As society becomes more immersed in digital mediums with the evolution of technology, digital marketing is fast becoming an integral part of the functioning of businesses across verticals. Digital marketing broadly refers to the marketing of products/services through digital mediums, such as digital display boards, mobile phones, laptops, computers, and more. Using the internet, businesses can target a massive customer base through digital marketing, increasing their sales multi-fold. The expansion of the market for digital marketing can be credited to the versatility of digital marketing services and the benefits they offer to businesses.
Expansion of Digital Marketing Market
The global digital marketing market spend is currently estimated to be between $290 billion and $310 billion, and is expected to grow at a substantial compound annual growth rate (CAGR) of 12.8 percent to reach $330-$340 billion by next year. The growth of the digital marketing market is driven by an increase in mobile advertising spend in the markets of North America and Western Europe. North America is expected to continue dominating the market, accounting for nearly 40 percent of the digital marketing spend at a global level. In comparison, the market for digital marketing in emerging economies such as those in Asia is expected to grow at a rapid pace, with the digital marketing spend in APAC already surpassing that of Europe.
The development of smart digital advertising is making a major impact on the market by enabling customization of advertisements based on the device, location, internet speed, past history, etc, to provide relevant and personalized ads that are more likely to influence viewers. The display advertising spend in Western Europe is expected to be driven by the rising adoption of online advertisement slots through Real-Time Bidding. In the U.S. digital Out-Of-Home (OOH) media is emerging as a popular medium for digital marketing, for example through digital TVs.
Impact of Expansion Of Digital Marketing Market On Other Businesses
The expansion of the digital marketing market has made a major impact on other businesses, by changing the means of advertising and marketing that connect businesses to their target audience.
- Targeted marketing: With digital marketing, there is immense flexibility in terms of how to customize the mode of marketing to the target audience. Based on the target audience’s user trends and history, digital marketing can be personalized, resulting in a greater chance of success and forming loyal customers.
- Greater affordability: Earlier, advertising typically took place on a large scale so as to target the maximum number of people, and therefore required big budgets that were affordable mostly for big brands. In contrast, digital marketing is a highly cost-effective means of advertising and can be used to target more people or a more targeted audience in a more affordable manner. Since there is no expense for physical equipment such as hoardings or print ads, digital marketing can run sponsored posts, online ads, or other digital campaigns at very low costs. The effectiveness is maintained, and there is a greater chance of consumers making a purchase, without the business spending large amounts of money. Greater affordability of marketing and advertising levels the playing field for new businesses to make their mark in the industry.
- Two-way communication: With digital marketing, advertising and marketing overall no longer remains a one-way road where the business announces its services/products, as viewers can be provided an opportunity to respond directly. Most businesses, when engaging in digital marketing offer contact details so that consumers can reach out to them in case of any doubt. Even if the audience does not take proactive action, digital marketing can track and examine the response of the audience to the digital advertisements to gain insights into consumer behavior and adapt upcoming ads. For example, the time spent on an ad, the click rate, whether the viewer goes on to the website of the business; all minor responses are recorded can be taken into consideration when coming up with the next digital marketing campaign.
- Globalization: With the advent of the internet, the world has turned into a global village and companies are expanding beyond national borders to offer goods and services. Digital marketing is a convenient means to scope out the potential market in a region and establish a name brand, thereby lowering the risk of failure in a new region. Businesses can explore the demand and interest in a particular region which can help them in deciding how to proceed with setting up a branch in a new region.
The digital marketing market has been expanding at a rapid pace and has made a major impact on other businesses, by changing the common modes of marketing and advertising. Regardless of the field, digital marketing helps in creating brand awareness and connecting businesses with their target audiences in a cost-effective manner, while still delivering results. The growth of the digital marketing market and the role it plays in helping businesses, has made it an integral part of the business ecosystem.