There has always been great potential for brands to thrive through ecommerce and digital marketing. Sadly, this potential has been held back at times by high thresholds for participation and other barriers. The COVID-19 pandemic, however, has lowered thresholds and reduced common barriers, leading to an increase in ecommerce and digital marketing activities. In fact, a recent study found that it accelerated the shift to ecommerce by five years. Some of the reasons companies expanded their digital marketing budgets in 2020 include:
- Digital transactions became a norm among consumers in 2020.
- There has been a huge growth in digital platform usage for marketing.
- More brands have been forced to pivot their social and economic postures in response to this growth.
- Alternative marketing channels that were based on face-to-face interactions aren’t as widely available as before. This freed up funds that could be diverted to digital marketing spend.
All signs suggest that the trend will continue unabated. Which raises the question, how should you allocate your digital marketing budget in 2021? There are multiple marketing channels you can use, from social media to search ads. Depending on your industry, certain channels will be more effective for your brand than others.
Here is what you should know about how brands are budgeting for their marketing campaigns in 2021:
How Brands Have Adjusted Their Budgets
Many brands realize that they can target and engage consumers through non-traditional channels. Most have been shifting from traditional paid search ads to paid search and display campaigns. There has also been a change in how they split their digital marketing budget on social sites. Prior social ad buys were targeted at top-of-the-funnel goals like creating brand perception through social responsibility and product awareness.
Brands are now focusing their digital marketing spend on social sites towards end-of-the-funnel goals. This includes spending on purchasing-oriented ads through consumer social channels, mobile, email, and shopping feeds. They have also been more open than before when it comes to engaging with more content producers and influencers. Lastly, most have been leaning towards using social-friendly video content in their advertising.
Video Marketing is All the Rage
With people having more time on their hands than they know what to do with, it shouldn’t come as a surprise that video marketing has caught traction. In fact, the average consumer is expected to watch 100 minutes of online video content per day in 2021. Even better, 72% of consumers prefer video over text content when learning about a product online. If you want to thrive in 2021, video marketing should be in your digital marketing budget, and working with ecommerce platforms that support it is a necessity.
Since most publishers support video content nowadays, brands have been focusing on video marketing beyond YouTube and other conventional streaming sites. The trick is to create highly social content. These are videos that are short and digestible and can be used across different platforms. Producing such content typically costs less and leads to more engagement. If a brand is creating long-form videos that require a bit of explanation, chances are they will need to create different versions of the same to be used on different platforms.
What You Should Know about Different Video Marketing Platforms
Learning what to expect from the different platforms could help guide your digital marketing spend on video content. YouTube video marketing costs have risen over the years, though it remains a valuable marketing platform. TikTok is a more affordable platform compared to both Instagram and Facebook. You could find yourself spending two to three times less on TikTok than on Facebook and Instagram for the same campaigns.
Since engagement rates are comparatively high on TikTok, including it in your digital marketing budget could be wise, especially if its audience is relevant for you. Facebook and Instagram keep diversifying their video content format and advertising opportunities. Although the two are costlier on a CPM (Cost Per Thousands) basis than TikTok and YouTube, they are more transactive.
How to Split Your Budget between These Platforms
The ideal budget will differ for each brand depending on how much they can spend, their target demographic, and the kind of content they produce.
- The Content Engagement Factor
Instagram, Facebook, and YouTube are typically easy to create content for. Brands have already included them in their ad strategy, making it easy for organizations to handle increasing marketing spends or changing ad strategies.
TikTok, on the other hand, is a little tougher to create content for, especially considering that it is a newer entrant than the others. Brands need to establish a cadence of increased organic engagement to provide on-platform touchpoints for ads and to hone their audience. Failure to do this could be a huge barrier to entry on the ad front of the platform.
- The Demographic Factor
Channeling your digital marketing budget to Facebook and Instagram will expose your brand to almost every demographic — young, old, and everything in between. People of all ages have social media profiles or accounts. TikTok is often miscategorized as a platform for the younger generations, but it can be a viable platform for brands with consumers up to the age of 45.
While the younger generations dominate TikTok, the older generation is still present. The latter uses the platform mainly for consumption, while the former uses it for production and consumption.
Part of the reason why the older generation is still present in the platform is the aspirational way people browse social platforms. In fact, 38% of global consumers are aspirational — you should take this into consideration when developing your digital marketing budget. Users are interested in content that showcases lifestyles that are younger and more interesting than theirs. This helps make TikTok relevant for older generations.
What the iOS 14 Update Means for Advertisers
Apple recently decided to offer iPhone users the option to opt into specific types of data tracking and sharing from apps on their devices. Since most Instagram and Facebook users are already using apps to help navigate content and advertising on their phones, it is expected that the majority will opt out of having their personal information shared through these apps.
This will result in these social sites not having enough information to show users targeted ads, which could impact your digital marketing budget. Ads will still be present on the platforms, but they won’t be as targeted as before. The brands that will be most adversely affected by this measure are those that rely on the information shared by mobile devices to personalize their ads.
However, there are still options for collecting data to create buyer personas and target ads. Email addresses and phone numbers will still be accessible post-iOS 14. Brands that are running their Facebook ads based on Facebook’s standard events don’t have as much to worry about, as they will be minimally affected by the change.
What About Paid Search Ads?
Search engine ads are still alive, and they can work well for the right brand, especially if they simultaneously embrace SEO best practices. How much brands should spend on search ads depends on the brand. Probably the biggest change in search ads was Google allowing businesses to list their products on Google Shopping free of charge. This essentially reversed the ad-only format it had moved to a few years ago.
Most businesses already have a Google Ad strategy and have already committed a portion of their digital marketing budget to it. While it might be tough to see drastic changes in the percentage of digital marketing spend on Google Ads, most brands will typically spend more on other platforms as they experiment with different strategies.
Choosing Between Social and Search Ads
Search ads are ideal for brands whose customers already know something about their product. Social ads are great for businesses that have an already defined target audience. If you feel that your customers can describe your product in a few words or less, opt for search ads. If you can easily describe your ideal customer, focus your digital marketing budget on social ads.
Research is Everything
Digital advertising is an essential boost for your business. The extent to which you understand your ideal customer will determine the success of your marketing campaigns. Commit to defining your customer and their psychographic data to embrace a more personalized approach.