eCommerce Advertising: What’s the Road Ahead?

Ah, the good ol’ days of 2019. When the grass was green. When the sun was shining. When you could depend on Facebook advertising.

As you know, there have been tsunamis of change in the digital ad space since then: most significantly, moves by Apple (e.g., iOS 14) that decimated Facebook marketing. Unfortunately, more challenges are on the horizon, once Google phases out third-party cookies in 2024. 

… but let’s cross that bridge later this year.

Right now, you shouldn’t abandon Facebook entirely—it remains a powerful eCommerce advertising platform (although it requires a more data-driven approach). 

However, the days of allocating most of your marketing spend to Facebook are officially over.

What does this mean? 

It’s time to ID new channels for customer acquisition

What does the future of digital marketing look like? There’s no single answer in the post-Facebook advertising world. 

Every brand is going to have to test different channels and ad creatives to evaluate what’s most effective for acquiring new customers.

In the near term, we think that the three marketing channels that brands should explore are: 

1. TikTok
2. YouTube and Google paid search
3. The “oldies but goodies,” i.e., direct mail, affiliate marketing, and content marketing 

As you go through this restructuring process, collecting and analyzing your data will be essential. 

In fact, you can’t be successful in your efforts without data. Fortunately, Daasity can help you more easily manage and analyze your data across all the digital marketing channels you test to evaluate their performance via marketing attribution and help you determine how to most effectively allocate your spend. 

Determine your strategy

How should you reallocate your budget? It depends. Before deciding to test a new channel, think about your business and marketing strategy.

Each channel is different from Facebook and very different from each other. The marketing channels you choose will depend on factors including:

• The type of product/service you sell: Commodity vs. differentiated, impulse buy vs. luxury, etc.
• Sales cycle: How much education or nurturing do you need to do?
• Brand maturity/business stage: Can you invest in longer-term marketing strategies, or do you need cash yesterday?
• Level of current intent volume: Are consumers searching for key phrases that are relevant, or is there low search volume for your category? Do you need to generate demand?
• Balance of acquisition versus retention: How many new customers do you need to bring in each month to stay profitable?
  

Make YouTube a go-to platform

YouTube will be a major focus for eCommerce brands, startinnnnggggg.....now.

Eighty-one percent of all Americans have used YouTube. Sixty-two percent say they visit YouTube daily and 92% weekly. Whatever demographic you’re targeting—you’ll find them here.

This broad reach makes YouTube a good alternative to Facebook for building awareness and customer acquisition. You have two basic choices: marketing content and advertising content.

Consumers want marketing content videos. In fact, 70% of Millennials say they trust brands with videos about their products more than those without. Marketing content engages, builds trust, helps consumers solve problems and can include: 

• Product videos
• Demos
• Explainers or tutorials
• Behind-the-scenes footage
• Case studies
• Customer reviews or testimonials 

Your other option—YouTube ads—have a lot of flexibility in terms of ad types and creative possibilities. You can target audiences by demographic, interest or intent. If you can, it’s smart to test a combination of ad types, lengths, and creative and track what is most effective for different audiences and for your brand. Keep tabs on trending videos on what’s Popular Right Now and find inspiration by browsing the ad leaderboards.

Regarding ad formats, in order from least expensive to most, your options include:

• Discovery/in-feed ads: Think of these like a hybrid of display and traditional social ads that can show up in multiple places, including YouTube feeds, Gmail and the Discovery app.
• Bumper ads: Non-skippable six-second ads that appear before a video; pay per impression/CPM.
• Skippable in-stream ads: At least 12 seconds but no more than 3 minutes, these are more “traditional” ads at a more affordable price (especially for testing) because you pay only if the viewer watches more than 30 seconds; can run pre-, mid- or post-video.
• Non-skippable in-stream ads: These are your typical 15-second ads, closest to what you’d see on TV; can run pre-, mid- or post-video; viewers must watch the entire ad before going to the video.

Note that production cost for the highest-quality YouTube ad is in the $50-75k range, but you can create great ads for a fraction of the price. Create ads with video editing software so we can create a fast and easy way to create ads using existing presentation templates and video collages.

Because of its affordability, YouTube seems to be the bridge right now between social media/TikTok video advertising and Connected TV advertising (which we’ll get to below, so keep reading).

Get strategic with Google eCommerce ads

Hang up your social media marketing hat for a minute. 

With Google paid search, the focus shifts from demand generation to demand capture. It also shifts from demographics to intent:

• Social media: Select the audience (e.g., parents under 40 with infants)
• Search advertising: Select key phrases people are searching with (e.g., “when can my baby eat solid food”)
  

Google Shopping ads made up 58% of total Google paid search in Q4 2021 according Merkle’s Digital Marketing Report, and they can be more cost-effective than paid search/text ads: shopping ads cost per click (CPC) increased just 6% in Q4 compared to 20% for paid search/text ads!

Explore “old school” marketing tactics

Tried-and-true old school tactics are becoming cool again. There are a number of channels and strategies (that fell out of vogue when Instagram and influencers really popped) that are now getting revamped.

Brands are finding some quick wins with tactics that currently aren’t as competitive, such as direct mail, affiliate marketing and content marketing.

Direct mail

Direct mail can be a smart addition to your marketing mix. It typically has a higher response rate than email (2.7-4.4% vs. 0.6%) and research shows it lifts overall response rates when part of a multichannel campaign. 

Direct mail—printed flyers, postcards, catalogs—aren’t thought of as “junk mail” by younger generations (junk mail=email spam). In fact, since most of us get so little physical mail these days, many consumers say they’re excited to check their mailboxes.

Also, there are new tools powering “old” direct mail. Automation and segmentation tools, such as Postpilot and Postie, that integrate with your tech stack (similar to what’s available for email, e.g., Klaviyo) make creating, producing and sending direct mail—including drip campaigns—streamlined and cost effective.  

Affiliate marketing

Think “influencer marketing before Instagram” or “influencer marketing with a blog” and that’s affiliate marketing. 

Essentially, brands partner with a third party (website, blog) that displays an eCommerce ad or writes content that endorses a brand. It links back to the brand website or landing page (which can be tracked with eCommerce affiliate software), generating leads for the brand and a commission for the affiliate.

Revenue generated by affiliate marketing has been increasing. Some categories show 100%+ YOY growth from 2019 to 2020. As you might expect, affiliate marketing spend has increased as well–to an estimated $8.2 billion in 2022 from $5.4 billion in 2017.

Content marketing + SEO

The goal of content marketing, a subset of inbound marketing, is to strengthen customer relationships and build your brand by engaging target audiences with valuable or entertaining content. 

A variety of content, including blogs, bylines, infographics, videos, etc. can be used for both acquisition and retention, building awareness and then keeping customers coming back for more. 

It's important to note that creating unique content for content marketing is a long-term investment that requires time, budget, and checking for plagiarism.

But it also can be the gift that keeps on giving. High-quality, evergreen content can have a long shelf life and continue to work to build your site’s authority over time.

The future of digital marketing

Taking a longer look into the future, beyond the channels we’re familiar with today, what’s coming next? We’re keeping an eye on a few future trends in digital marketing we think could be interesting for eCommerce brands: Connected TV, gift messaging apps and brand microsites.

Connected TV advertising

Brands are now able to buy eCommerce ads (that consumers can’t skip) on three major connected TV players; Hulu, Roku and Amazon’s Fire TV .

Be prepared to spend a gorgeous penny, though (that’s a lot more than a pretty penny).

These ads are bigger investments with more scripted ad sets that don’t always have a direct link to click to the website. But larger brands with bigger budgets ($30-50k per ad) may want to start experimenting with these types of eCommerce ads as a way to build brand awareness and drive intent. When your ads run, you can track increase in search volume based on ad content.

Gift messaging apps

We’ve been seeing some brands experiment with gift messaging apps, like Giftnote, which are interesting “two-fer” tools that enable you to collect the customer information of the gift giver, as well as the recipient.

Here’s how they work:

When you buy someone a gift, you pick something and pay for it. Instead of you filling out the shipping address information, a message is sent to the recipient. The recipient must enter their contact information, but also can make sure the gift is right for them (e.g., they can adjust the color, size, etc.), reducing the rate of return. 

The brand can follow up later with both the giver and recipient with additional marketing messages.

Brand microsites

These are still mostly under the radar but offer an interesting twist on affiliate marketing. 

We’re seeing some new apps that enable influencers or affiliates to easily build their own curated microsite of their favorite products from a brand (“My top 10 picks”), which they can link to from their social posts, website, blog, etc. 

Although the microsite is hosted by the brand, it feels authentic to the influencer/affiliate because it has a different URL and looks like it’s the affiliate/influencer’s content.

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