Online Marketing in the UK: Which Sectors Benefit Most?

It’s no secret that consumers are becoming more digital savvy and are inclined to shop online. So, how has this trend affected marketing for various industries?

Google’s April 2017 Car Purchasing UK Report showed that £115.9 million was invested in online display and direct mail by car dealers in the UK throughout 2016 — and this isn’t the only sector to take online platforms seriously. With increased interest in online platforms, digital visibility doesn’t come cheap — so, does online marketing benefit all types of business? Vindis, which provides Audi servicing, analyses the current online marketing situation here…

How does online marketing affect the utilities industry?

Interestingly, utilities companies tend to market themselves to existing customers, either as much or more than new customers. For example, British Gas has shifted its marketing aims toward customer retention, as opposed to customer acquisition. Whilst the company recognises that this approach to marketing will be a slower process to yield measurable results, it believes that retention will in turn lead to acquisition. The gas company hopes that by marketing a wider range of tailored products and services to existing customers, it will be able to improve customer retention. An investment of £100 million is to be invested in a loyalty scheme to offer discounted energy and services, which focuses on the value of a customer and their behaviour and spending habits over time to discover what they are looking for in the company.

Digital marketing is a major part of promoting for utilities businesses. 40% of all searches in Q3 2017 in the utilities sector were carried out on mobile, and a further 45% of all ad impressions were via mobile (according to Google’s Public Utilities Report in December 2017). As mobile usage soars, utilities companies need to consider content created specifically for mobile users, as they now account for a large proportion of the market.

However, utilities companies must also consider the authority of comparison websites when marketing. Reportedly, a growing number of consumers use these types of sites to choose the right utilities supplier. With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price in order to stay in the game.

Go Compare, Compare the Market, MoneySupermarket and Confused.com are four of the major comparison sites in the UK, and many believe that these can significantly affect the rate of customer retention for one supplier and the rate of customer acquisition for another. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

How does online marketing affect the automotive industry?

Although most of us are gradually growing in confidence and ability when it comes to online processes, the Google Drive To Decide Report (which was in association with TNS) suggested that the modern car consumer is particularly savvy when it comes to the buying process. Apparently, over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% are using smartphones and 65% choose a smartphone as their preferred device to access the internet. These figures show that, for car dealers to keep their head in the game, a digital transition is vital.

Almost all (90%) of car buyers research products before taking the next step and buying. 51% of buyers start their auto research online and 41% of those use a search engine. To capture these shoppers, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads. This is one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets. Clearly, the sector is doing something right. The automotive industry made up more than one tenth of the total UK digital ad spending growth in 2017, according to eMarketer, just behind retail. Plus, the automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

Although research takes place online, often, buying a car takes place in person. But still, 41% of shoppers who research online find their smartphone research ‘very valuable’, while 60% said they were influenced by what they saw in the media. Of this 60%, 22% were influenced by marketing promotions. Perhaps online investment is worth the investment, even though traditional methods — such as TV and radio — remain the most invested forms of marketing for the automotive sector. Reportedly, in the past five years, digital has made the biggest jump from fifth most popular method of marketing to third — an increase of 10.6% in expenditure.

How does online marketing affect the fashion industry?

If there is one sector that has capitalised on online marketing, it’s fashion. Investments in digital platforms are critical to the success of fashion retailers — with online sales in the fashion industry reaching £16.2 billion in 2017 and expected to grow 79% by 2022.

So, how do current successful brands make a success of online platforms? According to the PMYB Influencer Marketing Agency, 59% of fashion marketers increased their budget for ‘influencer marketing’ last year — an essential marketing tactic in the fashion industry. In fact, three quarters of global fashion brands collaborate with social media influencers as part of their marketing strategy and around 22% of customers are said to be attained through influencer marketing!

Let’s now take a look at online marketing and the UK’s biggest clothing brands. ASOS experienced an 18% UK sales growth in the final four months of 2017, while Boohoo saw a 31% increase in sales throughout the same period. Many big names — such as Marks and Spencer, John Lewis and Next — have invested a lot of money into their digital operations to capture the online shopper and drive sales. In fact, John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

How does online marketing affect the healthcare industry?

Regulations and strict monitoring mean it’s harder for the healthcare sector to market itself as well or freely as others. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

However, the sector always has email as a lucrative form of marketing. Around 2.5 million people use email as the main way of communicating — a figure which has risen over the past few years. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email. Now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audiences.

Reportedly, 1 in 20 Google searches are for health-related information — so clearly, health customers are available online for companies to engage with. In fact, the Pew Research Center data discovered that 77% of all health enquiries begin at a search engine — and 72% of total internet users say they’ve looked online for health information within the past year. But what about which device we use to search for such information? More than 50% of smartphone users have used their device to look up the medical information they require — should health companies be turning their attention to mobile users?

Although you may not think it, social media can be a powerful weapon in the healthcare marketer’s arsenal. While the healthcare industry is restricted to how it markets its services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! Why? The success of social campaigns is often attributed to the fact audiences can engage with the content on familiar platforms.

Is it worth investing more heavily in online marketing?

So, which sectors fare best? In the utilities sector, TV and digital appear to remain the main sales driving forces, however, the authority of comparison sites must also be considered to formulate an effective marketing campaign. For companies specialising in the latest fashion and newest cars, online marketing is clearly something to be heavily invested in. With a clear increase in online demand in both sectors that is changing the purchase process for the better.

Although we’ve looked at how online marketing is affecting businesses today, we must also weigh up how the environment will look in the future. According to webstrategies.com, the average business is expected to assign at least 41% of its marketing budget to online campaigns in 2018 — a figure that will expand to 45% by 2020. Social media advertising investments are expected to represent a quarter of total online spending, and search engine banner ads are also expected to grow significantly — presumably because of more mobile and online use.

In almost all cases, online marketing is a boost for most companies. If mobile and online usage continues to grow year on year at the rate it has recently, we forecast the investment to be not only worthwhile but critical!

 

Sources

https://pmyb.co.uk/global-fashion-company-influencer-marketing-budget/

https://www.prnewswire.com/news-releases/the-uk-clothing-market-2017-2022-300483862.html

http://uk.fashionnetwork.com/news/Online-is-key-focus-for-UK-fashion-retail-investment-in-2017,783787.html#.WrOjxOjFKUk

http://www.mobyaffiliates.com/blog/retail-accounts-for-14-2-of-digital-advertising-spending-in-the-uk-in-2017/

http://www.thisismoney.co.uk/money/bills/article-2933401/Energy-price-comparison-sites-spend-110m-annoying-adverts.html

http://www.thedrum.com/news/2017/03/28/british-gas-shifts-acquisition-retention-marketing-know-the-value-keeping-the-right

https://www.independent.co.uk/news/business/news/uk-companies-online-advertising-spend-10-billion-more-last-year-2016-pwc-a7678536.html

https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014

https://www.kunocreative.com/blog/healthcare-email-marketing

http://www.evariant.com/blog/10-campaign-best-practices-for-healthcare-marketers

https://getreferralmd.com/2015/02/7-medical-marketing-and-dental-media-strategies-that-really-work/

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About Dequiana Jackson

Dequiana Jackson, CEO of Inspired Marketing, Inc., is a small business marketing coach who shows women entrepreneurs how to use solid marketing strategies to turn their life’s passion into a profitable, service-based business. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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