The Future of Digital Marketing: Trends and Technology
Although marketing budgets overall have decreased, digital marketing has captured an increasingly large share of the pie. But what is the future of digital marketing? We need to examine both consumer trends and technological advances to answer this question.
Now, while predictions, as the old Danish proverb goes, are difficult, especially about the future, existing trends can be examined to see where things are heading, as can technologies that are already reshaping digital marketing. It’s important to note that trends and technology are interconnected and inform each other.
Part 1: Trends
If one trend will reign supreme, it’s personalisation. As Michael Brenner says, “the future of marketing is extreme customer-centricity.” Seventy-four per cent of consumers feel frustrated when content isn’t personalised to them. This desire for personalisation comes from a wide range of sources.
Firstly, it is part of a broader trend in media and entertainment where individuals seek greater individuality with what they consume. The mainstream rise of fan fiction and the popularity of open-world and massive multiplayer online games is a testament to that. An IBM report found that personalised content promotes higher engagement rates. Though this increased personalisation also comes with the impact that target audiences will be more engaged but smaller.
Secondly, it comes from a desire from consumers to be treated like real people. Increasingly people will want recommendations over advertising, authenticity over pretend and more conversational marketing over dictation. For 86% of consumers, authenticity is a key factor in deciding to go with a brand.
In many ways this trend is a backlash against social media and high-profile influencers taking on more sponsored posts, thereby reducing their authenticity. Influencers will still be important, but it will be influencers with smaller dedicated followers that have an authentic relationship with their followers that matter more. This desire for a more personal relationship works two ways. Although it may push people away from certain companies, if the digital marketing alignment is spot on, consumers will have a positive response. It is the replacement of the hard sell with a more niche, more precise form of marketing. Marketing is shifting from amplification to communication.
Influencers will still be important, but it will be influencers with smaller dedicated followers that have an authentic relationship with their followers that matter more.
An interesting example of this effect and the increased desire for personalisation is the dramatic increase for local searches and ‘near me’ phrases. Fifty-eight per cent of consumers that have found local businesses using voice search are likely to do so again. Rather than just any old marketing, consumers increasingly want engagement that is unique to them. More than just recommending to anyone, businesses will need to target their small audiences more effectively and be in tune with what they want.
A subset of personalisation, but unique in its own right, is the increasing desire for value alignment. Value alignment is part of a wider cultural change where companies are expected to take positions on social issues, such as race, gender and sexual orientation. Forty-two per cent of ethnic minority shoppers say they’d switch to a retailer that’s committed to diversity and inclusion. It speaks to an increasing visibility of identity and a fracturing of national identities into smaller communities. Also, it is reflective of an increasing desire for people to see their identity represented and acknowledged.
Domestically, companies will no longer be advertising to a whole country, but a series of groups, divided up more systematically by value and identity. An inverse of this though is the resurgence of nationalism and increased political polarisation. In fraught political times, companies will have to make decisions about where to stand on issues and their digital marketing will have to align accordingly.
This alignment also takes place in an increasingly interconnected and divided world. For example, commenting on issues related to China, such as on Hong Kong, can cause a swift backlash as in the case of an NBA manager. As geopolitical tensions heat up and businesses are increasingly called upon to choose sides, digital marketing will have to take a stand on big issues, potentially losing customers to gain others.
Plus, as a consistent, transparent brand can boost sales by 33% and social media can transmit in an instant everything a business says to a global news cycle, it won’t be enough to target different groups. Businesses will have to decide to earn acceptance and trust from consumers. Eighty-one per cent of consumers will only buy from brands they trust, but not every consumer will see trust in the same way. Values, like personalisation, will become the heart of every part of digital media.
The final consumer preference of note is privacy. Even before recent allegations against Facebook over the use of data and Apple’s changes to its privacy settings for apps, privacy was a major concern for consumers. Eighty-six per cent of consumers say they are concerned about their data privacy. Ad Blocker, which is used to protect privacy, was used by 36% of Australians in 2021, up from 27% in 2016. Over half a billion people globally have ad blocker on their phone, though the number of users is likely higher.
These privacy concerns have led sites like Google to end support for third-party cookies and move to a more privacy-first internet. Google has released a new model whereby individuals are collected into cohorts and advertisers market to that cohort, rather than a specific individual. Ads will be based on recent actions rather than only collecting or storing personally identifiable information.
If privacy concerns heat up, which as technology gets more intertwined in our lives is likely to occur, more invasive advertising, like dark design patterns and tracking, will end up unusable. Companies will become forced to increase privacy settings, especially if governments get involved, which seems likely. Digital marketing will have to deal with the changes. Increasing trust and brand loyalty will be a big part of that for many brands and digital marketers.
Starting the Conversation
The future of digital marketing is more conversational as consumers gain greater control over their data, push for greater personalisation and engage with companies that represent them.
Video Easy: The Rise of Visuals
The increased dominance of video and the visual is an area where consumer preference and technological innovation have overlapped. The great desire for the visual is seen through numerous technological innovations, from the rise of video and visual-centric apps like Twitch, TikTok and Instagram — the latter which added reels as a response to video demands — and increased DIY-friendly mobile filming. YouTube has overtaken Facebook as the second-most visited site in Australia, while 82% of people would rather watch a live video than read a social media post. Additionally, 63% of people will watch a video that explains something over reading it.
The great desire for the visual is seen through numerous technological innovations, from the rise of video and visual-centric apps like Twitch, TikTok and Instagram.
Digital marketing has already responded to these changes with 30% of marketers seeing video as a more important part of their strategy than their website, with 68% even saying that video has better ROI than Google Ads. Fifty-two per cent of marketers say that video helps build trust with potential customers. Although not all visuals are created equal. Seventy-four per cent of marketers say video has a better ROI than static imagery and partial-videos generate 1200% more share than text and image content combined.
The Great Shift
This shift will only continue to accelerate as new technological changes, such as neomorphism, immersive 3D visuals and micro-interactions improve and become more widespread. This, along with voice activation, may mean written content will fall into disuse. This may seem impossible given how dominant the written word is, but this shift has happened before.
Humanity has changed the way it processes and delivers information. Consider how we shifted from aural cultures to written ones, which lessened the importance of aural traditions. How we shifted from the written world with the rise of radio, then cinema, then television. The internet shifted how we read and consumed media, with brevity favoured over depth and it may be shifting us again towards video.
Mobile video consumption rises by 100% every year and in 2022 is expected to make up more than 82% of all consumer traffic. Viewers retain 95% of a message when they watch it in a video, compared to 10% when reading it in text. This shift presents both challenges and opportunities for digital marketing. As technology gets better, obstacles such as time, resources and budgets are likely to be lessened and video will dominate.
An example of this dominance is the rise of visual search marketing. Visual search marketing is where algorithms take an image and generate buying options for that product or something similar. It’s predicted to be worth USD$40 billion by 2025. Some even predict the future will be in images rather than keywords, and people may even be able to shop directly from their favourite shows or films.
Though, Keep it Personal
However, even video won’t escape the desire for personalisation. The change from mass to micro focus means audiences expect personal relevance and value. Thus, the success of platforms like TikTok, whose algorithm directs users towards videos they are likely to enjoy. One-size-fits-all video content is no longer enough to maintain attention or have people act on what they’re watching. Videos will either need to be better targeted or personalised.
This personalisation could include displaying the viewer’s name on the screen using text-field inserts and overlays, or allowing users to contribute their own assets, personalised audio and real-time experiences, such as seeing graphics based on their location or interests. There are many companies that are currently using strategies like this, such as Facebook’s recaps and memories. As video completes its ascension, expect to see many more companies using personalised videos.
Content: The Forever King
A shift towards video dominance could take generations to achieve though. In the meantime, it is content that will be king. Seth Godin said back in 2008, “content marketing is all the marketing that’s left,” and his words have never been so apposite. Research from the Content Marketing Institute states that more than two-thirds of marketers are increasing their content marketing budgets in 2022. Content has 6 times the conversion rate and costs 62% less than other traditional marketing options. Companies with blogs gathered 68% more leads than companies without and websites with blogs have 434% more search engine-indexed pages. The main reasons for this is a combination of ad blockers and changing consumer demands. Once again, consumers desire not to be advertised to but to find genuine information that answers their questions.
According to Google “creating compelling and useful content will likely influence your website more than any… other factors.” Google’s success rests on its ability to find its users the information they need to solve their problems or answer their questions. The better it does this, the more people will continue using it. It has a vested interest in improving this function with fewer ads and better content. The better your content is the better satisfied users will be and so the more likely Google will match you up. If anything, it’s a resurgence of content marketing which was replaced by social media ads.
So, the future is more a return to the past where brands no longer promote themselves but create content that people actually want to consume. A continued decline of PPC advertising, and the rise of earned media and SEO. Although, competition is fierce within content marketing. More in-depth articles and infographics will become more important to attract consumers.
This trend is all but certain to continue well into the video era of digital marketing — regardless of how people consume marketing, it will have to have great content.
Tracing Time: Changing Demographics
It’s another cliche, but one of eternal relevance for marketing: time waits for no one. People age, trends change and what works for one generation doesn’t necessarily work for another. This is especially relevant in an era of great technological difference between generations. Generation Z is coming of age and will begin to have money of their own. They will become an increasingly valuable target demographic with their own unique way of being marketed to.
The first thing to note is that younger generations are more avid users of new technologies. Many of them use some form of the metaverse, a hypothetical extension of the internet into a virtual world, such as Roblox. Targeting younger generations will require digital marketing to embrace new technologies and ways of marketing. Almost half of 18–49 year olds get their news and information online, with much higher percentages for younger people. Twenty-seven per cent say following influencers is one of the main reasons they use social media. Without acknowledging these facts, marketers will miss out.
Inclusive & Equitable
The second thing to note is that younger generations want inclusive and equitable digital marketing. It’s a well-known fact that societies change their mind faster than people do. This connects back to the trend that consumers want companies that align with their values, though it is much more prevalent for younger generations. Marketers will have to be highly responsive to social changes and to the demands of the younger generation as time moves forward.
Younger generations want inclusive and equitable digital marketing.
The final thing to note is that Gen Z wants memorable experiences. More than just social media ads, it’s events, games and interactive experiences that are going to be the ones generating interest and brand loyalty. Digital marketing is going to have to become more creative, precise and personalised than it has ever been. This is only going to become more true as the competition increases over marketing attention.
Part 2: Technology
Digital marketing is something that would not exist without advances in technology. As such it has no choice but to adapt to changes in technologies.
Artificial Intelligence (AI), long only extant in the world of science fiction, has begun a revolution that will alter almost every aspect of our lives. Digital marketing is no exception. AI is the study of how to make machines capable of solving problems as well as people can. Machine learning, a related term, is a new way of creating those problem-solving systems. You show a system several examples until it eventually starts to learn from them. What they can learn to do is as endless as that which humans can.
According to Marvin Chow, VP of Marketing at Google, “AI and machine learning could get us closer to one of advertising’s most sought goals: relevance at scale.”
Digital marketing can already achieve communication at scale, thanks to social media. But when it becomes combined with customisation AI, digital marketers will be able to tailor campaigns to consumers’ intent in the moment. Long-term historical data will no longer be necessary as marketers will be able to take a snapshot of what a user is doing in a specific moment and market accordingly.
Long-term historical data will no longer be necessary as marketers will be able to take a snapshot of what a user is doing in a specific moment and market accordingly.
This can be combined with contextual analysis, looking at an individual customer’s past data and generating recommendations. Product offers or next best actions will be altered in real time to suit consumer’s needs. For example, 2 different people watching the same sporting event will be advertised different alcohols based on their preferences. Tailoring to preferences will also build stronger brand loyalty as the brand’s recommendations will become more relevant to the consumers.
Because of AI’s strength of self learning, processes can be continually optimised. AI algorithms can determine which marketing mix worked best for whom, adjust the campaign’s factors and make suggestions. Google already runs ads powered by AI to optimise campaigns by identifying the best-performing designs and copy, and automatically adjusting based on engagement. Further, because AI is so good at analysing large swathes of data, it will be able to analyse hundreds of thousands of customer reviews, apps, forums and social media posts to find out what a company does best. These can then be integrated into campaigns which better reflect consumer sentiment.
Although, it does come with a catch. Consumers will expect simpler, more instantaneous and more targeted messaging. If digital marketers don’t meet consumer expectations. they will lose customers. AI is only going to supercharge the demands for more personalised marketing.
The greatest fear for many when it comes to AI is losing one’s job to automation. Although creative industries felt that they would be safe, it is no longer the case. AI will bring the automation of content.
AI-written content already exists. Publications like the Washington Post and others have been using AI to generate templated content, like sports scores or crime reports, for more than 2 years. And while they still have trouble writing longer-form pieces, as AI gets better, it will only be a matter of time before more content is being written by AI. One report highlights that more than 85% of digital ads will be done through automation in the foreseeable future. Another example is dynamic search ads (DSAs). With DSAs, you choose a landing page you wish to promote, Google’s AI scans the landing page, chooses the keywords for you, and generates accurate ad headlines. Programs like Anywords can come up with new content ideas, optimise marketing copy and generate effective copy for practically any marketing channel.
The Walt Disney Co. has invested in AI that will one day be able to write novels or films virtually indistinguishable from those created by humans and at a much faster rate. If AI can achieve these results with the complex intricacies of fiction, then it is probable that marketing will one day be automated also.
Further, AI is already being used to make art and generate new music, so it will only be a matter of time before generating images, designing websites and composing music will be automated, and the perfect ads for the target audience will be made. Though this may sound like a dystopian nightmare, the likeliest outcome is that AI will be used as a tool by marketers to assist them in creating better content, spark new ideas and push the boundaries of creativity.
Chatbots are another way AI is and will transform marketing. A chatbot is an application that allows online conversation between the brand or business and customers. Chatbots can also take the form of micro-interactions, such as a brief questionnaire that customises website information for users. They are where the customer comes directly in contact with AI. They can be utilised on Facebook or directly on websites and come in a variety of forms. Companies like Airbnb and Spotify use them on Twitter to offer 24/7 customer service. While others, like Sephora, use them to help users find make-up tutorials and promotions. Chatbots are an increasingly popular way of improving customer service.
It is the improvements in AI and machine learning that are making chatbots a digital marketing strategy that will be increasingly important. In the past, they came across as annoying, inauthentic and disruptive, but AI improvements have made them the contact of choice for consumers. Fifty-six per cent of shoppers would rather send an instant message than call a support line. Chatbots are preferred as they allow a user to stay on the platform they’re using or chat about the content or brand they’re browsing at the moment of interaction. eCommerce sites that offer fun interactive interactions with customers, or chatbots that customers can interact with while in a store, offer more immersive and personal experiences, and promote brand loyalty. This is part of the broader trend towards more personalisation and conversational marketing. Here, chatbots will be a crucial part of the strategy. This will only increase as chatbots’ abilities to answer questions and offer features are improved. Already, 81% of consumers who buy from a retail chatbot ultimately buy from it again.
Further, it is likely that as AI improves, chatbots will start replacing live agents and machine-learning algorithms will make them better at emulating humans. Before too long, it seems it won’t just be the content writers that become obsolete but call centres too.
The advancement that will be the peak of more personalised marketing is the personalisation engine: software that enables marketers to identify, deliver and review the optimal individual experience. They work by gathering data on past interactions, current context and predicted intent, leveraged from users profiles, anonymous tracking of user behaviour and additional first and third-party data, such as geography and transactions. With this information, the engine segments and targets audiences, triggering messaging and content, either in one or multiple channels.
Personalisation engines help marketers identify, select and tailor content, offers or other interactions to their desired audience. Users get to see the information they want when and in the way they want to see it. Different supporters of a sport’s team will see different ads based on what team they support in the same place on a website. Already widely used in areas such as retail, financial services and travel, these capabilities will become better and a more valuable component of marketing.
The Voice & SEO
With reading being replaced by video, it’s no surprise that typing is giving way to speaking.
While smart speakers have been around for a while, it’s only been recently that they’ve taken off as people become more comfortable using them and the technology gets better. Google’s RankBrain can, when it encounters a word or a phrase it hasn’t heard before, guess as to the searcher’s meaning and intent, then deliver the most appropriate answer. This is going to improve as the technology does at responding to and understanding minorities and those with accents. Devices such as Alexa and Google Home are on their way to becoming ubiquitous.
It’s Not What But How You Say It
And that is to say nothing of mobile voice search. Currently, 41% of adults use voice search at least once per day. And, in 2020, more than half of all smartphone users engaged with voice technology on their device. Why this is relevant for digital markets is twofold. Firstly 62% of those who regularly use a voice-activated speaker say they are likely to buy things through their voice-activated speaker, which makes them a valuable market. Secondly as Mary Meeker’s Internet trends report finds, almost 70% of these searches were using natural or conversational language.
How content is written and optimised will have to change and adapt. SEO is going to have to become more conversational because when users speak, their phrases are more realistic and practical. This will mean that SEO strategists and content writers will have to identify trends in voice searches, such as evolving word use and slang, which smart speakers will continue to integrate and become better at understanding.
How content is written and optimised will have to change and adapt.
Further, SEO will have to determine the content that best serves the user’s needs. RankBrain is matching signals to query intent, and SEO must do this too. For example, if you search for information about a bushfire in your area, the search will be matched to the newest available information. SEO and websites on bushfires will have to be optimised accordingly to match the user’s needs. This means SEO will need to be tailored to match things like freshness, depth, diversity of earned links or high-user engagement so it is more likely to be picked up by smart speakers. If a user wants depth, then the more the SEO content focuses on depth, the more likely it will get picked up and delivered to the user.
As AI advances, voice activation will be able to better match the user’s needs with what the content can deliver them. Roughly 75% of voice search results will rank in the top 3 positions for a particular question on a desktop search. This also speaks to the importance of being in the featured snippet position, earned by having clearer, better SEO and content.
Speaking the Truth
What it boils down to is that businesses seeking to attract the most people possible will have to optimise their website for voice SEO. This includes strategies like using natural language with direct answers to specific questions, schema markup and rich snippets. Further, content will need to be regularly updated to reflect changes in language, so it can appear higher up in searches.
It must be said, though, that the timeline for this is unpredictable, as it’s predicated on adoption of voice-activated speakers. But, in the long term, it is certain that SEO will need to change how it operates to reflect how people will search.
Earth 2.0: Augmented Reality & Virtual Reality
Once again, science fiction is leaching its way into reality; both augmented and virtual. Even as far back as 2018, it’s estimated that 85 million users experienced augmented reality (AR) and virtual reality (VR) a month. According to a report from Futurum Research, 69% of people polled expected to use AR and VR to sample products in 2021. The most common predictions see VR and AR reaching mainstream consumer adoption in 3–4 years. AR and VR is not only the future of how people interact with the world but how they consume marketing.
AR is an enhanced version of reality that is achieved through the use of digital visual elements, such as image, sound or other sensory experiences. Pokemon Go is probably the most famous example of the power AR has and will have in attracting consumers. ThinkMobile indicated that over 50% of smartphone owners already use AR apps when shopping, many without realising. Google Translate’s AR functions are an example of this. The advantages of AR are that it can cast off the limits of more mainstream advertising and connect with customers on a deeper level. IKEA offers a virtual reality catalogue where you can place pieces of furniture in your own home. While some fashion companies, like Adidas, allow people to virtually wear sneakers to try them out. Seventy-two per cent of shoppers purchased items they had not planned to purchase because of AR, although this may be because the technology is still relatively novel.
AR quenches the customisable desires of the consumer and is easily matched to consumer needs. Customers can access a real-time experience of the products they are purchasing. How the product will look, feel or be used can be ascertained instantly, so customers are more likely to purchase that product. The other advantage is that customers tailor their experiences around products or services they are interested in. For example, the Amazon Salon offers augmented hair colouring at its brick and mortar stores. This allows a more interesting experience for those interested in hair colouring than would otherwise be possible.
AR quenches the customisable desires of the consumer and is easily matched to consumer needs.
AR also offers the opportunity for collective experiences. Snap – City Painter is an AR tool that allows users to virtually spray paint streets and decorate them with pre-created murals. It is a shared experience that people can see being made in real time. All these various implementations add value and experienced-based marketing. They aren’t simply pop-ups or billboards and so are better at actively driving sales than traditional marketing.
The rise of AR carries with it the expectation from consumers, especially as the technology gets better and more companies begin using it, that AR will be integrated into their business experience. Customers will gravitate towards businesses that are using AR and using it well. It is almost certain AR will become a mainstay of the customer experience and of digital marketing.
Ready VR One
Virtual reality is a simulated experience of the real or an imaginary world. VR has been around for a while but has yet to reach mainstream adoption in the same way as AR has, though its impact is expected to be massive. VR will help digital marketers bridge the gap between experience and action by offering a digital experience in place of a ‘real’ one. The idea of digital experience emerged from novelty into general accepted reality during the pandemic, and customers proved their ability to adjust remarkably quickly.
How VR will be used by marketers is virtually endless. Already billboards can be bought in virtual spaces, allowing companies to advertise to people who beforehand they couldn’t reach. VR will enable people to showcase their work, companies and products in a way that is easier for people to find and interact with. People are already buying land in virtual realities and it will soon be possible for local businesses to buy up virtual real estate and open a virtual version of their store. This is one of seemingly infinite experiences people will be able to access. The better and more unique the experiences are, the better the rates of attraction. Plus, as VR will be experience-based, and in the short-term novel, people won’t actively avoid it like they do with other ads or marketing.
Some Assembly Required
It does mean marketing will need to be clever about VR though, especially given heightened risks of misuse and being vandalised within the virtual world. Further, the marketing will have to be integrated in a subtle, seamless and natural way, like a keyword in a piece of content. Plus, at the moment, VR is limited to those interested in it and those that can afford it. But as the technology gets cheaper and more effective, more people will start using it and the digital marketing opportunities will only increase. Once it arrives, and if digital marketers can master it, the world will be their virtual oyster.
Together in Electric Zoom Meetings
Experiential marketing makes customers more likely to purchase a product. With this truth, digital events are certain to become a powerful force in digital marketing. Already virtual events, webinars and online courses produced the best results over 2020. Now, while most of this was driven by the lockdowns, increased digital infrastructure and people’s increased ease with digital technology and attending digital events means they are likely to grow in number. Hybrid events, such as attending otherwise physical events via Zoom, are a likely vision of how these events will play out in the short to medium term.
As VR technology gets better, wholly virtual events will become mainstays for digital marketers. Already companies are running completely virtual events. Stella Artois worked with Zed Run to create a Tamagotchi-like experience crossed with the Kentucky Derby. One reason this event worked was that NFT horses could be traded, raced and bred. People like collecting things and earning achievements, and digital events offer the perfect place for these things to happen.
As more people use virtual worlds, or the metaverse — the virtual extension to the internet — these platforms will benefit from network effects, as will their potential as marketing vehicles. Users can already attend digital concerts and digital neighbourhoods used as promotional tools. They worked as they were designed carefully to avoid looking like marketing. Virtual events fit in perfectly with the trends of authenticity, personalisation and the desire for experiences.
Will Users Dream of Virtual Sales?
There are some considerations about AR and VR marketing, however, that must be taken into account. How AR, VR and digital events marketing will play out will be decided by what marketers can create and how consumers respond to it. Scams, growing in sophistication will be sure to get involved, which may make people wary of virtual marketing. Overtime, guidelines will be set down, rules will be established and governments will have to and want to get involved.
It’s predicted that AR will grow faster than VR as AR is integrated into smartphones, tablets and home appliances. Plus, whether consumers stay as interested in digital events once their real-life versions return en masse will have to be seen. But, at the moment, opportunities are endless and those that enter faster will reap the most benefits.
Although they’ve been around for a while, non-fungible tokens (NFTs) have only recently begun to get wider attention. This means they are a new avenue for digital marketing to explore. An NFT is a unique digital token whose ownership can be kept track of via blockchains. It’s basically a way of confirming you own a real, original Rembrandt as opposed to a copy. An NFT can be anything digital, including drawings, GIFs, songs or items in video games. It can even be used to keep original records of things such as house deeds or financial records.
Already various brands, such Taco Bell, Coca-Cola, Microsoft and Nike have introduced NFTs. Their marketing potential comes from their ability to provide a new user experience while increasing brand awareness and affinity. The technology can be used to provide personalised gifts, vouchers and other unique experiences. Event tickets can be released as NFTs creating buzz before events begin. Famous ad campaigns can be turned into NFTs and thus transformed into collectable assets. As NFTs come more into their own, the opportunities will expand and NFTs will take their place as an important part of the digital marketing experience.
As we come to the end of our examination on the future of digital marketing, we should remember the advice that fortune favours not merely the brave but the well prepared. How the future unfolds will be known only to those lucky enough to live through it, but there is one thing that is always knowable. No matter what happens you need a team prepared to deal with the challenges of tomorrow. Does your digital marketing agency see where the winds are blowing and how you can stand out in the digital world?