The Ongoing History of Digital Marketing – Part 2: The Rise of the Smartphone

Stuart Elmes

When we left you at the end of part 1, the world of digital marketing was chugging along nicely towards an exciting (and lucrative) future. The widespread adoption of the internet was leading to greater accessibility, allowing consumers ease of access to all kinds of informative content, and allowing companies to communicate directly with their customers via email and websites.

But a game changing technology was about to turn the digital marketing industry on its head, and almost no-one saw it coming.

The mobile era was about to descend... 

 

Data gets BIG

“Everything that can be digital, will be.”

This idea had perhaps its greatest effect on digital marketing through the rise of “Big Data”. As data was no longer limited to discs and paper, the amount of raw information now collected and archived grew at exponential rates. Companies now had access to vast troves of consumer purchasing data from retailers, credit card companies, search histories and more. And as social media grew, consumers began sharing their preferences, personalities, and consumer experiences with the world. A Forrester study has shown that nearly half of all data used by companies now focuses on customer analytics, as companies now have a greatly increased ability to target individual consumers, and to maintain consumer loyalty through personalized offers and responses. Data is also very helpful in maximizing consumption by allowing marketers to deliver the right offer to the right person at the right moment.

 

Attack of the Phones

Any history of digital marketing would be sadly incomplete without looking at those gadgets which provide us with a permanent source of distraction everywhere we happen to be: the smartphone. A communications revolution was launched in December of 1994, when the first SMS message was sent across a network in Finland. It took six more years for the first SMS ad, when a Finnish news provider offered sponsored news headline texts. In less than a year an international conference had been organized by the Wireless Marketing Association. Advertisers were excited by the possibility of sending real-time, location based messages to consumers offering limited availability specials and promotions, and consumers responded. SMS advertising was (and still is) attractive because it offered marketers a guarantee that their message would be delivered, along with high read rates.

As the smartphone went from a novelty to a seemingly permanent fixture in our lives, it had a profound effect on the marketing industry. In 2007 the iPhone was launched, but as the devices became more sophisticated, smartphone marketing was initially just reformatted desktop browser ads. Most people found the ads ugly and annoying. Mobile-first ad agencies popped up like mushrooms in a dank closet and were quick to adapt when, in 2008, the App Store was launched. Now, instead of traditional browser ads, marketers could integrate their content into an app which was offered for free, ensuring eyeballs on their messages. This was a necessary innovation, as by 2014 users were spending 88% of total phone time “in-app.”

The switch from browsers to apps created new types of advertising, as traditional banner ads were replaced by interstitial, overlay, video, and perhaps most importantly, native ads. Native ads are those stories in your facebook feed which, rather than being liked or shared by a friend, say “sponsored content” above the headline. The idea is that your skepticism will melt away when you see that it’s a list of restaurants in a city you’re about to visit, or when the “suggested post” is for a Black Friday sale too good to pass up. As data allows advertisers to anticipate your needs before you even Google them, native content is likely to emerge as a major field of online marketing.

 

Social Becomes King

By 2014, it was clear that social media had become the dominant online activity in America, if not the world. A study in that year found that the average American spent 37 minutes a day on social media sites and that 99% of digital marketers were using Facebook, while 97% used Twitter. A 2015 UK study showed that the average person had five social media accounts, and spent an average of 1 hour and 40 minutes per day using them. Current studies show teens spending up to 9 hours per day on social media. Advertisers have taken note, with total social media ad spend estimated at $36 billion in 2017, it’s clear that careers and fortunes will be made and lost in this arena. In fact, Facebook has already surpassed Google in terms of total display ad share, nearly doubling its revenues in 2016.

 

The Future

As we have seen throughout this digital marketing history, changes in technology will continue to shake the marketing world, and give rise to new opportunities and pitfalls. One emerging technology which seems destined to change the way we organize our lives and manage our households are smart appliances and digital assistants. As smart fridges begin to provide us with recipes, shopping lists, online shopping and promotional offers, the companies which adapt to this technology the quickest could dominate the grocery industry. From the Lazy Susan to ready-made sandwiches, microwave ovens and delivery apps, we have seen that consumers prize convenience at mealtime above all else. A technology which enables folks to save hours of grocery shopping every week will certainly have a bright future. As people begin to organize their lives with AI assistants, the correct nudge from a marketer could create a lifetime of consumer loyalty. Finding ways to effectively market within these nascent technologies, and mine the mountains of data they provide, will determine success or failure for a generation of companies.

If there’s one thing we can be sure of, it’s that digital marketing will be vastly different five years from now, while still adhering to the eternal maxim “content is king.”  Another area which seems ripe for growth is Shoppable Content. Facebook and Instagram posts, recipes, and videos which, with a click (or two), will allow consumers to purchase a product and have it delivered to their doors. A picture of food which, with one click becomes a recipe, and with another becomes a bag of groceries delivered that afternoon. Shoppable content could be an ebook of beautiful photos which is transformed with the tap of an index finger into a catalogue of home furnishings, clothing, or cookware, instantly available for purchase. As the internet makes consumption easier, and offers us limitless choices, it seems safe to say that the future will be dominated by digital marketing strategies which catch people’s eyes as they scroll down through their feeds. Digital marketing will be seamlessly integrated into the social media experience, and your celebrity gossip photos will contain embedded links allowing you to purchase the same jacket Beyonce was wearing this morning.  Presenting beautiful images along with an easy gateway into the lifestyle they seem to promise will be the mission of 21stcentury marketers. And we at Adimo have a head start!