Though it may be more valuable than ever, digital marketing hasn’t completely avoided the COVID-induced economic hangover. With significant restrictions on travel, entertainment and events, IAB UK data showed a 5% drop in digital ad spending during H1 2020.
This marks the end of a decade of year-on-year growth.
It’s not all doom and gloom out there though, thanks in part to the rise of ecommerce. According to industry estimates, 58% of consumers expect to do more online shopping after the pandemic than they did previously.
So with these inverse trendlines – overall spend down, but overall online engagement up – what should marketers be focusing on? One reality worth considering is the movement to ‘in-house’ some of the traditionally-held responsibilities of external agencies.
While in-housing is not entirely new, it has been accelerated by the pandemic. According to the World Federation of Advertisers (WFA) and The Observatory International, 74% of in-house agencies were founded in just the last five years, with cost efficiencies (30%), better integration (64%) and better brand knowledge (59%) being the key drivers towards in-housing.
Many companies are setting up their own teams to buy and traffic performance media such as paid search given the direct access to their owned properties. The wider rationale for in-housing does contain some discussion of cost and control, led by the likes of P&G. But for many looking to build capacity within their organisations the better formula is: in-house + external partners. Each plays a role, best suited to their strengths.
This new in-housing reality means more to certain marketing channels than others. And influence marketing (IM) – the capability to enable key influencers to market your brand for you – can thrive under this hybrid formula at a time when up to 9 in 10 marketers say that IM is delivering ROI that is comparable to, or better than, other channels. And its value will continue to grow in an ecommerce world.
Brands’ ability to bring more IM in-house has been aided by the growing maturity of the technology ecosystem surrounding it. An unknown segment only ten years ago, IM technology now powers enterprises across the Global 2000. Sophisticated IM toolsets, such as Traackr, CreatorIQ and AspireIQ, centralise the logistics of influencer selection and management and provide unified reporting as the ‘single source of truth’.
The data generated by IM programmes across both earned and paid medial is of most value to in-house stakeholders. In B2C, IM acts like a media channel where influencer compensation can be toggled up or down based on conversion rates. For B2B, IM activity more closely resembles other earned media channels and is well aligned to a CRM and ABM mindset that can unlock customer relationships over longer buying cycles.
However, possibly the most important reality of a COVID-19 mindset that supports in-housing is the emergence of authenticity as the silver bullet for all brands. This is because the era of companies pushing their messages to customers and expecting ever greater results is over. In the majority of cases, consumers would much prefer to follow the example set by those influencers that they respect, like and see reflecting their own values.
We cannot overlook this last factor. In a recent report by Takumi, 58% of 16 to 24-year olds and 56% of 25 to 34-year olds agree that influencers should use their platforms to discuss current affairs and everyday activism. As similarly reflected in the Edelman Trust Barometer, influence is built through authority and empathy, with industry experts and people like themselves rated as the most credible sources of information (60% and 59% respectively).
Again, the value of proximity to influencers and the data that can be unlocked are critical in getting closer to the nirvana of authenticity. If marketing technology now lessens the previously messy mechanics of IM with improved interfaces for company-side teams, then the upsides of in-housing IM are more attractive than ever.
In order to achieve this next level of customer engagement, brands and companies alike will need to shift from transactional IM to a more human-centered strategy that is integrated to reflect the entire customer journey. Influence marketing, as a cross-functional mandate, will require collaboration that in-house teams will be best suited to undertake.