Global crises, like the one we’re seeing in COVID-19, act as accelerators of change. 2020 is the new 2030, and trends that were evident before have converged in a perfect storm. This is very much the case from a digital marketing perspective. We were already teetering on the edge of a new era in digital; businesses were becoming increasingly data-driven, programmatic advertising had seen explosive growth, and Facebook and Google were continuing to take market share of digital ad spend.
Media agencies were facing pressure from in-housing and competition from consultancies, a situation compounded by their clients’ increasing expectations around return on advertising spend (ROAS). As Greg Lyons, PepsiCo’s North America CMO, put it in a recent Business Insider interview, “it’s very difficult to be an agency right now.”
COVID-19, and the huge spike in e-commerce sales we’ve seen off the back of it, have massively accelerated these trends. Following the UK’s first full month under lockdown, online sales hit a ten year high in April, up by almost 24% year-on-year. As more businesses make the switch to online-only mode, the online advertising space has become more competitive than ever before.
With change comes opportunity
Regardless of whether you manage your paid media in house or via an agency, market dynamics have shifted. This presents marketers with a unique challenge, but also a unique opportunity. Some of our customers at Peak have told us that they’re seeing completely different purchase behaviors across global markets, presenting unique customer acquisition opportunities like never before.
Digital marketers are now having to deal with a wide range of new problems and challenges. We’re seeing dramatic shifts in marketing budgets, unpredictable PPC keyword bidding, a rapid rise in social media ad spend and increased competition and costs across the board. In order to succeed, you need to have the right digital marketing technology to adapt to this changing landscape.
Simply put, you need to adapt quickly. If you aren’t able to adapt to market changes, someone else will.
The role of artificial intelligence (AI)
Your optimization needs to work smarter and respond rapidly in order to maximize opportunities as they arise, and propel your digital strategy to a superior plane. The key ingredient to achieving this is your business’ own data – data which Google and Facebook don’t have access to.
That’s why Peak has developed Ad Optimization, an AI-led marketing solution. By leveraging your data to continuously monitor campaigns 24 hours a day at a granular level, getting smarter over time, it’s built to increase the ROAS of your paid campaigns – allowing you to focus on strategy.
It’s evident that the industry is dominated by the Google and Facebook duopoly, and to an extent these powerhouses have businesses over a barrel in terms of ad spend and campaign success. AI presents businesses with a unique opportunity to put the power of advertising and customer acquisition back in their own hands.
Some of our customers are implementing AI into their advertising to great effect. For instance, in recent weeks we’ve enabled a fashion retailer to power a 56% uplift in conversion rates, and an 8% uplift in ad spend performance.
It isn’t just in-house teams that are reaping the benefits of introducing AI into their advertising, either. Working with an advertising agency that handles big budget campaigns across competitive sectors such as finance and insurance, we used AI to drive a 23% lower cost per conversion whilst spending six times more (which is a good win for the agency, whose objective is to spend as much as possible as efficiently as possible.)
There’s more to advertising than acquisition
Too often, brands will judge the success of a campaign based purely on how many conversions it delivers. With AI, you can take things to the next level and ensure you’re optimizing your campaigns for lifetime value.
By leveraging your own customer data and third party data sets with Ad Optimization technology, you can better understand your customers, predict their product preferences and their propensity to purchase.
By unifying your data across the value chain you can also optimize for other strategic goals, such as profit, for example. This allows you to target and acquire more high value customers to significantly increase profitability, grow brand loyalty and improve customer retention rates.
Accelerated change means adapt or die…
In conclusion, the future companies will all be AI companies. Yet time has sped up and the future is now – and those advertisers and agencies that are using AI are already thriving, and will continue to leapfrog those that are still stuck in the past.