Decision Point: “Brands are starting to question if they have over-invested in digital.”
-- Sir Martin Sorrell, founder of WPP, plc
There’s no mistaking that marketers live in a digital world. And yes, the promise of digital media channels is vast, whether you’re talking about data or personalization or reach.
You know there’s a but coming, right? And here it is: But, there’s a good chance your digital buy is out of whack.
Today we’ll look at five questions you should be asking yourself to assess your own digital buy; in part 2 we’ll provide three answers for how you can ensure you're appropriately invested—to maximize marketing lift.
1. Are You Spending Too Much On Digital?
Marketers have a “hardwired tendency to favor the ‘new’ in spite of mounting skepticism about its effectiveness and value.” So said Jac Phillips, Visa senior director and head of marketing, at a 2017 AdNews Media and Marketing Summit. She called this an illogical approach, yet it’s pretty pervasive. According to one study:
“Two-thirds of marketers expect to increase investment in digital media by as much as 40 percent, despite half of the same sample being unable to see the value of digital, Seventy-five percent were unconvinced of its effectiveness and 72 percent think digital has been over-invested.”
2. Are You Experiencing Diminishing Returns?
Spending on digital media already has surpassed the spend on television. But more spending doesn’t necessarily translate into better returns. And this was apparent even three years ago:
“…Many advertisers may be reaching diminishing returns with digital advertising in terms of media budget allocation and impact. Some advertisers are actually risking a decrease in their return on media spend if they pull any further away from traditional channels.”
Why? The AdAge article lists five key reasons, ranging from overcorrections for certain audience segments, to an emphasis on “cheap” rather than “effective,” to a misplaced satisfaction with clicks. And the article makes a compelling case that if you aren’t careful, your ROI for digital can easily take a negative turn.
3. Are You Focused On The Wrong Metrics?
Speaking of clicks and ROIs, that same AdAge piece encouraged marketers to avoid the lure of data, or at least the wrong kinds of data:
“Digital data is enticing. [But] many advertisers focus too much on the mid-level metrics that are rife on digital channels and lose sight of the bottom-line return.…Digital behaviors might be measurable, but that activity doesn't always equate to better sales or brand recognition.”
We’ll just mention the word attribution and leave it at that.
4. Are You a Victim of Fraud?
In an article touting the potential impact of artificial intelligence in marketing (it’s “the new normal”), this bit popped out:
“Ad fraud, as the name suggests, is a scam carried out to generate revenue by creating fake traffic. This is generally achieved by employing bots that mimic human clicks and impressions in order to dupe the advertiser out of ad money. Ad fraud is so rampant that nearly 30 percent of the ad budget lay waste owing to such fraudulent activities.”
According to the article, AI is supposed to take care of a lot of this. But as we’ve seen in the past, a likely scenario is a continuation of this virtual arms race as the scammers and white hats deploy strikes and counter-strikes in an attempt to one-up each other.
Let the ad buyer beware.
5. Do Your Channels Play Well Together?
To maximize the value of using multiple channels, you need to consider your entire mix in a holistic way and analyze everything based on comparable benchmarks. Unfortunately, too many marketers treat digital media as a separate case—which makes it impossible to accurately judge its effectiveness relative to other channels.
Part of the problem? “Many businesses are trying to integrate digital and traditional marketing, but only 1 in 20 have achieved full optimization.” (Smart Insights. 2016) Things may have improved over the past couple years, but for many marketers it still takes conscious effort to treat digital the same way they treat other marketing channels. As a result, to take just one example, “less than a third (28 percent) of brands have integrated digital audience data into their TV ad buys.”