Digital Marketing Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Digital Marketing Services Category Overview

“The digital marketing services category’s growth is driven by the growing online advertising segment a rising consumption and creation of content through digital channels.”

The digital marketing services category is expected to grow at a CAGR of 13% from 2023 to 2030. As a result of the increasing number of people who use and produce content through digital means and the increasing online advertising segment, the market for digital marketing is expected to experience strong future growth. Western European markets, including the United Kingdom, Germany, and Spain, have reported that mobile advertising expenditures, which once accounted for approximately 20% to 30% of total digital expenditure in 2020, currently represent about 39% - 42% of digital spending in 2022 and are expected to surpass 65% - 70% by 2030.

The global digital marketing services category size was estimated at USD 321 billion in 2022. This category is expanding significantly as more customers gravitate toward digital platforms. China, India, and other emerging Asian markets support the industry's growth through increased investment in technology and digital platforms as a result of these markets' positive spending trends in crucial industries like BFSI, FMCG, entertainment and media, and telecommunications. The overall investment in digital marketing in North America and Western Europe has increased because of the growing popularity of online videos and mobile advertising. In the upcoming years, it is anticipated that the expenditure on display advertising in Western Europe will increase even more due to the growing adoption of real-time bidding (RTB) for online display advertisement slots and the rising consumption of rich media and video ads. Developed nations will be the only ones to use digital out-of-home (OOH) media over the projected period. An example of this is the introduction of digital televisions in petrol stations, where most customers watch TV while getting their cars refueled.

Retail and consumer goods companies are increasingly required to compete with larger organizations in an increasingly competitive and innovative market, which is why the retail & e-commerce segment dominated the global digital marketing category in 2022 and will continue to dominate in the future. To raise consumer awareness of their brands and improve traffic to their e-commerce websites, different merchants are enhancing their digital marketing strategies.

Supplier Intelligence

“What is the nature of the digital marketing services category? What are the initiatives taken by the suppliers in this category?”

The global digital marketing services category is highly fragmented with the presence of several players in the market. This category faces fierce competition from players competing to expand their consumer base. In the digital marketing services category, suppliers have taken several initiatives to stay competitive and meet the evolving needs of businesses. These initiatives include investing in cutting-edge technologies like artificial intelligence, machine learning, and social media marketing and strategic collaboration. Moreover, they offer specialized services such as SEO, PPC advertising, and social media marketing, allowing businesses to find the right provider for their specific requirements. Data-driven results are prioritized, with suppliers using data to track campaign performance and optimize outcomes. Suppliers also focus on research and development to keep up with the rapidly changing industry. Building partnerships with other businesses helps in expanding their reach and expertise.

Training and education are provided to ensure employees stay up to date with the latest trends and technologies, while customer service is given utmost importance for maintaining strong client relationships. Investing in data analytics tools enables a better understanding of customer behavior for more effective targeting. Mobile-specific marketing services, like mobile app development and advertising, are being developed to reach customers on their mobile devices. Furthermore, social media marketing capabilities are expanded, encompassing social media monitoring, advertising, and content creation to enhance customer engagement on social platforms. For instance,

• In January 2022 MailUp acquired Contactlab, an Italian customer data and marketing cloud, to expand its email marketing offerings and offer a comprehensive suite of marketing solutions. The combined company had over 9,500 customers and 200+ employees.

Additionally, digital marketing increasingly covers non-internet venues that offer digital media, such as mobile phones (SMS and MMS), call-backs, and in-person mobile ringtones.

Key suppliers covered in the category: 

• Accenture Interactive

• PwC Digital Services.

• IBM iX

• Dentsu International

• iProspect

• WebFX

• Facebook, Inc.

• Google, Inc.

• IAC/InterActiveCorp.

• Noble Studios

Pricing and Cost Intelligence

“What are some of the major cost components in developing or implementing this technology? Which factors impact the cost of digital marketing services development?”

In developing or implementing this category several major cost components need to be considered. The first one is staffing, which varies based on team size, experience, and task complexity. Another significant cost is tools and software, with expenses varying depending on specific requirements and licensing terms. Media buying costs fluctuate based on channels used and chosen targeting options. Content creation expenses depend on content type, length, and complexity. Campaign management costs also vary based on campaign complexity and the support level required. These costs encompass labor, software, media, content creation, and campaign management. To optimize digital marketing campaigns, testing, and optimization costs are essential, ensuring improved performance and effectiveness. In summary, the key cost components include staffing, tools and software, media buying, content creation, campaign management, and testing/optimization efforts.

The following chart provides various costs incurred in implementing these services. The major cost heads are shown below:

Factors impacting the cost of digital marketing/advertising services development are diverse and should be considered during project planning. The project's scope, complexity, target audience, desired outcomes, and time frame significantly influence costs. Additionally, the expertise of the team plays a pivotal role in determining expenses. Other factors include the type of digital marketing service required, with SEO generally costing less than PPC advertising. The location of the team is relevant, as costs may vary based on geographical regions, with the United States generally having higher costs than India. Currency exchange rates can also affect expenses; for example, a decrease in the value of the US dollar relative to the Indian rupee would lead to reduced costs for digital marketing services in India.

Sourcing Intelligence

“Which countries are the leading sourcing destination for digital marketing services development?”

The digital marketing sector is experiencing rapid growth in several countries, making them the leading sourcing destinations for services development. In terms of digital marketing services sourcing intelligence, the United States, India, Australia, Germany, Ireland, the UAE, the Philippines, and the UK are all attracting businesses seeking digital marketing services. The U.S. has a large population, high internet usage rates, and advanced infrastructure, making it a lucrative market for digital marketers. Canada's strong connectivity with North America and its thriving startup ecosystem contributes to the demand for digital marketing services. India's skilled professionals and cost-effective solutions attract businesses seeking high-quality digital marketing services. The UAE serves as a hub for the Middle East and North Africa region, while the Philippines offers a proficient workforce and cost-effective solutions for content creation and social media management. The UK's advanced digital infrastructure and global connectivity enable British firms to effectively utilize online marketing methods, making it a thriving destination for digital marketing services development.

For instance, in 2022, The UK government promised to support educational institutions by contributing an additional GBP 1 billion to digital infrastructure. They aimed to offer more effective online learning possibilities and supply every student with a gadget as a result. More than 95% of young people in the UK are expected to have access to a computer or tablet during the academic year thanks to this investment in 2022.

The performance-based operating model in this category is gaining popularity due to its focus on delivering measurable and impactful results. In this model, service providers are incentivized to achieve specific performance goals, such as increasing website traffic, generating leads, or improving conversion rates. Their compensation is directly tied to the achievement of these objectives, fostering a strong sense of accountability and dedication to success. By closely monitoring key performance indicators (KPIs) and continuously optimizing strategies, providers aim to deliver the best possible outcomes for their clients.

For example, e-commerce companies often embrace the performance-based model to maximize their return on investment (ROI) in marketing campaigns. By setting clear performance targets, such as a target cost-per-acquisition (CPA) or a minimum return on ad spend (ROAS), the service provider ensures that their efforts directly contribute to the client's business growth and profitability. This approach not only aligns the interests of both parties but also allows for agile adjustments to tactics based on real-time data and insights. As a result, businesses can enjoy a cost-effective strategy that consistently drives tangible results and improves their overall digital presence.

The Digital Marketing Services Procurement Intelligence report also provides details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis.

Digital Marketing Services Procurement Intelligence Report Scope