dealerships, how are online strategies performing? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working.
Over the last five years, the automotive sector has increased expenditure by 10.6% in a bid to increase online visibility — however, it must be noted that television and radio advertisements still remain their most invested channels.
2. Fashion
Fashion brands are continuing to invest in online methods too, with news that sales online reached £16.2 billion in 2017. 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?
Almost a quarter of all purchases made in December last year were from ecommerce options; showing that brands like ASOS and Boohoo are moving in the right direction. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.
In a bid to drive digital sales and capture their desired market, more brands are beginning to set higher budgets. 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.
Online shopping gives consumers the opportunity to browse at their own rate; and make purchases when and where they want — leading to the death of the high street store.
More marketers are beginning to invest in influencer marketing too. 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.
3. Utilities
Comparison websites are on the rise, and this has been a shock to the system for utility companies — but they can use this to their advantage in terms of profitability. 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.
From Compare the Market to Confused.com — the four largest comparison websites have made the list of top 100 highest spending advertisers in the UK. 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?
One company to be aware of is British Gas — who are looking to retain customers rather than acquire. 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.
With 40% of searches and 45% of ad impressions in Q3 2017 being on a mobile device, we can see that those working in the utility sector are considering the digital transformation. 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.
4. Healthcare
There are many more restrictions put in place when it comes to marketing the healthcare sector. 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, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.
Email is becoming a more common method of communication too, with 2.5 million users. 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.
Not only that, one in 20 Google searches are to find health related content — showing that this is an area that should be focused on. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP.
With this, it’s important to understand that 77% of health questions start at the search engine; and this is conducted on a regular basis. 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. 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.
Determining your investment type
Online marketing is a must for both the automotive and fashion sector according to Vindis, VW service providers. 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.
On the other hand, utility companies should be looking at the power of comparison websites and how this can develop their brand to a larger audience that already has a key interest in their service. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.
Companies are expected to allocate 45% of their marketing budget to online methods 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.
If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.