The past decade has seen consumers move their spending habits from more traditional brick and mortar stores to online outlets at a dramatic rate, with many stores such as Debenhams, Marks & Spencer and the Topshop owner Arcadia announcing plans to close physical stores over next year. The internet itself is expected to account for 53% of retail sales in 10 years’ time, from about a fifth at present, according to a report by Retail Economics.
While physical experiences are still valued among many demographics, the evolution of consumer spending is slowly pushing towards a world of online only purchases, accelerated this year by the COVID-19 pandemic, consumers were given a unique window into what the future may hold.
The top line factors driving this evolution are:
- Increased pace and time spent online
- Increasing significance of Gen Z and millennials
- Faster, cheaper in-home deliveries
- Fewer stores drives consumers online
- Better connectivity and more powerful devices
As time has shown, where the people go, branded content will follow, with the internet and digital world accounting for about 73% of all the media consumption… It's not surprising brands are not only moving their stores online, but all advertising efforts too.
For example, when people transitioned from watching live television to ‘on demand’ (YouTube, Netflix, Amazon Prime), brands reacted quickly, adapting their advertising outputs to keep up with their customers' digital habits.
Over on social media this couldn't be more evident, with its rapidly changing landscape, social media is a true disruptor to a brands marketing strategy. New platforms such as TikTok are popping up and dominating this space, forcing brands to adapt to almost overnight, in order to remain in the eye line of their audience.
Gone of the days a brand such as Nike could launch an out of home campaign and feel confident it would still appeal to their consumer 6 months later. Today Nike must play a reactive role in their social community, continuously evolving their ad campaigns, with a responsibility to have an opinion on trending topics and global issues.
We at Genflow have not only experienced the increase in online ads, but have played a role in driving it forward, with people now spending on average 144 minutes a day on social media (up 62.5% from 2012), it is clear the most effective way to budget your marketing spend is ‘online’. Brands must either adapt or get left behind.
This increase in online spend has never been more visible since the global lockdown amid COVID-19, many businesses have deferred canceled or moved their out-of-home campaigns to the digital space, leaving a large question mark over whether ‘outdoor advertising’ is worth the financial ROI in 2020… Why plaster your brand name on busses across London when you could reach a more targeted audience in their own homes?
Unfortunately as more brands move to a digital only approach, oversaturation follows, Genflow's Head of Digital Marketing, Rob Saunders explains “as more advertisers go online - the product owners (Facebook etc) need to find more products within their platforms to accommodate this shift, hence the launch of stories in 2016”.
In just the past month we have seen, YouTube and Instagram begin testing ‘shoppable’ ads on their videos (a clear indication as to the future of e-commerce...), Facebook Gaming debuting live ads for partner creators, and Instagram announcing they will allow creators to monetize their IGTV videos through ad content.
In fact at Genflow we are set to see our own ad spend in 2020 (for our clients brands) to hit a whopping 81% increase over 2019. Our Founder and CEO Shan Hanif explains;
“External factors have played a large role in this increase, with digital consumers now spending 6 ¾ hours per day online… When you look at the data it’s no shock as to why all our arrows are all pointing up. Genflow’s own impressive growth over the past year has also played a dramatic role in this increase, in under a year our team has grown from 5 employees to over 40 and we are still hiring! As the digital space expands, as does the room for Genflow to move around and drive forward our clients ad content, it really goes hand in hand.”
Genflow have always operated one step ahead of the market, and we are often approached with the question, What is the future of ads?
We believe the future of ads will see all marketing activity tracked and measured to create detailed cross-platform customer journeys. Advancements in technology such as augmented reality will begin to play a more important role in driving that process forward, and of course as more people choose online over real life experiences, there will be more options available for advertisers to move around.