Changing Times for Digital Marketing Services Companies

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Recently, I’ve been thinking a lot about the ever-changing landscape as it relates to online marketing and the services that entrepreneurs and corporations purchase from digital marketing services agencies.

In recent times, many of you might remember the news concerning a number of corporations that pulled advertising dollars away from YouTube, leaving a number of prominent YouTube content creators very upset about decreases in income – and I’m sure Google and YouTube were not pleased about the situation either.

I then read where Proctor & Gamble, a huge investor in digital marketing globally, recently cutback over $140 million dollars USD on digital advertising due to ineffectual online ads. Why were they saying these ads were ineffective? Their two greatest reasons cited were that many of their ads were ending up attached to content of objectionable quality, which means that YouTube was not able to discern which channels were good locations to place these ads and companies were getting their names and ads associated with content they did not want to be in any way related to. And secondly, many of their ads were falling into channels and spots where “bots” were looking at the ads instead of human eyes. And bots do not spend any money on products so these advertising dollars were just being thrown away.

The funny thing was that after these advertising cuts had occurred, virtually no loss in sales or business growth were noticed by these corporations. The only thing to change was the increased percentage effectiveness of advertising spend relating to sales.

JP Morgan Chase in March reduced the 400,000 sites it had been allowing ads to be placed on down to only about 5,000 pre-approved sites and, as quoted by their Chief Marketing Officer, Kristin Lemkau, to the New York Times: “we haven’t seen any deterioration on our performance metrics” since the change.”

Over the past several years, we have seen corporations make steady moves away from spending money on TV advertising in the direction of digital advertising because quite frankly, a great many more leads per dollar spent were attainable online. Many digital marketing firms enjoyed dramatic growth over just a few years due to this windfall of media spend money coming in.

For a time, it was utopia but now corporations are learning as is evidenced by the examples above. They are now creating the statistical charts and graphs they need to show their management teams how effective their media spends are. And they are now able to discern where their bang for the buck just isn’t there and to drill down on those statistics to figure out why – which is why you are now seeing these cutback types of moves occurring across the corporate landscape and the statements being made as to why the cutbacks are occurring.

To obtain the media spend capital from these corporations today, it is becoming more apparent that digital marketing services companies had best be prepared to show statistical evidence that the money spent will engender the financial returns anticipated. And as a marketing firm, you will need to be able to start answering questions about how you can manage their funds so that real people and not bots are viewing the ads being placed and that the ads are being placed in quality places, attached to quality content. If you can’t, you may end up being cut just like the 3,500 websites got cut that had been profiting from JP Morgan Chase advertisements.

In summary, it is getting tougher to be a digital marketing firm these days and it will come to be even more so. Online marketing services companies will have to do more due diligence as they find places to spend corporation advertising budgets. And more due diligence means more work which will cut into profit margins. However, if you want to stay in business over the longer term, this something you are going to have to get good at. Those that do, will be picking up additional business from advertising firms that don’t.

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