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Nicholas Kitonyi
Nicholas Kitonyi
Articles (204)  | Author's Website |

Are Companies Ready to Ditch Brick-and-Mortar Marketing?

Many are outsourcing advertising in competitive environment

May 18, 2017 | About:

In every organization, sales and marketing emerge as one of the biggest spenders in a budget year. This is despite the fact that technological advancements have made it simpler for companies to reach out to their prospective customers.

Since the 1990s, it’s been almost mandatory for every business with huge aspirations to have a Web site and a blog. Since the turn of the new millennium, social media has become an integral part of successful sales and marketing campaigns.

We are talking about optimizing businesses for the internet and social media sales. This is a whole new conundrum for traditional marketers who still seem to be convinced that ditching the old tricks could be as catastrophic as ignoring the new ones.

This has left some companies at a crossroads with regard to tweaking their personnel to meet the new requirements in the world of sales and marketing. Some have opted to recruit entirely new teams while others have gone for the mix-and-match strategy including the training of already existing staff.

The other option, which seems to be the most common among organizations, has been to outsource the service to advertising and marketing agencies. There is a good reason why the third option is the most popular among companies.

The most obvious reason is that the company is able to focus on growing the business while leaving out the perplexing intricacies of the internet and social media marketing to the agencies that specialize in that. This is because consumers are now spending too much time browsing the internet and interacting on social media platforms; to reach them via a company Web site, blog or social media account would require the best in class to optimize marketing campaigns and sales mockups.

As such, players like comScore (SCOR), established in 1999, have enjoyed massive success over the last few years with the company’s stock rallying from $13 per share in December 2012 to an all-time high of about $64 in August 2015. And while comScore’s stock price has since declined to trade at $26, this has been attributed to the increasing competition in the market.

1699526366.pngRight now, there are hundreds of digital marketing agencies offering their services at competitive prices. They all range from agencies that provide comprehensive marketing packages to simple search engine optimization (SEO) agencies with prices customized to suit every client’s needs. Companies like comScore are likely to provide more complicated packages to clients as compared to small private agencies where SEO pricing can be provided on a per-client basis.

While the social media and online marketing frenzy may have taken some companies by surprise, it is still too early to completely write off the brick-and-mortar marketing techniques of yesteryear. Often, you are still likely to come across front-door bunny men during festive seasons promoting various products.

In addition, billboard and outdoor advertising are still keeping companies like Lamar Advertising Co. (NASDAQ:LAMR) in business, which means that businesses still place it in high priority when budgeting for their next marketing campaigns.

Therefore, it appears that, despite the emerging trends in online and social media advertising platforms, the traditional marketing techniques will continue to exist in the foreseeable future. Many businesses and companies are yet to grasp the technicalities of optimizing their online platforms for sales, which is why the brick-and-mortar sales and marketing techniques remain a priority in their strategies.

However, with more online and social media marketing agencies being compelled to join the market, getting a third party to optimize a company’s online activity could become easier within the next few years. As such, it remains to be seen how relevant the brick-and-mortar sales and marketing techniques will be as consumer behavior continues to tilt toward online activity and social media interactions.

Conclusion

There are several opportunities in the sales and marketing space. The adoption rate of emerging techniques has increased over the last few years, but there are those who are still clinging to the old tricks of billboard and outdoor advertising.

The impact of various technologies including big data and the Internet of Things could change that soon as consumer behavior continues to lean towards customer activity on various online platforms. Companies like comScore could benefit significantly while the likes of Lamar Advertising might have to diversify their business operations to embrace the changes in the market.

Disclosure: No position in any stock mentioned in this article.

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About the author:

Nicholas Kitonyi
Nicholas is a financial analyst with extensive experience in investment research and stock market analysis. His analysis has been featured on research sites like Seeking Alpha and Benzinga.

Nicholas has solid knowledge of both U.S. and European markets. His investment style is focused on undervalued plays and growth stocks. As a trader, Nicholas classifies himself as a swing trader and likes to trade GBP/USD, gold and FTSE 100, among other liquid instruments.

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