MATTEO SCHUERCH, FOUNDER AND CEO AT CONVERTO

Can you provide us with an overview of the digital marketing landscape in Switzerland?

The total yearly digital advertising spending in Switzerland is about CHF 1,1 bn. This amount has doubled in comparison to five years ago. Currently in Switzerland only 12% of the total advertising spending is invested in digital campaigns. This percentage is very small if compared to more mature markets such as the USA, where digital will be the largest channel in the media mix for the first time in 2017, absorbing almost 40% of the total advertising spending! Even if the market development in Switzerland does not exactly mirror the USA, this shows how much potential there still is, and how exponential the growth in the Swiss digital advertising sector will be in the upcoming years.

If we have a detailed look at the split of the digital budgets in Switzerland, the two most relevant areas are display advertising (also known as “banner advertising”) and search engine advertising (also known as SEA or Adwords).

 

What is the usual digital marketing mix for an eCommerce active in Switzerland?

eCommerce businesses usually pursue a clear performance approach when it comes to digital marketing. When eCommerces allocate budget for digital campaigns, they aim at achieving a high return on their investment (ROI). The consequence of this approach is that eCommerce companies usually start their marketing activities with channels that reach customers towards the end of their conversion journey, where the acquisition cost is relatively low. In other words, the initial investment is in channels that reach customers who are already aware of the product/service that the advertiser is selling, showed an interested in it and eventually visited their webshop already. Concrete examples are activating the own email database with newsletter marketing or directly communicating through a Facebook community.

Only afterwards, further possibilities higher up in the conversion journey are explored. Example is trying to catch the attention of users already looking for a specific product or service through search engine marketing.

In order to reach new potential customers, an investment at the very beginning of the conversion journey needs to be made. This is usually done via classic channels such as display advertising and video advertising, or via new channels such as feed based advertising.

Experienced marketeers know that even if a performance approach is followed, performance marketing activities need to be combined with a branding/image investment. Branding and Performance go hand in hand and are not replaceable!

 

Which 3 recommendations and tips could you give to our eCommerce associates?

1.     Don’t get blinded by shiny KPIs. It is very important to set a clear and realistic goal before starting a marketing campaign and to define the indicators that sum up the performance of a certain marketing channel. At the same time, marketing managers should never forget that a KPI (Key Performance Indicator) only shows a very specific part of the story. Always step back and contextualize the defined indicator. For example, don’t decide to stop a banner campaign because the click-through-rate is very low. Context is key here, because in fact, only 10% of total internet users click on banners. Banner advertising is very important to spread awareness of your products and its performance cannot be just analyzed with the generated clicks.

2.     Don’t get stuck in a silo. Digital advertising works at its best when planned and implemented as a balanced combination of channels and activities. For example, if you invest in display or video advertising, you should not only evaluate the direct impact of the campaign, but also its impact on the activities of other marketing channels further along in the conversion funnel.

3.     Never compromise on quality! It doesn’t matter what kind of ambitious goal is set, how small your budget is, or how tough your sales goals are. Certain quality criteria should never be compromised. For instance, you should always have a 100%-guarantee on where your advertising is delivered. You invest a lot of money to build up a brand, so do not ruin this image by giving up control over the environment where your creative is displayed.

 

Where do you see the most exciting and important trends of digital advertising for the eCommerce sector in 2017?

eCommerce businesses have the need to advertise products in a fast, efficient and flexible way. In 2017, a new trend is emerging that addresses precisely this challenge: «feed based advertising». Feed based advertising technologies allow retailers and eCommerces to leverage their existing shop-inventory by dynamically pushing products and offering to publisher websites, where users are navigating.

Our company, CONVERTO, has also identified this as the major trend for eCommerce in 2017 and has just released its own feed based advertising solution for the Swiss market. Inside the CONVERTO Feed Master Engine advertisers can see their shop-inventory with existing product information (such as product image, price, name, etc.) and select with a click the products they want to promote to their target group. These products are then dynamically delivered inside Smart Themes (templates) that are integrated into Swiss premium websites. Products are brought to potential new customers without the need of expensive and time-consuming banner creation, adserving, media buying, etc.

One of the great things about feed based campaigns, is that they are live! Let’s discuss a real example from the fashion industry. For the first time, fashion eCommerce can select, edit and exchange in real time the products they want to promote based on external (such as weather, style trends, etc.) or internal factors (such as margin, inventory status, etc.). Feed based advertising technologies basically turn a shop into a dynamic advertising tool! For more information advertisers can visit feed-based-advertising.com or watch the following videos:

German: https://www.youtube.com/watch?v=Rgal5vv7OyA

French: https://www.youtube.com/watch?v=6jMU6iw5DHU