CMOs are shifting focus to digital media
The last few years have seen a dramatic change in the way consumers are consuming content and the way marketers are marketing and advertising. As consumers are gradually abandoning their spending on print media and shifting focus to digital media, marketers and advertisers are also following in line with the changing consumption patterns.
McKinsey research says that US consumers doubled their spending on digital newspapers in the past seven years, while halving their spending on print newspapers. The changing consumer habits and buying patterns have prompted marketers also to rethink their strategies. According to the CMO Survey, 44 percent of marketers in the US now allocate at least half of their marketing budgets to digital media, up from only 31 percent in 2009.
“We’re already seeing that direct mail and newspaper circulars are playing a diminished role in retail marketing. Mass advertising will not disappear overnight, but its influence is certainly waning,” says a McKinsey report.
In comparison to traditional advertising, the digital media offers far greater scope for personalized ad campaigns, believe market experts. Digital channels of advertising are generally built around predictive models and are powered by sophisticated algorithms. This makes it easier to analyze consumer habits and keep track of changing trends in the market. Statistics show that 35 percent of what consumers purchase on Amazon and 75 percent of what they watch on Netflix come from product recommendations based on such algorithms.
Company-directed marketing is also competing for attention with peer recommendations through social networks, user reviews, and the like, says McKinsey. “Our research shows that for the average consumer, peer recommendations carry ten times more weight than recommendations from salespeople. Indeed, social media could well make up 22 percent of marketing budgets in five years as retailers increase their spending to facilitate and influence peer connections about brands through paid ads and branded pages on social-media platforms,” it says.
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