Why are brand marketing budgets tilted towards e-commerce?

This article is going to talk about: Why are more and more companies' marketing budgets slowly shifting towards e-commerce platforms?

It is reflected as follows:

In the past, the marketing budget for e-commerce might only be allocated by the company to the e-commerce department during big promotions such as Double 11 and 618.

But now you will find that companies are investing more and more marketing budgets in e-commerce platforms every year, ranging from the brand's daily routine content and media placement to the brand's important annual marketing campaigns.

The corporate departments that spend marketing budgets on e-commerce platforms have also expanded from just e-commerce departments to now more and more brand marketing departments and even product R&D departments.

Even many high-end luxury brands have begun to open stores on e-commerce platforms and continue to invest marketing budgets in e-commerce marketing and promotion.

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The above-mentioned phenomenon, which reflects the tilt of marketing budgets toward e-commerce, is not unfamiliar to those who have been immersed in the domestic e-commerce ecosystem for a long time, and many operators are also doing so.

However, apart from the experience of "going with the flow", have you ever thought about why this happens? Is it just because the e-commerce channels appear to account for an increasing share of brand sales?

This is my first motivation for writing this article:

I hope that while everyone follows the trend, they will not be pushed blindly, but will truly understand, from an environmental perspective, why marketing budgets are tilted towards e-commerce? So you can judge whether it is necessary for your brand to do this completely? When should we do this to achieve the greatest effect?

However, those senior executives within the company who do not understand the actual operators of the e-commerce ecosystem, especially those foreign companies that are still completely controlled by overseas headquarters, are not so lucky.

They may have realized the importance of shifting brand budgets toward e-commerce, but the biggest challenge they face is: how to explain to these foreign senior executives why they should do so? Why should we snatch budgets from traditional brand marketing departments and invest them in e-commerce?

This is my second motivation for writing this article:

I hope this can help those who need to convince senior management at foreign company headquarters to shift their budgets toward e-commerce, and succinctly summarize the value of doing so.

1. Today’s e-commerce ecosystem integrates “product-efficiency-sales”

In traditional perception, it is difficult for marketing to prove its value, at least the effect is not "obvious", because it feels like the company's marketing department is always spending money without "producing food".

The essence is that in the traditional marketing value chain, "product-effect-sales" are separated.

Needless to say, in the previous era of offline stores, even in the later digital media era, they are still separated, because no ecosystem has truly run a complete closed loop of consumer links.

For example, the most typical example is that Taobao/Tmall used to be e-commerce trading platforms, which only occupied the "sales" end of the marketing value chain; WeChat used to be a social platform, which only occupied the "quality/effectiveness" end of the marketing value chain.

But now it's different.

Today's e-commerce ecosystem can integrate "product-effectiveness-sales" in the marketing value chain.

The reason why we say e-commerce "ecosystem" instead of "platform" is because the current e-commerce platforms are not just trading platforms, but an ecosystem that integrates various value chains such as media, content, services, transactions, and payments. These constitute their value chain that integrates "quality-efficiency-sales".

For example, Alibaba’s omni-channel marketing ecosystem should be considered the most typical and mature e-commerce ecosystem at present. The launched “three-ring” resources have opened up the entire consumer chain closed loop, which is why more and more brand marketing budgets are invested in Alibaba. Especially after the role of Alimama was highlighted, it should have become the most profitable advertising media group at present.

Although JD.com does not have a global ecosystem that sounds as systematic and professional as Alibaba, it is obvious that it has been continuously improving its "quality-effect" part in the brand marketing value chain in recent years.

In addition to transaction-based e-commerce, content/social platforms have also formed their own integrated e-commerce ecosystem in the process of commercialization.

For example, after Tik Tok’s overseas business was hindered, vigorously developing e-commerce became its important strategy. With 600 million DAUs, plus the fact that it is completely supported by its own Douyin store, it is definitely not something that can be underestimated for any link in the marketing value chain. I believe that after the busy Double 11 this year, a large wave of brands will begin to enter the Douyin e-commerce ecosystem. By then, the brand's marketing budget will naturally shift more toward the e-commerce ecosystem.

2. Marketing budget is tilted towards e-commerce, what added value does it bring to the brand?

The above point can basically answer why brand marketing budgets are tilted towards e-commerce, because the e-commerce ecosystem can provide a brand with a marketing value chain that integrates "product-effectiveness-sales".

This is undoubtedly the most correct strategy for brands in the current environment where marketing budgets have been drastically cut and every penny must be spent effectively.

However, we cannot blindly be pushed by e-commerce platforms or even be kidnapped by them.

When brands are considering whether to shift their budgets toward e-commerce and to what extent, they must first consider what added value the brand wants to bring through e-commerce.

The e-commerce ecosystem we talked about above can provide a marketing value chain that integrates "products, effectiveness and sales", but in fact not every brand needs this "trinity" in its marketing actions at any time. Maybe at a certain moment, the brand only needs to focus on one or two parts.

At this time, the brand can actually get rid of e-commerce and do it on its own. Just like before when e-commerce was not so strong, brand marketing activities were carried out according to their own market rhythm.

Why should we consider doing e-commerce at this time? Because it may bring added value to my brand.

For example, the brand itself will have a wave of marketing activities, the purpose of which may be to gain a larger customer base by increasing brand influence. At this time, if you want to cooperate with a marketing IP of Tmall, you may have to increase the original budget to increase your bargaining chips.

So before that, the brand should consider, what added value do I want to get from it? I think if this is the case, the added value that the brand wants should be to break through the circle and acquire customers by leveraging Alibaba's huge pool of people. I think it is reasonable to use this as added value to shift brand budgets toward e-commerce.

Of course, there are many kinds of added value that brands can obtain from the e-commerce ecosystem, such as the replacement of platform traffic resources, the accumulation of brand crowd assets, or simply reaping the benefits of big promotions, or even maintaining a good relationship with the platform so that more resources can be allocated later...

When deciding whether to allocate budget to e-commerce platforms, brands should first think about what added value their brand wants to obtain and whether this cooperation can meet the expectations of their brand.

Conclusion

Back to the title of the article: Why are brand marketing budgets tilted towards e-commerce? This article provides two perspectives to answer these two questions:

One is that from the perspective of the current e-commerce ecosystem, it provides brands with a marketing value chain that integrates "product-efficiency-sales";

The second is to lean towards e-commerce, which can bring certain added value that brands cannot get when they do it themselves.

Author: Pulang

Source: Planner2333