This Month in Marketing: AI, Agencies, And Other Insights (November 2023)


This Month in Marketing: AI, Agencies, And Other Insights (November 2023)

With the marketing world moving and evolving so quickly, it can be easy to fall behind. Have no fear: every month, the Marketing Manager blog compiles the best tips, trends, news, and need-to-knows to keep your business firing on all cylinders.

AI Buying Power

A UserTesting study examines American consumers’ attitudes toward AI, its potential roles in retail, and their personal data preferences. The study reveals that while 86% of the 2,000 adults surveyed believe they know what AI is, only 46% understand its capabilities fully. Consumers are comfortable with AI auto-ordering household items (36%), making reservations (33%), and selecting clothing (30%). However, they are reluctant to trust AI with tasks like taxes (31%), driving (28%), and monitoring children (26%). Privacy concerns are prevalent, with 70% worried about their data’s use and 72% concerned about targeted ads. Nevertheless, 87% are willing to share personal information with brands to save money, including birthdate (52%), full name (45%), and social security number (34%). The study highlights the dichotomy between AI fear and data-sharing for attractive deals, emphasizing the need for better understanding AI capabilities.

Instagram Growth

The World Advertising Research Center predicts Instagram’s rapid recovery from Apple’s App Tracking Transparency, expecting it to reach $61.1 billion by year-end and nearly $71 billion in 2024. AI targeting innovations, offsetting ATT’s impact, contribute to Instagram’s success. The platform’s popularity among influencers and direct advertising spending further boosts its Q4 2023 forecasts, up 25.8% YoY. The recovery of Meta’s ad business in 2023 is remarkable, given previous concerns about signal loss due to ATT. Instagram’s ascendancy is expected to make it the world’s largest social media platform by ad revenue, surpassing its fellow Meta company, Facebook.

Mailbox Marketing

Amidst the digital marketing landscape’s rapid changes, traditional direct mail retains its relevance. A study by Winterberry Group and the U.S. Postal Service reveals that U.S. brands will spend $39.36 billion on direct mail efforts in 2023, positioning direct mail as a crucial performance marketing channel. Marketing professionals recognize direct mail’s potential for delivering personalized messages based on data triggers, supporting customer acquisition, incremental sales, and other marketing objectives. Many marketers are integrating direct mail with other channels to activate omnichannel campaigns effectively, reflecting the growing importance of this channel.

Get With The Program(matic)

The digital advertising industry is reaching a critical juncture as it transitions away from third-party cookies. 33Across’s analysis shows that most programmatic transactions on its exchange still rely on cookies. While various industries are increasingly embracing alternatives, only insurance has a substantial head start, with half of its purchases originating from cookies. Advertisers’ hesitance to adopt alternatives stemmed partly from skepticism surrounding Google’s shifting deprecation dates. However, industry experts believe the phase-out of third-party cookies is inevitable, with implications for digital advertising strategies.

X Marks The Drop

Twitter’s ad spending share has decreased almost 60% YoY, according to Guideline, marking a significant shift in social media ad investment. The platform’s share fell from 12% to 5% between September 2022 and August 2023. Guideline compiled this data from invoiced media buys processed by major agency holding companies and independent media agencies, indicating a decline in national brand ad spending patterns on Twitter.

Email Importance

Despite budget reductions affecting many marketers, email marketing remains a top priority, with 78% of marketers prioritizing it. Exclaimer’s research highlights the importance of demonstrating ROI, with 94% of marketers believing consistent branded email signatures positively impact email engagement rates. Additionally, 40% aim to generate 20% or more of revenue from email signatures, emphasizing the value of email marketing in achieving business goals.

Like “AI” Good Neighbor

Local marketers are actively embracing generative AI tools, with 93% having experimented with them. BrightLocal’s Local Search Industry Survey 2023 reveals that 83% of marketers plan to incorporate generative AI further into their roles, anticipating new business opportunities. CMOs are also leveraging generative AI for various purposes, including blogs (64.7%), website content (62.2%), social media (54.6%), and email (54.6%). The potential for generative AI to drive sales, enhance customer satisfaction, and reduce marketing overhead costs is evident.

Email Reliability

The latest research by ISG Research, in collaboration with SeQuel Response, reveals that email marketing remains a primary focus for both B2B and B2C marketers. In a survey of 250 marketing strategy leaders, 62% reported an increase in their email marketing budget over the past year. This budget allocation trend demonstrates marketers’ continued trust in email marketing as a reliable channel for measurable response rates and conversions, particularly in challenging environments. While email marketing saw significant investment growth, other direct marketing channels also received increased budgets. Social media spending increased for 52% of respondents, and 50% allocated more budget to influencer marketing.

Retail Reigns Supreme

Retail dominates digital ad spending in 2023, outpacing the combined spending of the five lowest-spending industries. Insider Intelligence’s report reveals that retail will account for 27.9% of digital ad spend, reaching $73.55 billion. Consumer packaged goods, the second-highest spending industry, is forecast to spend just $39.50 billion. The strong growth in retail’s digital ad spend is driven by increased online purchases, making it a key player in the digital advertising landscape.

Early Adopter Success

Deloitte Digital’s research highlights the growing importance of AI in content marketing. Demand for marketing content has increased 1.5 times, but marketers can only meet this demand 55% of the time. Early adopters are collaborating with AI to enhance and adapt marketing content, with 26% already doing so and 45% planning to by 2025. Gen AI’s positive impact includes higher content quality, employee productivity, and increased content volume, leading to a 12% return on investment for early adopters.

It’s Who You Know

A study by Advertiser Perceptions indicates that over 40% of marketers use first-party data and proprietary identifiers in media-seller transactions. As the industry prepares for a cookieless future, 25% still rely on third-party cookies, and 23% use non-cookie solutions. Marketers are increasingly exploring alternative approaches to maintain effective targeting and measurement.

Agency Uncertainty

The World Federation of Advertisers (WFA) and MediaSense’s report, “The Future of Media Agency Models,” finds that most multinational brands believe their current media agency model needs improvement. Only 11% feel their model suits future needs, with 45% seeking more flexibility and 37% looking for simplification through integrated partners. The report suggests that clients are seeking a more networked model that leverages global agency capabilities for agility and talent. The industry has witnessed consolidation and increased in-housing over the past two years, reflecting a shift in agency models.

Economy Optimism

The Fall edition of The CMO Survey, a collaborative effort by Deloitte, the American Marketing Association, and Duke University’s Fuqua School of Business, provides valuable insights into the marketing landscape. The survey indicates a sense of optimism about the economy, with 49% of respondents feeling more optimistic. However, inflation and uncertainty continue to impact marketing spending, with budgets dropping to 10.6% of company budgets in 2023. Despite these challenges, performance remains strong, with profit growth, company sales growth, customer retention, customer acquisition, and brand value all showing positive trends. B2C Services companies express the highest rate of optimism, followed closely by B2B product marketers, B2B services, and B2C products.

Hybrid Billing

Digital marketing agencies play a pivotal role in today’s business landscape. A recent WordStream report sheds light on the cost structures and services offered by these agencies. The report surveyed more than 300 U.S. and Canadian agencies, revealing that almost half employ a hybrid billing model, combining flat fees/retainers, billable hours, and spend percentage. Notably, flat-fee pricing has become less common, utilized by only 24% of agencies. These agencies typically charge extra for services like landing page creation, image ad creation, and display creative. These offerings are considered time-consuming and require expertise and creativity, making them crucial for successful digital marketing campaigns. Among the services offered by agencies, social ads, content creation, creative services, SEO, search advertising, and email marketing are prominent. These strategies remain accessible and cost-effective, making them reliable options for agencies offering digital marketing services.


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