Global annual spending on digital marketing is approaching $100 billion, a study by British consultancy firm Moore Stephens has found, Reuters reports.
In 2017, spending on digital marketing grew by 44 percent in the United States and Britain. Instead of relying on traditional marketing tactics, companies are reaching out to customers through search engine optimization (SEO), social media, voice-activated digital assistants, and online advertisement campaigns, employing so-called martech (Marketing Technology) tactics.
Traditional marketing agencies are, according to study author Damian Ryan, struggling to keep pace, and remain unable to adapt to the market.
“Clearly marketers are seeking to build in-house strength and are set to spend more on martech to remain competitive. Our research finds that this budget is coming from media spend and will have a resounding impact on the value of media-centric agencies,” Ryan said.
For the study, Moore Stephens surveyed more than 800 companies in Europe, North America, and the Asia-Pacific.
Results show that American and British companies spend 23 percent of their budgets on martech. In comparison, they spent 16 percent of their budgets on this form of marketing last year. Sixty-three percent of U.S. technology budgets were spent in-house in 2017, up from 44 percent in 2016.
European data protection rules that took effect in May, along with concerns over personal data and privacy protection, have effectively forced several major players in the industry to either merge or reduce spending.
“We’re at the beginning of the shakeout,” Ryan told Reuters.
Furthermore, according to the study, brands and companies don’t trust marketing agencies with data, so they are seeking control over martech.
“Against that, we can see that, at the upper end where brands are spending more, they are still working with agencies,” Ryan explained.
Corporations like the the British-Dutch consumer goods company Unilever have complained over fraud in digital marketing. In June this year, as the Inquisitr reported, Unilever took a public stance against online manipulation, announcing that it would be cutting ties with social influencers that buy followers.
According to the Unilever’s estimates, as much as 40 percent of social media influencers have bought fake followers at some point.
According to Forbes, the marketing industry is in a transitional era. New technologies have transformed — and continue to transform — it. Content marketing and Artificial Intelligence appear to be the future, while display advertisements are not nearly as effective as they used to be.
Simply gathering data is no longer all it takes. Overwhelmed by vast amounts of unstructured information, marketers will have to figure out a way to separate useful consumer insights from data waste, Forbes predicted.