Changing times for digital marketing service companies
I’ve been thinking a lot recently about the ever-changing landscape when it comes to online marketing and the services that entrepreneurs and corporations buy from digital marketing service agencies.
In recent times, many of you may remember the news about a number of corporations pulling advertising dollars from YouTube, leaving various YouTube content creators very upset about declining revenue, and I’m sure Google and YouTube weren’t happy. . about the situation either.
Then I read that Proctor & Gamble, a major global digital marketing investor, recently cut more than $140 million in digital advertising due to ineffective online ads. Why did they say that these ads were ineffective? The top two reasons cited were that many of their ads ended up attached to content of objectionable quality, meaning that YouTube couldn’t discern which channels were good places to place these ads, and companies got their names and ads associated with the content. they did not want to be related in any way. And second, many of their ads fell into channels and places where “bots” were looking at the ads instead of human eyes. And the bots don’t spend money on products, so these ad dollars were just thrown away.
The funny thing was that after these ad cuts happened, these corporations saw virtually no loss in sales or business growth. The only thing that changed was the increase in the effectiveness rate of ad spend relative to sales.
In March, JP Morgan Chase reduced the 400,000 sites it had allowed to place ads on to just about 5,000 pre-approved sites, and as its chief marketing officer, Kristin Lemkau, quoted to the New York Times: “We haven’t seen any deterioration in our performance metrics “since the change”.
In recent years, we’ve seen corporations steadily move away from spending money on TV advertising and move to digital advertising because, frankly, there were so many more leads to be had per dollar spent online. Many digital marketing companies enjoyed spectacular growth in just a few years due to this windfall of money to spend on media.
For a time, it was a pipe dream, but now corporations are learning, as the examples above show. Now they’re creating the statistical charts and graphs they need to show their management teams how effective their media spend is. And now they can discern where their investment isn’t and dig into those stats to find out why, which is why they’re now seeing these types of write-downs happening across the corporate landscape and statements. being made as to why the cuts are occurring.
To get the media spending capital of these corporations today, it is becoming increasingly clear that digital marketing services companies must be prepared to show statistical evidence that the money spent will deliver the intended financial returns. And as a marketing company, you’ll need to be able to start answering questions about how you can manage your funds so that real people and not bots see the ads that are placed and that the ads are placed in quality places, sticking to quality. happy. If you can’t, you may end up being cut off just like the 3,500 websites that had profited from the JP Morgan Chase ads.
In short, it is getting harder to be a digital marketing company and it will get even harder. Online marketing services companies will have to do more due diligence as they find places to spend corporate advertising budgets. And more due diligence means more work that will reduce profit margins. However, if you want to stay in business long-term, it’s something you’ll need to be good at. Those that do will get additional business from advertising companies that don’t.