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Still relying on traditional managed services to keep the lights on? You might be irrelevant in the next few years. For smart MSPs searching for a niche, digital marketing is a great place to start.
December 6, 2017
In case you weren’t already convinced that the digital marketing sector is going to continue to explode, new research from Magma provides further evidence that this specialization is a pretty sure bet.
Throughout 2017, there have been around half a dozen topics of conversation (depending which way you cut it) that have come to influence business decisions on every level of the channel, from end user to partner to vendor. Two in particular came to mind when I ran across a nugget in Magna’s Advertising Forecasts Winter Update, released this week: the emergence of digital agencies as legitimate competitors to traditional channel partners, and the increasing warnings from channel experts and analysts that partners need to hyperspecialize if they want to remain relevant.
The statistic, one of many fascinating data points in the report, says that this year digital advertising sales surpassed television for the first time, reaching a 41 percent market share compared to the 35 percent held by TV. Magna also forecasts that digital media sales will comprise 44 percent of total ad sales next year and a full half of total ad spend by 2020, making it a $291 billion market.
Make no mistake, the current race for dominance in niche digital marketing hyperspecializations won’t end anytime in the next few years, but if you’re still waffling on where to focus or dragging your feet getting into the game, you run the risk of falling behind so much that you’ll never be able to catch up.
Let’s do a little test, courtesy of our friend Google. I’ll use my home base of Dallas, Texas, as a sample market, entering each of the phrases below to get the number of search results.
Digital marketing agency “dallas”: 1.78M results
Digital marketing agency “industrial” “dallas”: 917,000 results
Digital marketing agency “industrial” “SMB” “dallas”: 221,000 results
Digital marketing agency “industrial” “SMB” “mobile advertising” “dallas”: 68,000 results
Digital marketing agency “industrial” “SMB” “mobile advertising” “responsive design” “dallas”: 2,840 results
Are you seeing a trend? The more areas of focus you hone in on, the less fierce the competition will be. The first search of a broad horizontal market and specific geography produces a pool of competitors you’ll probably never have a chance of winning against if you’re just now turning your eyes to that niche. The more specific hyperspecializations you add–vertical, company size, specific technology–the more chance you have of success.
Yes, this is completely unscientific research, and many of the results won’t be exact. But if I’m a small to midsize industrial manufacturing company in Dallas, Texas, looking to expand my social community and jump on the mobile ad game, it’s a lot easier to sift through 2,840 results than almost two million.
Speaking of mobile, if you’re trying to predict specific solutions and services that have a bright and sunny future, mobile isn’t a bad place to start. Within that digital advertising market share, more than half is generated by impressions and clicks on mobile devices. Mobile ad sales grew by a whopping 39 percent this year and will comprise 62 percent of all digital ad sales in 2018.
But why stop there? Social and search now represent 70 percent of digital media spend as businesses have seen below-the-line advertising in action. You’ve got to hand it to Trump here: thanks to the Russian election-rigging scandal, there’s no longer any doubt that social marketing initiatives totally work, and organizations poured billions of dollars of spend into that sector in 2017. Overlap those two exploding trends (mobile and social/search) and you get a booming market that’s doing nothing but grow.
See why I say if you’re just now getting into the digital marketing race–or any cloud-based focus game–you’re probably too late to succeed as a generalist? By the time you get your HubSpot certification and settle on your SaaS providers, born-in-the-cloud ISVs and digital agencies will be making bank on mobile applications. When you finally catch up to mobile, there will be a new hot digital marketing trend driving spend–a technological driver that could very well not even be a thing yet. We’re in the nascent stages of VR and cognitive marketing solutions, but you can bet your bottom dollar that those will be huge markets in the next few years.
The frustrating thing is that IT managed service providers are exceptionally well placed to jump on this opportunity. Digital agencies lack the relationships and breadth of expertise that generate customer stickiness; as soon as an organization’s digital marketing spend stops generating results, they’re on the hunt for a new agency. MSPs, with their deep customer relationships and ability to tie marketing spend with other business objectives supported by IT, are much better positioned to overcome that lack of loyalty.
So if you’re still offering generic IT services and solutions but (hopefully) looking to pivot in 2018, skip a few steps and look at what the whippersnapper emerging partners are specializing in. Creating a truly forward-thinking, cutting edge practice will go a long way to closing the gap between you and your competitors.
Head of Channel Communities, Zift Solutions
Kris Blackmon is head of channel communities at Zift Solutions. She previously worked as chief channel officer at JS Group, and as senior content director at Informa Tech and project director of the MSP 501er Community. Blackmon is chair of CompTIA's Channel Development Advisory Council and operates KB Consulting. You may follow her on LinkedIn and @zift on X.
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