Technological trends have transformed the marketing landscape over the last few years.
Alongside the evolution of targeted marketing, there’s been a steady rise in the popularity of mobile devices, says Michael Orndorff, vice president and portfolio manager at American Century Investments. He co-manages the Renaissance U.S. Equity Growth Fund.
Targeted marketing allows companies to profile customers by capturing people’s purchase data, he adds. Think of online retailers, which often have you sign up for an account so they can track your purchases, as well as stores that offer purchase-based discount and loyalty cards.
The historical method of assessing people’s behaviour was less precise since it involved “using demographic information such as age, gender and zip code” to predict what they may buy.
By leveraging new methods, says Orndorff, businesses are making more informed decisions about how to allocate marketing budgets. They’re then able to outperform in today’s “highly competitive market that [includes] both traditional and online retailers.”
In fact, companies are spending more each year on targeted, online advertising. However, they’re also using traditional media since “we’re still in the early innings of [the shift]…Internet advertising accounts for only 5% of total global media spend,” he adds.
Another change is many businesses have capitalized on increased mobile device use by reformatting their websites, says Orndorff. As such, they’re as easy to navigate for consumers using smartphones and tablets as they are for those using laptops and home computers.
The next related trend, he predicts, could be a rise in the popularity of mobile payment technology. That means companies may look at investing in or developing fingerprint identification technology and other security features to ensure consumers’ privacy is protected.