In 2016 alone, £115.9 million was invested in direct mail and online display campaigns by the UK’s car dealers. This is according to figures which were published in April 2017 as part of Google’s Car Purchasing UK Report.
There’s a substantial marketing budget available to automotive manufacturers, but this is not the case for all companies as they look into marketing campaigns. Digital visibility isn’t a cheap option either, especially due to interest in online platforms increasing all of the time. Here, Volkswagen dealership Vindis takes a look at whether the return on investment will be worth the cost…
The automotive industry
A discussion about how auto shoppers are more digitally savvy than they were in previous years formed a part of Google’s Drive To Decide Report, which was created in association with TNS. It was found in this report that over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% use smartphones and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.
Research is also carried out online by 90% of auto shoppers, the same report goes on to reveal. 51% of buyers actually start their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.
The automotive sector accounted for 11% of the total UK Digital Ad Spending Growth during 2017, according to research from eMarketer, which places the industry in second position and trailing only that of the retail sector. What’s more, the automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.
Most car purchases still occur on the forecourt of a dealership though. So, how is online influencing their decisions? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working.
The most invested forms of marketing within the automotive sector continue to be the traditional methods seen on TV and heard on the radio. In the last past five years, however, it is digital that has made the biggest jump from the fifth most popular method to third, seeing an increase of 10.6% in expenditure.
The fashion industry
Fashion retailers simply should not ignore online investment when they are looking for success. After all, online sales in the fashion industry reached £16.2 billion in 2017! This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?
According to the British Retail Consortium when analysing figures from December 2017, ecommerce made up close to a quarter of all purchases — helped along by online brands like ASOS and Boohoo continuing to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.
John Lewis, Marks and Spencer and Next are among the well-known brands to have invested millions into the online operations and marketing techniques, as they strive to drive digital sales and capture the interest of the online shopper community. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.
The high-street is no longer the place that shoppers want to venture to in order to complete their shopping sprees. Instead, they now like the idea of being able to conveniently shop from the comfort of their home, or via their smartphone devices whilst on the move.
An essential marketing tactic that has emerged in the fashion sector has been influencer marketing. 59% of fashion marketers increased their budget for this technique last year, according to the PMYB Influencer Marketing Agency. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy.
When compared to traditional methods of advertising in 2017, over a third of marketers said that they believed influencer marketing will be more successful – as 22% of customers are said to be acquired through influencer marketing.
The healthcare industry
As the industry is generally restricted by heavy regulations, an entirely different set of rules for marketing is applied to the healthcare sector. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.
Email is the primary means of communication for around 2.5 million people currently, with this technique growing in both usage and value in recent years. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.
Those in the healthcare industry should also consider online marketing as a worthwhile investment. This is especially the case when you consider that one in 20 Google searches are for health-related content. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP.
A search engine is the starting point for 77% of all health enquiries, according to data from the Pew Research Center. 72% of total internet users say they’ve looked online for health information within the past year too. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.
Social media marketing should be looked into across the healthcare sector as well. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.
The utilities industry
Comparison websites are being used by more and more consumers as they find the right utilities supplier for their requirements. These websites could be the key to many suppliers acquiring and retaining customers.
Millions of pounds are being spent by comparison websites on TV marketing campaigns, which then get watched by a huge number of people across the country. Therefore, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.
Compare the Market, MoneySupermarket, Go Compare and Confused.com are the big four comparison websites at the moment, with the quartet featured within the list of the UK’s top 100 highest spending advertisers. However, does that marketing investment reflect on utility suppliers?
To answer this, consider that comparison websites could hold the key when it comes to the difference between a high rate of customer acquisition for one supplier and a high rate of customer retention for another firm. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?
Customer retention over customer acquisition is a marketing aim for British Gas. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.
Through a £100 million investment, the firm has ambitions to create a loyalty scheme that offers discounted energy and services. This initiative focuses on the value of a customer, their behaviour and spending habits over time to discover what they are looking for in the company. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.
Those across the utilities sector are also realising the benefits of being digital. 40% of all searches in Q3 2017 were carried out on mobile, and a further 45% of all ad impressions were via mobile too – according to Google’s Public Utilities Report in December 2017. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.
Understanding whether marketing will be worth the investment
It goes without saying from the information above that investment in online marketing is now critical for the likes of the fashion and automotive sectors. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.
The picture is on a grander scale for some industries though, including the utilities sector. Whilst TV and digital appear to remain the main sales driving forces, it’s more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.
In 2018, research from webstrategies.com predicts that the average firm will allocate a minimum of 41% of their marketing budget to online strategies. This figure is expected to grow even more to reach 45% by 2020. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.
You may find yourself questioning whether the investment will be worthwhile for your specific company or the industry that you’re working in. However, if mobile and online usage continues to grow year-on-year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.