The following post was featured in a report published by EntryPoint, entitled the “2020 Detroit Entrepreneurial Ecosystem Report.” This data-driven document is meant to provide an overview of the economic landscape for Detroit-based start-ups and entrepreneurs. Such a useful view helps inform state, non-profit, and local leaders in the development of entrepreneurial support programs.
As COVID-19 continues to challenge the economy, my thoughts on how things will play out for digital marketing over the next couple of years have certainly changed. I believe we’ll still see growth in digital advertising, but the channel focus and tactics will shift over the next 12 months. Here’s what I think we can expect the future of digital marketing trends to be in 2020.
Performance marketing channels allow you to set a Cost Per Acquisition that you pay only when you get a conversion. It puts more power into the hands of the advertiser, who can scale their payout up or down based on their profitability. When the recession of 2008 happened, many high scale startups we know today grew from these channels, the most notable being Netflix. With more people out of work, there will be more personal blogs and social accounts that are looking to monetize. In 2008, we saw the rise of the Gen X “Mom Blogger”, and I predict we will see something similar with Gen X and millennials in 2020 and into 2021.
Just a few weeks into the coronavirus pandemic, and we are already seeing certain industries reap the digital benefits, especially those who successfully transition into the e-commerce world.. Those include discount retailers, health care, grocery and inexpensive food options, freight and logistics, DIY and repair e-commerce platforms, and stores. During the last economic downturn, we saw these industries thrive, and I believe the same will happen again.
As the consumer spending slows because of COVID-19, direct to consumer brands, that at one time had double digit month over month growth, will see their growth numbers drop significantly. Without the consistent revenue to continue to support overhead, these companies will start looking for an exit while valuations are still high. I predict this market will begin to consolidate through acquisitions.
As company pocketbooks tighten, supply and demand will shift, and CPCs and CPMs will begin to drop. The big digital players in the space will need to offer more incentive to entice companies to attempt to scale on their platform. Facebook and Google will need to adjust their algorithms to ensure companies advertising can continue to be profitable.
The companies that have figured out SEO for their brand will be the ultimate survivors. As they start operating on pared down ad budgets, one of the biggest mistakes they can make is not focusing on growing their organic traffic. The companies that survive this downturn, both B2B and B2C, are the ones who have focused and continue to focus on growing their organic traffic.
Everyone is trying to get in front of the new generation, and TikTok seems to have figured it out. Their next big task is figuring out how to monetize, which is never an easy feat for a social network (i.e. Snapchat and Twitter). If TikTok can get Gen Z to engage with ads that are relevant to them, the way Facebook did with Gen X, millennials, and now boomers, they are in for massive revenue growth and the channel will be the next wild west for advertisers.
Traditional advertising channels will start to mimic online channels and become more digitally focused. In 2019, we saw the rise of Blip, a digital billboard company where you can purchase ads through a digital platform. This gives advertisers more freedom to buy ad space during the times they want to buy, and spend as much money as they want. Over the next ten years, almost all traditional billboards will be replaced by digital smart billboards.
As smart digital billboards begin to take the market share, digital building, bus, and bus stop ads will start to pop up all over the country. This new channel will allow advertisers to purchase ad space in the neighborhoods they want and in cities they are after, to test different messaging and ads. Advertisers will be able to quickly launch a campaign on a bus or at a bus stop in a neighborhood without ever having a conversation with anyone.
A majority of the predictions mentioned above depend on how long we’re in this current situation with COVID-19. If this is just a blip on the radar, everything should go back to normal in a few months. If we’re on lockdown for the next 6-8 months, I expect some, if not all of the predictions above to come true for the future of digital marketing.