Digital advertising and social media's tipping point.
Where were you? How could you not see this coming? Why did you miss it? Did you stay informed? Did you read the reports? Did you look at the data? Did you make decisions based on cognitive biases? Or did you let the facts guide you?
Are you ready? Because here we go, and if you are in marketing and advertising your career depends on not missing a step from here.
We are moving at a rate that will not wait for you! And at times you will find it hard to keep up, you may even have to take a deep breath from time to time just to reset.
Welcome to the moment advertising changed forever. The moment digital advertising became "advertising."
Last month Adidas (you know the sneakers everyone seems to be wearing) stated that they are pursuing a digital-only strategy as they chase $4 billion in growth. That's right no TV advertising. Why?
"Digital engagement is key for us; you don't see any TV advertising anymore." Adidas CEO Rorsted told CNBC.
So why are so many companies still wasting fortunes on this medium, when the consumer left the building?
Typically it is a cognitive bias that holds us to positions that no longer work. I would suggest this one is called recency. Since the mid-1950’s effective television advertising has seen sales soar, so we end up believing what has always worked, will continue to work.
In the last 12 months adopting the above digital advertising strategy, Adidas share price has gone from $100 EUR to around $180 EUR.
Why? Because the marketing channels they are using is where the consumer is paying attention. And one of the beautiful things about social media and digital advertising is once the fire is lit, it continues to burn in the form of social proof.
What kicks are you wearing? Me too!
And what is one of the very best forms of advertising? Social proof “a psychological phenomenon where people assume the actions of others in an attempt to reflect the right behaviour.” - Wikipedia
Social media not only lends itself digitally to this form of advertising, but it is also extremely scalable in a world now based on over-sharing.
This should be fascinating to any marketer or advertiser. According to e-marketer worldwide spend on advertising was approximately 542 billion in 2017. Of this digital advertising only generated $60 billion, and social media grew from 55% to $10.9 billion, up from the previous year's $7 billion. What a small representation of the total spend available.
However, 1.2 billion people access Facebook every day and spend close to 50 minutes a day on their entire ecosystem. The very nature of the platform lends itself to sharing and when a brand is concerned this is “social proof.” Or rather the best form of advertising one could hope for. So where are the rest of the brands like Adidas?
The sad reality is most are living in the past, believing what has always worked will continue to do so. While leaders like Rorsted are marketing in the year 2017, and allowing the data to guide their spend. And focusing all their efforts towards digital advertising and actually engaging their target market.
And in turn watching their revenue and share soar.
Well played Adidas, well played!