Why Digital Channel

Marketing Benefits
Traditional Media
Buyers
TABLE OF CONTENTS

Introduction 03
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The Value of Digital 04

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The Duopoly of Facebook and Google (So Far) 05

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Mobile Commerce Driving Digital 06

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Investing in Paid Social 07

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Conclusion 09
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 Introduction

For decades, media buyers have allocated the majority of their budgets on traditional outlets, from newspapers to
television to billboards to radio, and more. That is changing. The explosion of digital media in every space of daily
life, from work to home to the car, is changing the relationship between advertisers and their audiences. Now,
advertisers can create two-way conversations with targeted audiences wherever they may be via mobile devices.
This dramatic evolution means that media buyers not only have more ways to introduce their brands to audiences,
but they can create new experiences to engage those audiences that were not possible in the past.

The inversion of digital in favor of traditional advertising took place this year when money spent on digital in the
U.S. surpassed that spend on traditional for the first time. According to eMarketer, a market research organization
based in New York City, companies will spend nearly $130 billion on digital ads in 2019 compared to $110 billion
on traditional platforms. More than two-thirds of digital spending will be for mobile devices, totaling more than
$87 billion.

Moreover, Forrester Research anticipates that digital marketing spend will reach $146 billion by 2023, a 9 percent
growth rate from 2018.

eMarketer forecasts that spending on digital will continue to outpace traditional at such a fast clip that by
2023, digital will represent more than two-thirds of all ad spending.

Conversely, ad budgets for traditional platforms such continue to decline, such as television where ad
spending will drop 2.2 percent this year to $71 billion.

With Google, and Facebook, the top two digital advertisers in the U.S., maintaining their dominant hold on ad
dollars, brands will adapt through emerging marketing paradigms like paid social, which has the clearest attribution
of ROI out of any digital channel. Because of the algorithms and real-time and multi-device nature of social media
platforms, paid social gives brands an unprecedented opportunity to amplify content to the right person, at the
right time, with the right message.

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 The Value of
Digital

As traditional media platforms become less prominent, digital channels have emerged that represent the dominant
platform for brands seeking to reach wider audiences. The value that digital platforms offer marketers is significant
for the following reasons:

Affordability. Compared to traditional media, marketing via digital tends to cost much less and offer greater
ROI, which makes it appealing for organizations of any size.

Easier to measure. Thanks to analytics tools embedded into most digital platforms, campaigns can be tracked
for their impact and measured for conversion rates, unlike traditional media where it may take weeks or
months to evaluate impact. Since people tend to sign into social media accounts on all of their devices, paid
social in particular offers robust cross device and multi visit tracking.

Easier to adjust. Insights gleaned via analytics tools give marketers opportunities to adjust messaging or
realign campaigns in on a daily or hourly basis if needed. Traditional media is not as flexible.

Brand flexibility. Marketers can create digital campaigns that build their company’s brand multiple ways: A
website, blog, thought leadership articles, videos, social media engagement, and more. The flexibility of digital
creates many entry points for users to get to know a brand and vice versa. Whereas traditional media
campaigns tend to be more unilateral in scope and engagement.

Ability to share. Part of that engagement is the ability to share content. Digital gives brands the opportunity
to create a multiplier effect for their content, which can improve sales and increase conversion rates for no
added costs. Here, users are transformed into brand ambassadors and can evangelize for brands simply by
sharing content with their own network.

Targeting. Unlike traditional media, digital algorithms give marketers the ability to target audience segments
based on multiple factors including gender, age, region, household income, preferences, their behavior on your
website and more, which increases the likelihood of sales and creates more efficiency for ROI. Now, instead of
talking to everybody, marketers can talk to those who are most likely to buy their product or service.

Global reach. Digital is global, so marketers can now reach consumers wherever they are in the world.

Greater engagement. Part of building an online reputation for brands is engaging with them in a more
authentic way that was not possible via traditional media. Digital breaks down that wall between consumers
and brands to create a two-way conversation. The result is a relationship that feels more like a partnership
built on trust and inevitably brand loyalty.

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 The Duopoly of
Facebook and Google
(So Far)

Now that we understand the value of digital marketing, who are the biggest players? Google and Facebook
currently dominate the digital market, collectively representing about 58 percent of all spending in 2018,
according to eMarketer.

Facebook allows businesses to target audiences through self-serve tools like Facebook Analytics that gives
them reports that track the performance of each ad.

Google Adwords allows businesses to have their ads run on Google's search results page. The ads look almost
identical to the normal search results. Google Analytics works with Facebook to measure conversions from
your Facebook ads. In other words, tracking where people are coming from before they land on your website.

However, eMarketer forecasts that by 2020, their share will drop slightly due to the growth of Amazon, whose ad
business is growing rapidly. In 2019, advertisers will spend over $11 billion using the site’s platform, which will
make a small dent in the market dominance shared by both Google and Facebook.

Driving the growth, particularly for Amazon, is the growing shift to voice-activated content on devices like the
company’s Alexa (and Google’s Assistant), which will become mainstream in five years. Forrester reports that
marketers will soon move from pay-per-click to voice SEO to capitalize on the voice devices.

So far, more than one-third of U.S. adults use smart home devices like Alexa and companies like Dominos, Capital
One, L’Oreal, and Humana are starting to incorporate voice search into their marketing strategies that go beyond
simply answering questions. Because consumers can start their journey with Alexa, which can then send them to
Amazon for purchasing, Amazon’s viability for digital ad spending is expected

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Mobile Commerce
Driving Digital

Another factor driving digital is the prominence of mobile. The widespread adoption of mobile devices, including
tablets and smartphones, and mobile integration in vehicles, has created new opportunities for marketers to reach
consumers.

Mobile Marketer reports that mobile ad spending rose nearly 40 percent in the first quarter of 2019
compared to the previous year.

Likewise, eMarketer forecasts that U.S. ad spending on mobile will reach $113 billion in 2020, making it the
leading platform for spending over television ($70 billion), radio ($14 billion), and print ($13 billion).

Soon, mobile devices will become the preferred platform for video ad placement, especially as high-speed 5G
networks are adopted in regions across the U.S. In fact, telecom tech company Ericsson forecasts that video will
drive mobile data traffic to 74 percent by 2023, up from 60 percent in 2018.

Clearly, the future of video ad spending will not be on desktop platforms but on devices that allow users to view
wherever they are at all times of the day.

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 Investing in
Paid Social

Paid social is the current investment opportunity for savvy marketing leaders at established brands shifting to
digital. Paid social involves sponsored, or paid, advertising content delivered on social networks in the form of
images, videos, carousel ads, etc.

Depending on the platform, ads can be targeted to users based on location, buying habits, or personal interests.
Unlike organic social, where these same users may not see this content, paid social directly puts your content in
front of users who will most likely show interest, and reach is inexpensive.

The nature of paid social means messages can be amplified, despite the noise of the larger social platform. Instead,
paid social gives marketers a direct window into the lives of users and their networks to drive leads, sales, or
website traffic. Among its other benefits are:

High level targeting. Paid social gives marketers the ability to create a lookalike audience that helps them
target users based on data that reflects offline buying behavior. The accuracy of this method means brands
can both expand and engage their most ideal audience at the same time.

Retargeting. Retargeting is about identifying users who showed interest in your product by visiting your site
or clicking on your social media posts and gently circling back to them to see if you can engage them in a way
that gets them to engage on a deeper level. Tools like Facebook Custom Audiences is ideal for approaching
Facebook users with ads that you know will pique their interest. Promotions, discount offers, free content are
all ways to potentially get them to spend more time with your brand

Market Insights. Analytics gives marketers information to determine which messages work and which
messages don’t according to different audiences.

Scale. Targeting via paid social can reach hundreds of millions of users a day.

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Paid Social Success:
New Balance Chicago

One example of many is how Matchnode used paid Facebook and Instagram ads to drive people into New Balance
Chicago retail outlets. After the company said it needed assistance with supplementing their traditional marketing
efforts with cost-effective digital tactics that showed clear ROI.

Over the course of a few months, Matchnode created multichannel online campaigns to drive in-store purchases
by implementing:

An initial digital campaign used Facebook Offers to deliver discount codes for in-store purchases.

Matchnode then used Unbounce’s new mobile-responsive landing pages to clone the national New Balance
website, but featured Chicagoland store locations and in-store only promo codes.

The next step was capturing email addresses as an upstream data point to better optimize campaigns.

New Balance Chicago’s email list grew. Matchnode also used Constant Contact campaigns to remind
customers to redeem promo codes in store.

The result: A 3.7 Return on Ad Spend (ROAS), meaning for every $1 that Matchnode spent in ads, New Balance
Chicago received $3.70 in revenue. New Balance Chicago also proved lifetime value by connecting to customers
invested in making repeat purchases.

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 Conclusion

Paid social has emerged as an essential tool for marketers because it gives them something they never had in the
past: The ability to create ROI in real time and to transform prospective customers into loyal consumers. No other
platform allows for such a high level of engagement and interaction.

For brands, the ability to amplify messages, improve visibility, and develop trust with users are some of the primary
benefits. Unlike traditional platforms, paid social also gives marketers an unprecedented ability to target audiences
via location, demographics, political affiliations, and more, to ensure that messages have the greatest impact. The
efficiency of paid social is in the speed in which marketers can find these audiences, and the ability to experiment
with messages to make sure they have the greatest impact.

Through paid social, brands can generate awareness, leads, followers, direct purchases, and more. As social media
evolves, its marketing possibilities will increase, giving brands more options to reach more of the kind of people
that want to be found.

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