10 Digital Marketing Trends for 2013

This blog posting is one of my favorite series, I’ve been posting a list of 10 digital marketing trends in ’11 and ’12.

So what’s expected to happen in 2013?

Brazil has the FIFA Confederations Cup in preparation for the ’14 World Cup, the US has a fiscal cliff to climb and together with the EU an imbalance on revenues and expenses to address.  The NFL has some skulls to crack to fix their concussions problems, those employed in the US will hire the unemployed in foreign lands (read more outsourcing), more foreigners will purchase US land, buildings, businesses and IP, and of course, VP Biden is the newly assigned czar on gun control.

IMHO, 2013 will follow Amara’s Law: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”

So here they are: The top 10 digital marketing trends of 2013.

10. Gamification – “All Play and no Work makes Jack a rich boy!”

9.  Cloud computing enables scalability to allow for new experiences in video games

8.  Digital Content across devices enables personalization that follows users across platforms

7.  TV is old.  It’s still king of the screens, but it’s content that folks want anytime, anywhere on all four screens. 

6.  The Smartphone begins its attack on plastic in mobile payments.

5.  Tag Management becomes a competitive imperative

4.  Users prefer mobile devices when reading magazines and shopping

3.  Social Media Mainstream and Niches continue to grow, especially in Emerging Markets except China

2.  Big Data will lead to consumer insights and smarter experiences at the speed of light

1.   The glory goes to the man in the arena and not their bankers and consultants.  

10.  Gamification – “All Play and no Work makes Jack a rich boy!”

So have you seen websites that try to encourage your behavior by offering you a little badge for doing something?  Foursquare gives you a badge when you check into the same place three times for example.  Dashlane offers badges when you save passwords in their password and credit card maintenance software, and Fitocracy makes working out with your friends a competitive game.  Users can Level Up by improving their bench press and earning a badge, post it to facebook and let the world know about their development.

As Daniel Pink will tell you in his book, Drive, human nature is best motivated by a sense of purpose, autonomy and self-mastery.  These types of immediate rewards for accomplishing small tasks might seem like it’s meant for grade school kids, but the data doesn’t lie.  Gamification increases engagement, helps users spend more time on site, and

that drives ad revenue and subscriptions since folks tend to develop a sense of being invested based on the recognition and the bragging they’ve done on social networks.

We’ve come a long way from that LinkedIn profile bar that showed 90%complete.

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ExactTarget Identifies the Digital Personas of Consumers

ExactTarget, a partner with Lima Consulting Group, describes a series of divergent personas that online consumers represent.

Accurate communication is key when interacting with customers. to make this connection, you must know your consumer; personalities, preferences, and most importantly, the online role the consumer is most identified with.

Below are a number of the more distinguishable profiles and online tendencies:

Family & Friends – Focused on family and close friend relationships—they’re not particularly interested in developing new online relationships.

Shopper – Shopping is the focus while online—but this isn’t limited to online transactions. Much of their time is spent researching future purchases. Think quality over savings with these consumers.

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The Value of CRT Positioning

Companies undertand the importance of  refining their CRT (click-through rates). This is because as the rates are improved with higher ranked keywords, the companies’ income can also greatly improve. Essentially, to determine the CTR, ‘number of visits’ is divided by ‘number of searches.’

In previous research, summarised by Chris Soames, an analysis of CRTs from Optify showed the importance of Page 1 and, in particular the top 3 positions.

Below are comparisons of Google click-through rates by position.

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Cross-Channel Digital Communications Are More Effective Than TV and Radio Spots

Responsys announced a lot of innovations last week at their annual conference.

The platform Responsys allows marketers to reduce their reliance on paid media by focusing on new school relationship marketing channels. It’s amazing to me how much companies spend to acquire traffic. About 95% of the budgets in the digital marketing space are spent on paid advertising. Yet every business consultant knows that you can gain a bigger lift in revenue by increasing folks already in your pipeline than by going out and acquiring new prospects at the mouth of the funnel.

And Responsys has case study after case study of folks that have done just that.

Southwest Airlines for example established a corporate wide focus on cross channel communications. They launched campaigns via email, text and retargeted advertising. Retargeted advertising

Retargeting is an online advertising technique that focuses only on people who have already visited your site.  Anyone who has visited your website will receive a small identifier on their computer (called a cookie).  When the user visits any website that has advertising on it, and where your ad has been placed on the major networks, then your ad will appear to those users.  It generally costs less than most advertising models and generally outperforms other advertising tactics.  Here are a few examples of the creative that went out via their platform.

And the results speak for themselves.

Southwest Airlines has over 10 million email subscribers, 1.7 million Facebook fans, and 1.2 million followers on Twitter, and tens of thousands mobile subscribers.

“Our number one transaction days used to be when we dropped a TV and radio spot. Now our number one transaction days are when we execute an email campaign coupled with a mobile and social campaign through Responsys.”

–Director of Marketing, Southwest Airlines

Companies are learning how to use cross-channel communications to increase engagement and have more meaningful dialogue with their customers. We think this is a good thing, both for companies that are prepared to stomach the good and the bad that comes along with the raw conversations that will happen once they open these channels, and for the customers that they serve.

Organizations prepared to stomach this type of change need to be sincere in their approach, be willing to have conversations in public view, and provide value beyond “brochure-ware.”

Facebook is a Bad Investment

We like Facebook for its internet marketing capabilities. But at a valuation of $100 billion, it’s definitely over-valued.

The world’s largest social media network only made $3.1 billion last year, with an income of about $1 billion – so that’s a valuation that is 100 times larger than its income.  And Facebook has 800+ million users, meanings its actual income is about $1.25 per user. But at the current valuation, the average user value is $125.

When thinking about the value of a user, it makes sense to look at media giants, like Disney, or CBS. After all, television is still king.  For instance, did you know that the average CPM for national television shows is about $15 – $30 per thousand? A TV commercial usually costs $150,000 to $300,000 per 30 seconds for national programs.  The most successful prime-time TV shows have a rating of 11.0, meaning they reach about 11% of all households in America (there are approximately 102 million households).

For the sake of argument, let’s assume that everyone in the US watches TV – that’s about 307 million folks. Let’s take a look at the major networks: Combined, Fox, NBC, ABC, CW and CBS took in approximately $21.7 billion in 2010 – a 5.3% increase over 2009, when they captured about $20.6 billion in ad revenue, according to ad-spending tracker Kantar Media.

So, the major players in the US market for television advertising took in $21.7 billion in revenue in 2010 (that’s the most recent number I could find using a quick Google search, but let’s face it, we know it didn’t grow more than a few percentage points at best in 2011). That values each user of the television industry (which, again, is all of us) at about $70.00. Does one website like Facebook really deserve more valuation than the entire TV industry?  We don’t think so.

Focusing on Content, Not Just Ads

For quite a while, the concentration in online analytics and tools to optimize results based on analytics revolved around ad optimization.  It was a world of sellers.  The focus was always on systems which could improve a company’s ability to recommend relevant products, increase conversions, and acquire traffic with increasing efficiency.  The solutions were skewed towards helping the sellers sell their ads, while putting less emphasis on the delivery of primary content.

“Your Ad Choices” and Self-Regulation in the Advertising Industry

On January 20 of this year, the Digital Advertising Alliance launched a campaign to inform the public about new forms of internet-based advertising, as well as ways consumers can protect their privacy online.  Called “Your A Choices,” it is one of the largest US-based campaigns about consumer privacy to-date.  Interestingly enough, “Your Ad Choices” was initiated around the same time the public debate surrounding SOPA and PIPA began to escalate.  Both these events have led consumers to think more about their rights online.

The “Your Ad Choices” logo first appeared in online advertisements last year.  It was introduced with one specific function: to serve as an advertising option button, which allows consumers to decide whether they want to watch online advertising based on their specific internet navigation activity.  This practice makes it possible for brands to offer their users ads that correspond as closely as possible with their interests – while also providing consumers the opportunity to opt-out.  This strategy is closely associated with the practice known as “Permission Marketing,” which is typically characterized by an emphasis on security, transparency, and user control, thereby promoting self-regulated best practices.

Self-Regulation in the Advertising Industry

The DAA is a strong advocate of self-regulation in digital advertising.  It develops and implements industry practices and rules of conduct, to which advertising professionals voluntarily submit.  But is there truly a need for such standards alongside economic regulation in the market, as well as legal regulation from the state?

Indeed, legislation is adequate to establish general principles (for example, that advertising should not be misleading); however, the protection offered in theory may not actually be available in practice – after all, the law is typically slow to respond to consumer protection complaints.  In contrast, self-regulation is specifically designed to proactively address the details and nuances of advertising content, and offers consumers a simple form of protection.  Self-regulation helps prevent actions that might cause harm or injury, as opposed to after-the-fact legal sanction, which seeks only to repair damage that has already taken place.  Thus, the form of self-regulation promoted by the DAA is not designed solely to benefit the online advertising industry, but also to protect the general public by incorporating the option of internet-based advertising.