The Impact of Digitalization on Marketing Communications: New Challenges for Branding and Advertising Business

Abstract

Studying the prospects of branding and advertising business in the context of digital transformation is important in view of the influence of these areas on the formation of consumers’ views and beliefs, and ultimately - trends in their demand for goods and services. The aim of the article is to identify the main challenges that digitization creates for traditional and digital marketing communications. The research employed the methods of horizontal and vertical analysis, correlation analysis, and SWOT analysis. The study identified the key challenges for branding, which include wide access of consumers to information on the Internet, which increases competition and forces brands to find new ways to attract customers’ attention. Another challenge is the potential damage to a brand’s reputation because of increased interaction with consumers. These factors force brands to constantly adapt, strengthen their presence in the digital environment, use influence marketing tools, and increase personalization. At the same time, digitalization opens up a number of new opportunities for the advertising business, in particular, new ways of reaching, informing, and attracting consumers, as well as offering and selling them products and services, enabling a more creative, individual approach. However, implementing advertising strategies requires proper skills. The study found that digital advertisement spending is trending upward, especially in the digital applications and search advertising segments. A SWOT analysis showed that the branding and advertising business has great opportunities, and successfully implemented branding and advertising strategies can contribute to the elimination of weaknesses and threats. The research results can be applied in the practice of advertising agencies and companies by using the proposed approach to evaluate advertising costs' effectiveness. This study corresponds to the theme of WSEAS Transactions on Information Science and Applications because its content correlates with digitalization, digital communications, and advertising on the Internet, which, in turn, are closely related to the development of information technologies.