Last week Forrester Research released its projections for the growth of the interactive marketing space through 2016. According to Forrester, $77 billion per year will be spent on digital marketing by that time, or roughly the equivalent of television advertising spends today. A few key observations from this research include:
· Interactive marketing has established legitimacy within the marketing mix. Watch for digital programs to become a more strategic outlet for integrated communications.
· Search will lose share among digital marketing tactics, but will still grow into a $33 billion/year channel.
· Display, mobile and social will all enjoy healthy gains. Social will lag behind the growth of the other channels, but only because social executions tend to be less costly.
Clearly, the digital marketing industry is booming. Beyond the obvious growth trend, Forrester's projection that an age of multichannel digital communications is before us is most intriguing. Search is slated to retain its position as the most dominant channel, but tomorrow's search will require an understanding of its role within a larger, more integrated context.
One could point to several factors that lead to these projections:
1. Online consumers are smarter and empowered with more research tools today than ever before. Even the simplest of online transactions is becoming more considered and scrutinized.
2. The evolution of the Web itself has facilitated an environment of research and self-discovery. Consumers are relying on social networks, online reviews, video demonstrations, mobile applications, and other technologies to inform a purchase decision.
3. Smarter data analytics allow for a truer valuation of each online touch point.
It's that last point that holds so much promise for Web marketers. With digital marketing becoming more diversified, it's fair to say that the days of launching a single-tactic campaign and watching conversions roll in are gone. A multi-touch presence is required to engage and convert today's sophisticated online consumer.
The challenge then is how to best optimize across channels.
Google Analytics' Multichannel Funnels
Perhaps it was coincidence that Forrester's research was introduced the same week that Google announced the public availability of its new Multichannel Funnels feature within Google Analytics. Multichannel funnels are intended to empower users of Google Analytics to understand the full range of influences that lead to conversion.
According to Google:
"When a customer buys or converts on your site, most conversion tracking tools credit the most recent link or ad clicked. In reality though, customers research, compare and make purchase decisions via multiple touch points across multiple channels. So marketers that measure return solely on the last channel that a customer touches before conversion are getting an incomplete picture, and potentially missing out on important opportunities to reach their customers."
This form of conversion analysis is referred to as multichannel attribution, and is certainly not a new concept. Early pioneers in multichannel analytics include ClearSaleing, Atlas Solutions, DoubleClick, and Omniture. But these tools have been geared towards the advanced web analyst, and come with premium pricing. Now, Google has introduced similar insights to its users....for free.
Given the latest Forrester data, it seems as if Google has timed this market perfectly, but let's look a bit deeper into the ramifications of these "enhancements."
Google Analytics has somewhat notoriously facilitated the rise of the novice (and often uninformed) Web analyst. Prior to Google (and still to this day for some), organizations shelled out hundreds of thousands of dollars to understand how website visitors came to them and what they did upon arrival. That type of investment isn't insignificant.
Companies that my agency works with who have made similar investments universally have in-house web analytics specialists to make sense of the data, create and share dashboards and reports. Most of our clients who have opted to go the Google route lack a dedicated specialist overseeing data. If anyone is responsible, it's usually a generalist web marketer, or worse, an IT staffer.
I fear that by introducing Multichannel Funnels to these types of users, Google may have just opened up a Pandora's box. Without expert oversight, this data can lead to faulty conclusions and "optimization" efforts that can hurt a company's bottom line.
The Digital Marketer's Role
For the modern digital marketer to flourish in this new multichannel reality, a fluency in data is required. Investigate some of the more popular attribution models online and commit to ongoing experimentation. Modern digital marketers will learn to identify unique marketplace dynamics.
Even if someone else does the number crunching, appreciating the fact that multi-touch scenarios are complex will serve your programs well.