In 2011, Forrester predicted a huge growth in digital marketing, reaching a spend of $76.6 billion in the US by 2016.
The prediction was spot on. 2013 saw a digital ad spend of $50 billion in the US, and of just under €20 billion in Europe.
Image courtesy of Forrester
The increase in money spent on digital marketing was accompanied by an explosion in digital agencies who provide the specialized – often more technical – services required by the online realm.
Mobile drives the digital market
Mobile marketing has been one of the biggest growth areas, which is not surprising since, according to Morgan Stanley, 91% of adults keep their smartphones within constant reach. From now on, agencies will need to deliver content that is accessible across all kinds of fixed and mobile devices: desktops, laptops, tablets, smartphones and even, in the not too distant future, wearables.
This ubiquity of mobile devices has generated opportunities for another important marketing trend: personalization. By identifying a user’s precise whereabouts, agencies can deliver location-based marketing – ads that are focused on a user’s specific needs, at a particular location and exact time.
Other emerging technologies such as Big Data, the Internet of Things, and Cognitive Computing will also be invaluable for delivering consumers the personalized experience they expect.
How the landscape evolved
The growth of digital technology took traditional marketing agencies by surprise. And where these agencies were slow to react, the digital agencies filled the gap. Today those “new practice areas” are maturing, and constitute an ever-increasing slice of marketers’ budgets.
As digital marketing becomes the norm, technological skills are increasingly important. Traditional agencies will continue to evolve at their own pace, but with other new technologies on the way, the more agile digital agencies will be able to evolve more quickly to embrace the marketing opportunities they bring.
Where is it going?
For now we can expect to see a mix of consolidation between the traditional agencies and the smaller digital organizations; diversification and growth of the bigger digitals; and the emergence of new specialist digital agencies, as new technologies are developed.
Over time the market will inevitably consolidate. And it’ll be the agencies that can deliver a mix of traditional and digital, and who can adapt to technological change, who will be the winners.
