Ad Spends in Digital Marketing and Users

This digital marketing spending is quite prevalent in developed economies. But here’s the good news – developing countries are starting to catch up, and are not far behind the curve. Check out the below chart and see for yourself the growth in the digital marketing spend share over time in India:

Figure source : eMarketer

We have seen positions open for years in the digital marketing space because of the shortage of such niche talent coupled with the immense growth available in this field.

Excited yet? Good. Let’s start with the most basic question and take it from there!

What makes Digital Marketing better than Traditional Marketing?

Marketing is all about getting 4 things right (we call it Zero Moment of Truth (ZMOT) – reaching out to the right customer with the right product/offer at the right time through the right channel. Digital Marketing also needs a lot of testing to see which combination works for these 4 factors, so we find a channel that takes minimum time to hit the market. Traditional marketing channels like cable TV, flyers, radio, physical banners, etc. present a lot of challenges getting all of these 4 things right. To name a few:

1. Once printed or aired on television, an advertisement cannot be changed.

2. High time to market. This is actually a very big challenge for any dynamic industry. A lot of offers on products require a quick response time (like Amazon Prime sales) and advertisers don’t wish to announce the sale beforehand to make sure that customers regularly come to their website to check out offers and sale discounts.

3. No way to accurately measure viewed ads. All we know is the response from ad campaigns.

4. Very limited ways to reach out to a specific/niche audience.

5. Even if we somehow manage to reach the right customers, we might not really reach out at the right time. For instance, if we advertise during specific TV shows that are viewed by our target audience, we don’t really know whether the target customer is looking at the TV at the specific time when our ad is being served/played. Similarly, if we send a mail to a specific prospect who is traveling at the time and he might not read and it’s a lost opportunity.

6. Given a low response from these channels, most of these traditional methods have a high CPA (cost per acquisition).

Digital marketing is able to overcome all the challenges mentioned. With internet penetration reaching 60%+ around the globe and rapidly increasing (see chart below), digital media is now an ideal place to catch your audience’s attention.

Figure Source : Research Gate

Today, we can reach out to over 4 billion+ internet users through digital marketing. Another survey results (below) indicates 2 hr. 28 mins spent per day by adult internet users in India. Noting that average time spent by the total adult population is 1 hour, total internet user average should be somewhere between 1 hr to 2.5 hrs (say, 2 hours). An estimate of the ad serving opportunity available per day on the internet is 4 Bn*2 hours = 8 Bn hours/day.

Even if we assume only 1% of this internet time can be monetized with ads, we are still talking about 80 Million hours/day!

Figure source : eMarketer

This exercise would have given you a sense of the magnitude of the opportunity in digital marketing. And as a digital marketing analyst, you would have definitely noticed the incremental curve for both internet users and the average time spent users spend on the internet. Given the scale and precision of this marketing, it has become a must for businesses of any size and any vertical.

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