The Impact of Digitalization on Marketing Communications:

New Challenges for Branding and Advertising Business

TETIANA USTIK1, VIKTORIIA KARMAZINOVA2, SVITLANA SHURPA3, OLENA ZHUK4,

OLHA BOIKO5, LARYSA RADKEVYCH6

1Department of Marketing and Logistics,

Sumy National Agrarian University,

160 Gerasima Kondratieva Street, Sumy, 40000,

UKRAINE

2Department of Marketing,

State University of Trade and Economics,

19 Kyoto Street, Kyiv, 02156,

UKRAINE

3Department of Management and Marketing,

Vasyl Stefanyk Precarpathian National University,

57 Shevchenka Street, Ivano-Frankivsk, 76000,

UKRAINE

4Department of Economics and Business Finance,

State University of Trade and Economics,

19 Kyoto Street, Kyiv, 02156,

UKRAINE

5Department of Marketing,

Lutsk National Technical University,

75 Lvivska street, Lutsk, 43000,

UKRAINE

6Department of Marketing,

Odessa Polytechnic National University,

Shevchenko Avenue, 1, Odesa, 65044,

UKRAINE

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

WSEAS TRANSACTIONS on INFORMATION SCIENCE and APPLICATIONS

DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

E-ISSN: 2224-3402

344

Volume 20, 2023

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.

Key-Words: - digitalization, marketing communications, branding, advertising business, digital marketing,

traditional media

1 Introduction

Along with the enormous opportunities that

digitalization opens up for branding and advertising

businesses, its introduction entails new challenges

for these areas. The age of digital transformation has

made it easier for consumers to access information

and gives them more control over their choices. The

structure of consumption of sources through which

users receive advertising messages is changing: the

focus is shifting from traditional media (television,

radio, printed sources, etc.) to online media

(websites, applications, social networks, etc.), [1],

[2]. Forecast data points to further growth in online

content consumption: for example, in the US, the

gap between the online and traditional advertising

markets continues to widen, and it is predicted that

in 2026, online advertising spending will amount to

$278 million while spending on television

advertising (the next largest advertising market) will

amount to $72.3 milliard. At the same time, the

growth rate of spending on online advertising will

be 27.5%, and on television advertising — only

1.7% (compared to 2022), [3].

Today, the advertising business must use such a

powerful tool as social media and other digital

platforms for its successful activities. This will help

to set advertising messages and target them to a

specific audience. Furthermore, there is an

opportunity to communicate more closely with

clients, receive feedback and suggestions, and build

relationships based on trust.

The impact of digital transformation on

marketing communications led to the emergence of

the concept of digital marketing. Digital marketing

is the transfer of advertising messages to potential

consumers using various forms of digital

communications, [4]. Digital marketing provides

new ways to reach, inform, and engage consumers,

as well as offer and sell products and services to

them, [5], [6]. The study, [7], notes that the

emergence of digital marketing and various

applications is only the beginning of the journey,

and there are many more transformations awaiting

marketing communications in the future.

High user awareness and the availability of

numerous options to choose from are stimulating

increased competition in the Internet space, forcing

brands to find new ways to attract attention, [8], [9].

Another challenge is related to enabling the active

interaction of consumers with brands, [10]. This

occurs through social media and other platforms and

can have both positive consequences for the brand

(such as increasing consumer awareness of the

brand’s positive qualities) and negative

consequences, potentially damaging the brand’s

reputation.

So, the modern operating environment of brands

requires them to be as flexible as possible and to

respond quickly to changes. Innovativeness plays a

leading role in this process, especially if a proactive

approach to introducing new ideas is used alongside

a reactive one, [4], [11], [12]. Brands should focus

on increasing their presence in digital media, [13],

[14]. The use of personalized communication with

consumers plays a decisive role in this: it is

important to study the consumers’ behavior to

determine their preferences. Besides, an important

direction for creating a brand image today is the use

of so-called influencer marketing, [15], [16], [17].

The concept of influencer marketing involves

famous people in the digital space (for example,

bloggers and other influencers) while advertising

companies. The use of these opportunities should be

accompanied by a thorough analysis of risks

associated with numerous factors - behavioral

characteristics of various groups of consumers,

technological aspects, security issues, etc., [18],

[19].

The aim of the article is to identify the main

challenges that digitization creates for traditional

and digital marketing communications. The aim

involves the fulfillment of the following research

objectives:

- define the role of branding in the digital

environment;

Received: August 14, 2022. Revised: September 15, 2023. Accepted: October 7, 2023. Published: October 19, 2023.

WSEAS TRANSACTIONS on INFORMATION SCIENCE and APPLICATIONS

DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

E-ISSN: 2224-3402

345

Volume 20, 2023

- outline the key challenges for the advertising

business in times of digital transformation;

- analyze trends in digital advertising spending;

- conduct a SWOT analysis of branding and

advertising business in the era of digital

transformation;

- provide a general assessment of the impact of

digitalization on marketing communications and

offer recommendations for adapting branding and

advertising business to the new challenges of the

digital era.

2 Literature Review

Key aspects of digital marketing are studied in

work, [4]. The researcher compares traditional and

digital marketing, the main elements of digital

marketing, the reasons for the growth of the digital

marketing market (using the example of India), and

challenges for the development of digital marketing.

The study, [20], concludes that digital marketing is

an integral part of the strategy of modern

companies. Researchers, [21], [22], also study

digital marketing tools, compare them with

traditional marketing, and identify opportunities and

challenges for their development.

A significant challenge for digital marketing is

the behavior of consumers of different age groups.

The study, [23], studies the effectiveness of

marketing communications for millennials and

Generation Z as the largest age cohorts in the United

States.

The work, [24], covers the aspects of modern

marketing through the concept of Marketing 5.0.

This concept implies the use of technologies

imitating human behavior to create, communicate,

deliver, and increase value during a consumer

search.

Researchers in work, [25], identify the place of

marketing in the sharing economy. From the

researchers’ point of view, the sharing economy has

a significant impact on the traditional foundations of

marketing.

The article, [26], reveals the concepts of “liquid

consumption” and “solid consumption”. The

researchers study the impact of liquid consumption

on various aspects of marketing, in particular its role

in the further development of branding.

Sustainable development is another modern trend

affecting marketing. The study, [27], notes that the

Internet has created one of the biggest challenges for

marketing, and a key tool to overcome them is

digital marketing. Along with this, another problem

appears in the way of marketing development —

compliance with the requirements of sustainable

development. The researchers conclude that the

concepts of digital marketing and sustainable

development can complement each other in many

ways.

Finally, marketing is influenced not only by

modern global trends, but also by global crisis

phenomena, and the role of digitalization is often

decisive in this process. There is a lot of research on

the impact of the COVID-19 pandemic on

marketing. Researchers, [28], believe that this

global crisis has allowed companies to move to

more honest, transparent marketing that allows

solving several environmental and social problems.

The conducted analysis of the literature gives

grounds to identify issues that have not been studied

in academic periodicals. It is worth conducting a

more in-depth analysis of the effectiveness of

companies’ advertising spending, as well as

studying the impact of advertising spending on

advertising revenue and the number of customers.

3 Methodology

3.1 Research Design

The study consists of three consecutive stages. The

first stage involved identifying the trends of

spending on digital advertising in the world using

the methods of horizontal and vertical analysis. The

data were collected using the Statista, [29], resource

for 2017 to 2027 (including projections). The

following indicators were analyzed: digital

advertising spending worldwide, advertising

spending share desktop and mobile, average

advertising spending per Internet user by segment,

etc.

The second stage includes a correlation analysis

between metrics such as Net Ad Revenues, % of

Total Digital Ad Spending, and Number of users.

The analysis was carried out for Facebook and

Amazon, which provide the data for the US. Table 1

and Table 2 contain source data for the analysis.

Table 1. Source data for correlation analysis of

Facebook indicators

Year

US Facebook Net

Ad Revenues

% of Total Digital

Ad Spending

Number

of users

2019

31.27

23.6

223.42

2020

38.09

24.9

235.36

2021

50.3

23.8

238.03

2022

58.11

24.2

240.83

2023

65.21

24.1

243.58

Source: built by the author based on, [30].

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DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

E-ISSN: 2224-3402

346

Volume 20, 2023

Table 2. Source data for the correlation analysis

of Amazon indicators

Year

US Amazon Net

Ad Revenues

% of Total Digital

Ad Spending

Number

of users

2019

10.32

7.8

124

2020

15.73

10.3

142.5

2021

24.47

11.6

148.6

2022

31.81

13.3

153.1

2023

39.45

14.6

Source: built by the author based on, [30].

The third stage provides a SWOT analysis for

branding and advertising business in the context of

digital transformation. SWOT analysis was chosen

for aggregating the findings obtained during the

research and grouping them according to the

corresponding quadrants of the SWOT matrix.

3.2 Sample

The first stage of the study involved the analysis of

digital advertising spending according to global data

to obtain a general idea of modern trends in the field

of digital advertising.

The second stage provided for choosing the

country for analysis. The USA was chosen as it has

the largest digital advertising market in the world in

terms of advertising spending, [29]. In turn,

Facebook and Amazon were chosen because of their

leading positions in the US digital advertising

market.

3.3 Methods

The first stage of the research implied the methods

of horizontal and vertical analysis. These methods

were used to identify the trends and structure of the

studied indicators. In the second stage, the strength

of the relationship between the studied indicators

was identified using the method of correlation

analysis. In the third stage, the SWOT analysis

made it possible to summarize and reduce the data

to determine the general horizon for advertising

companies and can be used to optimize marketing

strategies taking into account the existing potential

and prospects.

4 Results

4.1 Analysis of Advertising Spending

Digital marketing can be identified as a key

reference point for the advertising business in the

future. Most of the existing companies in the world

recognize this trend, which can be demonstrated by

the growth of global digital advertising spending,

including its projected increase by 2027 (Figure 1).

As can be seen from Figure 1, significant growth in

advertising spending is forecast until 2027. Among

the presented segments, the most noticeable growth

trends are advertising videos, search, and banner

advertising. The industries with the highest digital

ad spend to date are shown in Figure 2.

The retail industry spends the most on digital

advertising. Consumer goods are in second place.

From this, we can conclude a modern feature of

consumer behavior - the tendency to order everyday

goods via the Internet. The increase in demand,

accordingly, causes the desire of companies to draw

attention to themselves by increasing spending on

digital advertising.

Figure 3 shows the share of advertising spending

intended for viewing through mobile devices is

increasing compared to advertising spending for

viewing through a desktop. The predominance of

mobile advertising spending is set to continue to

grow. By 2027, the share of advertising spending on

mobile devices is predicted to grow to 68.7%, while

its share was 46.4% in 2017, [29].

It is also important for the advertiser to consider

the trend for advertising distribution channels. The

forecast in Figure 4 demonstrates significant growth

of in-application advertising spending, some decline

in social media advertising spending, and a

significant decline in advertising spending through

other channels (for 2017 to 2027).

Figure 5 shows the average digital advertising

spending per consumer by segment. The greatest

growth is expected from spending in the in-

application segment, followed by search advertising.

These two segments are the leaders among those

presented since 2017. At the same time, the largest

advertising expenditures were made in the "search

advertising" segment, but increasingly large

amounts of expenditures are directed to advertising

in applications. This is likely due to apps' growing

popularity and advantages over web searches.

So, digital advertising spending in general is

predicted to grow in the near future. At the same

time, advertising spending through smartphones will

take an increasingly large share of spending, and the

most popular segments of spending are in-

application advertising and search advertising.

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DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

E-ISSN: 2224-3402

347

Volume 20, 2023

Fig. 1: Digital advertising spending worldwide

Source: built by the author based on, [29].

Fig. 2: US Digital AD Spending Share, by Industry, 2023

Source: built by the author based on, [31]

Fig. 3: Advertising spending share desktop and mobile in 2023 (%)

Source: built by the author based on, [29].

Fig. 4: Advertising spending share

Source: built by the author based on, [29].

243,1 304,95 365,77 433,47

568,63 614,48 679,7 740,28 798,73 855,01 910,2

200

400

600

800

1000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

in billion USD (US$)

Audio Advertising Banner Advertising Classifieds Influencer Advertising

Search Advertising Video Advertising Total

27,90%

15%

11,40%

8,40%

7,30%

7,20%

5,70%

5,40%

2,60%

Retail

Financial services

Healthcare and pharma

Telecom

Media

Other

63,6

36,4

Digital

Advertising

Mobile

Digital

Advertising

Desktop

21,1 24 26,7 30,6 31,8 30,8 30,5 29,7 28,8 27,9 27,2

31,6 34,1 37,4 40,2 42,5 44,4 46,3 47,6 48,9 49,9 50,8

47,3 41,9 35,9 29,2 25,7 24,8 23,2 22,7 22,3 22,2 22

100

120

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

year

Social Media Share In-App Share Other

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Fig. 5: Average advertising spending per Internet user by segment

Source: built by the author based on, [29].

4.2 The Relationship between Advertising

Spending Growth and Net Advertising

Revenue at Facebook and Amazon

In this section, it is proposed to analyze how the

increase in the volume of advertising spending

affects the profit and the number of users of

individual companies. It is suggested to consider the

indicator Percentage of Net Revenues in Total

Advertising Spending instead of the absolute

indicator Total Advertising Spending. A relative

indicator is used instead of an absolute one for a

more qualitative assessment of the effectiveness of

advertising spending and demonstrates the

profitability of advertising spending. In other words,

it shows how effectively advertising spending

affects the increase in Net Ad Revenues. Figure 6

and Figure 7 show the dynamics of Net Ad

Revenues and their share in Total Ad Spending for

Facebook (Figure 6) and Amazon (Figure 7).

Fig. 6: Dynamics of indicators of Net Ad Revenues

and their share in Total Ad Spending for Facebook

in the USA

Source: built by the author based on, [30].

Fig. 7: Dynamics of indicators of Net Ad Revenues

and their share in Total Ad Spending for Amazon in

the USA

Source: built by the author based on, [30].

As it can be provisionally noted, although the

advertising revenues at Facebook have grown

steadily throughout the studied period, the share of

these revenues in the total advertising spending does

not show stable growth and varies between 23.6%

and 24.9%. At Amazon, trends in advertisement

revenues and their share in total advertisement

spending are growing almost synchronously.

A correlation analysis was conducted between

such indicators as Net Ad Revenues, % of Total

Digital Ad Spending, and Number of users for a

more detailed analysis. Table 3 and Table 4 show the

correlation matrices separately for Facebook and

Amazon.

21,51 26,78 32,14

38,06

49,79 53,42

58,99 63,7 68,26 72,34 76,41

1,69 2,08 2,79 3,51 4,61 5,16 5,78 6,34 6,87 7,39 7,9

29,46 33,89 35,62 36,59

47,45 49,31 52,39 55,39 58,43 61,47 64,44

14,36 18,89 22,93

29,01

37,28 37,12 38,84 39,7 40,2 40,53 40,88

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

in USD (US$)

Audio Advertising Banner Advertising Classifieds

In-App Advertising Influencer Advertising Search Advertising

Social Media Advertising Video Advertising

31,27 38,09

50,3 58,11 65,21

23,6

24,9

23,8

24,2 24,1

22,5

23,5

24,5

2019 2020 2021 2022 2023

US Facebook Net Ad Revenues

% of Total Digital Ad Spending

10,32

15,73

24,47

31,81

39,45

7,8

10,3 11,6 13,3 14,6

2019 2020 2021 2022 2023

US Amazon Net Ad Revenues

% of Total Digital Ad Spending

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Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

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Table 3. Results of correlation analysis for Facebook

Indicator

Averages

Standard

Deviation

US Facebook Net

Ad Revenues

% of Total Digital

Ad Spending

Number of

users

US Facebook Net Ad Revenues

0.000000

1.000000

0.025158

0.918321

% of Total Digital Ad Spending

0.000000

1.000000

0.025158

1.000000

0.362991

Number of users

0.000000

1.000000

0.918321

0.362991

1.000000

Source: calculated by the author based on, [30].

Table 4. Results of the correlation analysis for Amazon

Indicator

Averages

Standard

Deviation

US Amazon Net

Ad Revenues

% of Total Digital

Ad Spending

Number of

users

US Amazon Net Ad Revenues

-0.320404

0.805569

1.000000

0.975681

0.913362

% of Total Digital Ad Spending

-0.291095

0.876598

0.975681

1.000000

0.975231

Number of users

0.000000

1.000000

0.913362

0.975231

1.000000

Source: calculated by the author based on, [30].

Table 5. SWOT analysis of branding and advertising business in the era of digital transformation

Strengths

Weaknesses

A wide range of advertising distribution tools

Relatively lower costs, including for the promotion of goods

Interactivity in communications with consumers

The possibility of providing related services (public relations,

sales, customer service, information services)

Ease of making changes to advertising campaigns

Global reach and greater customer engagement

Results that are easy to measure

Customers' awareness of innovations

Access to a large number of products in one-stop shop

Technological aspects

The digital divide

The need to integrate online and offline marketing strategies

Distrust of online shopping and sellers

High costs related to technological aspects (site creation,

maintenance, application development, etc.)

Organization of delivery

Opportunities

Threats

High-cost efficiency provides proper cost management

Higher speed and effectiveness

Availability of devices (smartphones, personal computers, etc.)

High Internet speed, increased coverage

Increased security

Affordable prices

Ability to compare prices, product characteristics

Application of purchase incentives (coupons, promo codes,

discounts, etc.)

Various payment options

Personalized communications with consumers

Ability to provide comprehensive, complete, and unified

information about the product

Cyber security breach, fraud

Dependence on the power system, access to the Internet

Delivery failures

The inability to evaluate the product in reality during the

purchase, as a result — the possibility of rejecting the product

and related costs

Inaccuracies/gaps in the legal framework

Receiving negative feedback about a company or product

The possibility of luring customers by other firms

Poor marketing strategy can damage the brand by losing user

trust (for example, the appearance of brand advertising on

dubious sites, excessive advertising, etc.)

Some restrictions on the range of products that can be sold online

Source: built by the author

Evaluation of the obtained results according to

the Chaddock scale, [32], found a very strong

relationship (0.9 - 0.99) between Net Ad Revenues

and % of Total Digital Ad Spending for Amazon.

The indicator reaches 0.98 (the higher the value, the

stronger the relationship). At the same time, there is

almost no relationship for Facebook — only 0.03.

The relationship between Net Ad Revenues and

the Number of users is very strong for both

companies: 0.92 for Facebook and 0.91 for Amazon.

The relationship between % of Total Digital Ad

Spending and Number of users is moderate (0.3 -

0.5) for Facebook (0.36) and very strong for

Amazon (0.98).

The obtained results give grounds for an

assumption that the effectiveness of advertising

spending for the studied companies is not the same.

For example, at Facebook, the change in % of Total

Digital Ad Spending has little to do with the change

in Net Ad Revenues and little to do with the change

in the Number of users. For Amazon, the

relationship between both pairs of indicators is very

strong. So, it can be concluded that when spending

more on digital advertising every year, Facebook

will also receive more net ad revenues, but its share

in total spending does not change, decreasing from

time to time, remaining within the range of 23.6%

and 24.9%. The profitability of the company’s

advertising spending does not have a sustainable

upward trend. For Amazon, the situation is different

– together with the growth of advertising spending,

the share of net advertising revenues in such

spending also increases (from 7.8% to 14.6% for the

period under study), which indicates a significant

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Tetiana Ustik, Viktoriia Karmazinova,

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increase in the profitability of advertising spending

for this company (although overall Amazon’s

profitability is lower than Facebook’s). At the same

time, there is a relationship between the growth in

the Number of users and the share of revenue in

total advertising spending. It can be assumed that

the increased number of users is one of the reasons

for the increased share of revenues in spending.

4.3 SWOT Analysis of Branding and

Advertising Business in the Era of Digital

Transformation

The conducted analysis revealed key challenges and

opportunities for branding and advertising

businesses in the era of digital transformation. It is

suggested to use the SWOT analysis for this purpose

(Table 5).

Branding and advertising businesses certainly

have wide prospects in the future. Several existing

weaknesses and threats are leveled, for the most

part, through proper selection and effective

implementation of branding and advertising

strategies, correct selection of technologies,

specialists, market segments, etc. In other words, the

success of branding and advertising business

depends primarily on internal factors. The influence

of external factors is also significant, but effective

proactive and reactive measures can contribute to

adaptation to external threats.

5 Discussion

The article examines the key challenges of branding

and advertising business, investigates some trends in

the field of digital marketing, and also provides a

SWOT analysis of branding and advertising

business in the era of digital transformation. The

study provides general aspects for the field of

marketing, but they may differ slightly depending

on the region. The study, [4], provides a list of

challenges for digital marketing using the example

of India: technological problems, the difference in

the behavior of wealthy and poor users, problems of

coordinating online and offline strategies, the

“female” factor (the majority of Indian women who

make decisions about purchases lack of so-called e-

literacy skills), high customer engagement costs,

problems with online payment and consumer trust,

low customer loyalty and low probability of repeat

purchase, overhead payments (high percentage of

returns), high technology costs, imperfection of

supply chains, ineffective management of

relationships with customers. The researcher’s

conclusions give grounds to note regional features

of branding and advertising business along with

global trends. The advantage of the author's work is

the availability of calculations that allowed us to

quantitatively show the effectiveness of spending on

digital advertising, which made it possible to

thoroughly form and explain the list of challenges

for branding.

Archana in work, [20], singles out four main

disadvantages of digital marketing: the possibility of

poaching customers by other companies, damage to

the brand caused by excessive advertising, potential

damage to the image by certain individuals or

groups of persons, limitation of the range of goods

that can be sold over the Internet. Researchers in the

article, [21], express a similar opinion. According to

them, the challenges of digital marketing include the

risks of hacker attacks, activities directed against

individual brands, limited access to the Internet,

high competition in the digital space, etc. The

advantage of the author's work over the mentioned

studies is the consideration in the approach and

quantitative calculation of the effectiveness of

digital advertising costs because the low

effectiveness of such costs can become a significant

challenge for brands along with the problems noted

by scientists.

In the work, the authors, [22], identify the

challenges entrepreneurs face when implementing

and developing digital marketing: building a brand,

generating traffic and potential customers, managing

a website, ensuring budget efficiency, understanding

tools and technologies, producing the right content,

finding talent marketing employees, determination

of return on investment in marketing, team training,

promotion of increasing consumer engagement. In

contrast to this work, the author’s article considered

the challenges for existing brands and advertising

agencies after the implementation of digital

marketing. At the same time, it should be agreed

that the success of further actions largely depends

on the initial stage of introducing digital tools and

creating a brand on the Internet.

Several papers note the challenges for digital

marketing related to the difference in generational

experience. The study, [23], reveals the specifics of

the consumer behavior of millennials and

Generation Z regarding the perception of marketing

communication and advertising on the Internet. The

researcher notes that these users who cope with

digital technologies well tend to get distracted by

doing many different activities online at the same

time. Therefore, marketers should use certain

incentives to attract consumers’ attention: popular

music, humor, involvement of influential people to

convey the message, and short duration (up to 30

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DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

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seconds). The article, [24], states that the concept of

Marketing 5.0 emerged against the background of

three main challenges: the generation gap,

polarization, and the digital divide. The researchers

note that it is the first time in the world that five

generations living on the planet at the same time

have contrasting attitudes, preferences, and

behavior. Baby Boomers and Generation X have the

highest purchasing power, while Millennials and

Generation Z make up the main part of the

workforce and cope with technologies well. These

works reveal aspects of the dependence of the

success of marketing strategies on taking into

account the differences in the preferences and views

of different generations, which were not studied in

the article. Therefore, this direction should be taken

into account in the author’s further research in the

field of branding and advertising business.

The authors in, [25], [33], are convinced that one

of the significant challenges facing modern

marketing is the development of the sharing

economy. According to the researchers, the sharing

economy affects such fundamentals of marketing as

institutions (including users, companies, regulators),

processes (including branding, innovation, etc.), and

value creation (for users, companies, and society).

Regarding branding, the researchers note that the

role of brands in the sharing economy is changing

significantly: there is a significant difference

between the brand of a platform and the brands that

consumers access through that platform. The article,

[26], found that sharing economy brands have less

impact than the brands they own – particularly on

building identity and brand attachment. In both of

these studies, scientists touch on a topical topic - the

impact of the sharing economy on branding. This

influence is manifested through a change in the role

of brands, which does not always have positive

consequences for them. Therefore, not taking into

account the impact of the sharing economy in the

author's article is a shortcoming of the work that

should be corrected in further research.

The relationship between digital marketing and

the concept of sustainable development is another

topic not covered in the author’s article.

Researchers, [27], note the benefits that the concepts

of sustainability and digital marketing provide to

each other. Sustainability improves supply chains,

provides access to professional investors, increases

employee motivation, and promotes product

differentiation. Digital marketing enables a better

understanding of consumer behavior.

Comparing the results of this study with the

author's work, the latter lacks consideration of

aspects of sustainable development, such as an

analysis of whether green marketing tools affect the

effectiveness of digital advertising spending.

Studying digital marketing during the COVID-19

pandemic, researchers, [28], proved the positive role

of digitalization in improving communication with

consumers during the crisis. The researchers also

found a positive impact of digitalization on

branding, which can use social data and consumer

information to increase personalization and identify

changes in customer requirements. These findings

confirm the author’s views that successful branding

and advertising strategies can help brands and

advertising agencies adapt to external challenges.

6 Conclusions

An analysis of the world’s digital advertising

spending revealed stable trends in their growth.

Further growth of such costs is predicted. An

increasing share of spending will come from

smartphone advertising spending, with in-app and

search advertising the most popular spending

segments. Social media also plays a significant role

in the distribution of digital advertising.

The results of the correlation analysis suggest

that the effectiveness of advertising spending for

Facebook and Amazon is not the same. Facebook

spends more on digital advertising, but the share of

net advertising revenues in total spending remains

almost unchanged, ranging between 23.6% and

24.9%. Therefore, the profitability of the company’s

advertising spending does not have a definite

upward trend. At Amazon, the growing advertising

spending entails the growth in the share of net

advertising revenues in such spending (from 7.8% in

2019 to 14.6% in 2023), indicating a growing return

on advertising spending. There is a relationship

between the growth in the number of users and the

share of revenues in total advertising spending for

Amazon. The growth in the number of users is one

of the probable reasons for increasing the share of

revenues in spending.

Summarizing the results of the SWOT analysis, a

general assessment of the impact of digitalization on

marketing communications can be provided. First of

all, this influence is expressed through the expanded

capabilities of these areas to improve the

effectiveness of marketing communications through

more personalized communication with customers,

directing advertising to the target audience, using a

creative approach, etc. Existing challenges are

concentrated around issues of information security,

increased competition, possible harmful effects on

brand reputation, technological aspects, choosing an

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DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

E-ISSN: 2224-3402

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appropriate branding strategy and advertising

strategy, and other issues.

In this regard, the following recommendations

can be provided to adapt branding and advertising

business to the new challenges of the digital era:

increase the presence of brands in the digital

environment, use influence marketing tools,

increase flexibility and adaptability, conduct

constant monitoring, be innovative, apply both a

reactive and a proactive approach in building

strategies, invest in priority segments of the digital

advertising market.

Further research may focus on building an

effective brand strategy in the digital sphere using

the example of an individual company.

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DOI: 10.37394/23209.2023.20.37

Tetiana Ustik, Viktoriia Karmazinova,

Svitlana Shurpa, Olena Zhuk, Olha Boiko,

Larysa Radkevych

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