Since 2017 the internet has been the most important advertising medium in terms of global investment. By 2020, with the pandemic effect, it has become larger than all other mediums combined. This is the clearest indicator of the magnitude and impact of the digital transformation on the Marketing area. But, what are the factors behind this growth?
The evolution of digital technology has enabled the development of three key drivers for transformation in Marketing. The first is the availability of data: everything we do online leaves a detailed data trail. The second is the ability to interact with target audiences: advertising messages become conversations. And the third is the speed of dissemination: information is instantly available and spreads quickly through sharing. These factors do not change the principles of marketing, but they make possible brutal differences in execution.
With digital technology, targeting, i.e. the ability to define and reach a specific audience, moves from contextual ("the topic of this website is interesting to my target audience, so I will advertise here") to personal ("this person had behaviors consistent with those of my target audience, so I will advertise to them"). This enables a much higher level of personalization of the message (for example, the ad before the YouTube video can be edited instantly at click time for each person, according to their specific profile) and a fast, selective reach because it focuses only on the target audience.
It results in communication campaigns that are more effective (due to selective targeting and scale), efficient (due to pay-for-performance, i.e. no concrete results, no costs), and agile (due to the ease of optimization through testing and tweaking). This generates significant market growth because, unlike traditional media, online advertising does not require critical mass for investment. For example, a TV advertising campaign needs an investment in the hundreds of thousands (or even millions) of euros, while an online advertising campaign can be done with a few tens of euros. Thus, small companies that previously did not advertise now do so, and large companies have increased their investments because of the more transparent measurement of results.
However, there is a downside to the digital transformation of Marketing. The same factors that bring the benefits listed above also bring the potential for invasion of privacy, exposure to fraud, unwanted associations with the brand, the spread of fake news, an increased polarization of society, and a host of other problems for which there are no solutions yet. These are complex problems and must be treated as such. A broad social perspective is key to developing viable long-term solutions.
Despite these problems, evolution continues: the portion of life that happens online has increased significantly and does not seem to be slowing down. From the discussion of social concepts such as the metaverse, to the increasing integration of everyday products on the internet (IoT - Internet of Things), to the development and implementation of the necessary infrastructure (e.g. 5G), everything seems to indicate a digital transformation with increasing impact. In this context, it is essential to constantly update skills, not only technical, but also at the level of strategic thinking. This is the role of programs such as the recently created Nova SBE Executive Masters in Marketing & Strategy. After all, Marketing is really at the center of the digital transformation.