Marketers are adjusting to the pace of change in data, measurement and marketing performance. If you’re like most marketers, your mandate has expanded from an old school “fluffy advertising” creative role to that of revenue driver.
As marketers, our strategies and our marketing spend should equate to trackable ROI. The channels of measurement continue to evolve, and we know it’s simply not enough to advertise at scale. Brands need multiple ways to connect and engage with consumers.
But this ROI mandate is not new. Marketers’ roles have been expanding for years with technology fueling a huge part of this shift. In fact, for the first time, CMO spend in technology is expected to surpass CIO technology spending in 2017. Add the growing number of TV cord cutters across generations and economic backgrounds, and it is clear marketers must continue to pour money into innovative solutions, including emerging media, to seek different ways to engage.
However, a bigger digital advertising budget does not mean more room just to try anything. It means marketers – and by extension agencies – are being entrusted with more accountability to deliver ROI. Marketers need to make smarter, more strategic decisions and closely measure whether campaigns are achieving their objectives.
Digital media has been a tremendous part of the movement toward performance measurement. With digital media, it can be easier to track and visualize success than ever before. However, digital media can be complex. With regular innovations, it seems there are more channels, technologies and strategies to evaluate every day. The continual change has created confusion. As a result, whether selecting partners, media channels or technologies, accountability must be at the forefront.
But how do you measure accountability? It’s all based on ROI.
Let’s take a look what digital media has given us – both the positive and the negative – to better understand how ROI can equate to accountability.
1. Digital Media = Better Targeting
Market trends show that traditional advertising is on the decline. Sure, real-time, must-see sports events (like the Super Bowl, which commanded $5 million per 30-second spot this year) are still in high demand. But, for the most part, advertising budgets seem to be shifting to digital solutions, including ad units displayed in the current “on demand” video platforms like Netflix, Hulu and YouTube.
Digital media expansion and fragmentation, in parallel with programmatic buying systems, has resulted in the ability to target tightly defined audiences and touch them wherever they are. As a result, media waste (the reach of people outside a brand’s target audience) is minimized or entirely reduced.
2. Digital Media = More Data
Digital media buys provide a deeper level of data and control than ever before. Not only can advertisers know where their brands appear, but – for the most part – they can find out who engaged with their brand, when they engaged and what happened after.
With digital advertising, the list of data points available to advertisers appears bottomless. Consequently, it’s taking time for advertisers to get their arms around what they want to track, evaluate and control.
3. Digital Media = Faster Optimizations
With better targeting and greater transparency comes the opportunity to optimize campaigns faster and better. As performance data comes in, it can be evaluated in real time (by machines and people) to identify what is working and what is not. Faster analysis results in faster optimizations. And, the sooner budgets are re-allocated toward higher performing campaigns, the better the overall performance should be.
4. Digital Media = Additional Complexities
Media transparency (including pricing, placements and performance) has become one of the most pressing issues facing marketers today, and there are no simple solutions to resolve this challenge. In general, agencies claim always to do what is in the best interest of their clients. But for most advertisers, there is no clear way of knowing whether or not this is true. As a result, groups such as the Association of National Advertising are starting to review practices to determine whether or not they need to make recommendations for the industry.
Brands Must Hold Agencies Accountable to ROI
No matter the what or the who, much of the accountability in marketing should be based on ROI. Digital advertising allows us to tightly connect advertising spend to sales performance. Although earlier milestones are often measured as an indication of future success, all marketing efforts can and should be evaluated on the final ROI.
If campaigns are appraised in such a manner, practices that artificially raise the cost of media may result in lower ROI. Essentially, those who drive the best results are likely to be the partners you can trust.
As the marketing industry continues its digital transformation, marketers may want to follow suit and set higher agency expectations tied to performance, measurement and accountability. Campaigns that drive growth for brands and media buying systems that deliver transparency will be a win-win for us all.
This post is part of a series of posts, written by members of the DMS team, about the future of advertising. Click below to read additional posts.
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