The future of Digital Ad Budgets

We give a presentation to a roomful of NYU Stern MBA students this week on the state of Marketing Measurement and Accountability.  As always, the students had great questions and insights, especially around digital marketing.  This time, one of the students asked “in five or ten years, how much of marketing spend will be going to digital?”

It’s a great question, especially if we push it to the extreme and rephrase it as “Could digital be 100% of marketing budgets?”

Our answer?  Yes, but only for high-engagement products.

The traditional “push” messaging of offline media and advertising, along with the “pull” of promotion and discounting have always been viewed as working on each end of the purchasing funnel:

funnel_traditionalSo where does digital fit in?  The two largest components of digital spend today, Search Ads and Banners, both hit the bottom of the funnel better than they can drive awareness.  There are, however, a few digital tactics that can drive awareness but we believe they only work in high-engagement categories.  Consider to cases: Bonobos, and Kraft Mac & Cheese.

Bonobos, a high-end men’s casual pants & shirts retailer, has made only digital advertising work for them, driving awareness with Facebook and social toolkits.  But clearly buyers of $100+ fitted pants and shirts are engaged with the product, which means more will tell others about the brand and those in the market will seek out those same opinions.

But now let’s imagine it was your responsibility to drive Kraft Mac & Cheese’s Cheddar Explosion product- It’s low engagement for most purchasers, which means it won’t be on Pinterest, few will Like it on Facebook, and there won’t be tweets about it (well, none without snark).  So how do you drive awareness?  There are simply not many options outside of traditional media and advertising.

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