Nielsen: Marketers not getting money’s worth when going digital
GONE are the days where a consumer’s purchase decision could be traced back to a single source.
Various digital actions such as online searches, videos, social media, emails, and podcasts are being leveraged to give a product as much visibility as possible. Just in the US, for example, more than half of all advertising spending is being pumped into digital media.
Today’s marketers recognize the importance of going digital and have invested heavily in initiatives that steer businesses in that direction.
Sadly, despite going all out to pursue a technology or platform, many do not achieve promised results. Understandably, this has dampened the initial enthusiasm marketers have for digital media.
But in this age of constant disruptions, going digital is inevitable.
The key to making the most out of the investment in digital, however — at least according to Nielsen’s latest report — lies in embracing three truths:
# 1 | Make decisions based on data, not gut feel
Marketers often spend the most on novel digital channels, but lack data to back up its effectiveness.
Neilsen’s survey noted that the top paid digital channels that marketers deem most effective are paid searches (78 percent), video (76 percent), social media (74 percent) and email (50 percent).
Yet, the confidence marketers have in these channel’s ability to accurately measure ROI is not aligned.
Take paid searches as an example. Out of the approximate 350 marketers surveyed, 78 percent deemed it most effective, but only 68 percent are confident that it will accurately measure ROI. Email, which was ranked 4th in terms of effectiveness, came up top at 70 percent instead.
Such perilous decision making is, too, reflected in budget allocation.
Marketers often hold traditional and digital media to different standards, banking their hopes on novel, ‘hip’ digital channels.
This can be seen in their willingness to increase spending by a good 49 percent in novel digital media that they consider just ‘somewhat effective’. This is the same thing they would also do for traditional media that has long been proven effective (linear TV, radio, print).
These ‘feelings-first’ decisions can put millions upon millions of dollars at stake.
It is thus imperative that marketers ensure reliable data is the ground upon which decisions are made. To scour for appropriate data will be tedious, no doubt. But get this right, and half the battle will already be won.
# 2 | Work on improving data quality
Data-driven decisions are sound ones, but only if the data is reliable.
At best, poor data quality will not add any value to decision making. At its worst, it can mislead, causing severe financial and reputational damages.
Nielsen’s report noted that data quality (28 percent) falls way down a marketer’s priority list, trailing behind audience targeting (53 percent), and ad creative (37 percent). With such questionable validity, the ‘insights’ gained from poor data is no insight at all.
Thus, it follows that simply gathering data is not enough. To run a truly successful advertising campaign, marketers must invest in obtaining relevant data, sift them through, and then draw actionable insights.
This could mean many things, such as bankrolling a new data analysis program or acquiring/building a specialist team (data engineers, data scientists) especially tasked to manage data.
Ultimately, it should be recognized that analyses produced by poor data will only lead to wasted time and spend.
# 3 | Never under-prioritizing old clients
According to the report, 41 percent of marketers prioritized acquiring new customers, and only a mere 8 percent thought reducing churn as important.
The stark contrast reflects the misconception marketers have about customer loyalty. While it seems as though consumers are constantly trying out newer brands, there is still a good 28 percent of consumers that profess strong faith in familiar brands.
Fifty-percent of global consumers also expressed a preference to stick with familiar brands as long as they are willing to adapt and cater to current trends and evolving consumer needs.
Of course, this doesn’t mean that diversifying the customer base should be ignored-it just means that there should be a balance.
Before starting a campaign, all involved should have a roundtable to clearly communicate end goals, and segment high-value customers to guide targeted marketing.
Ultimately, when it comes to marketing strategy, it all boils down to achieving balance.
Make educated decisions based on data, without focusing disproportionately on a particular channel, digital or traditional. Invest in paid search, video and social media, but do not neglect tried and tested channels.
Utilize all data at hand, but make sure that data is credible. Expand the customer base but don’t cast aside the task of retaining loyal customers.
Finally, it is also crucial to collaborate and engage other industrial players. Fostering meaningful partnerships will pay off as it allows knowledge exchange.
Also, looking inwards, the entire team must be on the same page, possessing the right skill set to enable decision making.
With this, marketers can move forward together, creating more meaningful ad campaigns.
- Execs are drowning under data-driven demands — what’s the solution?
- Qantas is expecting a big pay off from its digital revolution
- Do we have to trade convenience for good cybersecurity?
- Delighting customers in a data driven world requires strong governance
- How FedEx uses technology to delight customers in the digital era