Commentary
Research Can Spur The Next Wave Of Digital Media Spending
- by Stephen DiMarco , July 6, 2010
For some time now, I've wondered when the digital media industry will see those oft-promised exponential revenue gains versus the incremental growth of the past few years. Seeking clues, I tend to overanalyze every bit of news, client feedback and analyst report that I can lay my hands on. In particular, I am looking for some form of innovation that reframes the digital opportunity and unlocks media budgets for unprecedented digital spending.
Earlier this month, I came across a ThinkEquity report featuring commentary from Ed Montes, managing director of Havas Digital. Sadly, Montes confirmed that we're still in search of that breakthrough innovation. He reported 8-14% growth in Q2 year-over-year for digital spending, which is nice but still incremental. He also identified the leaders (travel/retail) and the laggards (automotive/CPG), with CPG brands still hesitant regarding online media, given that consumers don't transact online, and online couponing remains limited in the category.
Interpretation: For products where purchases occur in offline channels, marketers continue to struggle to connect the dots between online advertising and brand and/or sales impact. This connection is easy to see when a brand's website is the first and final place a consumer visits when making a purchase. However, once a distribution channel enters into the mix, marketers cling to their old belief systems and online media is relegated to direct-response status. This isn't new news, but despite efforts across the industry, it's a barrier to big growth.
In my last submission I described "The Big Brand Theory" as an initiative we are leading at the behest of our clients and partners to find, measure, and evangelize innovations that make it easier for global brands to invest online. To be clear, CPG and automotive brands do advertise online, but they certainly haven't invested to their full potential. Consumer opportunity and technical capability abound for these brands, but demand has yet to materialize. So our goal is to surface and share examples of where new research techniques are paired with creative user experiences to engineer real brand and sales outcomes.
One idea that our Big Brand Theory attacks is the notion that online media can't be used to drive the very brand metrics that CPG, automotive and other channel-reliant marketers depend on. Despite terrific online advertising effectiveness solutions from companies like Dynamic Logic and Insight Express (and countless publisher studies), brands are still dubious about the benefits of digital advertising. But what if we could expand our measurement approach to incorporate new measures of impact, including:
· What brand-relevant activities exposed consumers conducted -- for instance engaging with a fan page or other social content about the brand.
· What purchase-related behaviors exposed consumers performed, for instance searching, reading reviews, or shopping for a product on a third-party retailer site.
· Cross-tabbing and benchmarking these insights against brand metrics from prior campaigns and industry norms.
In short, by broadening the definition of what constitutes impact, brands could measure and ascribe new value to online media campaigns in a way that strengthens the connection between online investment and real-world ROI. The exciting news is that this capability is possible now, powered by integrating pixel-based ad measurement with panel-based consumer measurement. Compete, comScore and Nielsen all have integrated clickstream-survey ad effectiveness measurement solutions that connect these dots.
And while measurement innovation does not itself validate the existence of new marketing opportunities for the biggest brands, there is compelling data, led by Dynamic Logic, which shows this is a promising new path for brands and media companies alike. The research from Dynamic Logic dispels old myths and demonstrates:
Direct-response ads have brand impact: Comparing the performance of brand-centric ads with ads that had a clear call-to-action showed that there were no differences between brand awareness and purchase intent metrics of each ad category. This held true for even the top performing ads that were tested in the study.
Online response is indeed a brand metric: In looking at the performance of a campaign for a sports drink, exposed consumers showed a 7% lift in brand awareness as reported via a survey, with more than 400% lift in visits to the brand's Web site and 33% lift in product-related searches for the brand. This argument is even more compelling when you include social media interactions as a measure of online response.
Online behaviors identify ad impact that surveys may not: Using an automotive campaign as an example, the research quantified the impact of increased exposure on awareness and purchase intent. Interestingly, while self-reported purchase intent did not increase at higher frequency levels, actual online consideration for the brand did steadily increase. Simply put, expanding the metrics used to measure the impact of a campaign adds new and critical insight.
The Big Brand Theory postulates that the new digital universe cannot materialize until an "innovation explosion" occurs. This doesn't necessarily mean that all of the old principles or techniques are extinct, nor does it devalue other media or research per se. It does mean that exponential growth requiring bold innovation -- like including clickstream behavior as a valid brand measurement metric -- is required for the next big growth phase. And with new, more comprehensive measurement, marketing as a whole can flourish.
Hey Steve:
Unfortunately, I fear your solution is part of the problem.
I think advertisers are yearrning for one simple metric that puts digital into glorious relief. That magic metric that explains in one set of digits exactly why digital should command a greater share of spend.
But there isn't one. There are many. And that has proven vexing.
Meanwhile, TV tells a simple blunt story-- one with lots of GRPs and memorable creative.
What I think you're finding is that for advertisers in different categories, with different objectives, there are different values and metrics that become relevant in online advertising. Unfortunately, this-- let's call it "metric sophistication"-- is often perceived as complexity on the part of the advertiser, and that becomes a barrier to sale... and then the TV networks come in with their single simple story, and they walk away with all the money.
I could say more, but if I did, I'd have nothing left for my next column...
Cheers.
--josh--
Great piece - this is further compounded when dealing with other niche market segments. Segments like outdoor enthusiasts (hunting/fishing/camping etc) where the stagnation is in print ads and untrackable TV.
Sad but true Josh - the question I always ask them is how many sales came from your TV spot?
Any brand that has not yet learned that online works and is more cost effective than traditional advertising channels should be destined to lag their competitors who have figured it out.
There is no magic bullet here. Life is full of adopters and laggards. Let the adopters reap the benefit.
The shocking truth is that the laggards are holding on to beliefs about traditional media that are no where close to reality. Viewers walk out on television commercials. The diminishing set of newspaper readers increasingly look past print ads. And these media are rarely measured.
If a brand team cannot understand online video delivers the rich branding and engagement levels of the "idealized" television spot with the benefit of measurement and direct response, then quite frankly their careers will be limited -- and rightly so.
Hi Steve,
Interesting post. I work in the automotive industry, and find that businesses become quickly frustrated without being able to drive direct-response actions through SM. While your big brand theory is relevant, most interaction with automotive happens on the dealer level, where few innovations ever take place because of risk aversion. There is more fear of trying something that doesn't work than there is of doing something that hasn't worked well forever.
Interesting to hear that brand-centric ads had little to no difference on the relative impact of the brand, when measured against direct response ads. This may be due to the fact that when someone is ready to purchase a big ticket item like a vehicle, they are looking for a communication to make them respond. Usually because it means that the deal and/or vehicle of choice has come into their purview. I think behavioral characteristics in the buying process of each particular item plays a huge role in the acceptance of the type of ad.
Thanks
Therran
I agree with Joshua on this one. After many years working in print with only ad recall studies to rely on, I find it frustrating that so many are still questioning and seeking deeper online measurement. As Stephen points out, there are numerous ways to measure online - moreso than any other medium - and we will continuously be developing more sophisticated ways in this industry but at some point, marketers need to accept the fact that their eyeballs are online, MOST people online do not take an action such as clicking or "liking" and branding online is the most cost effective and efficient way to market a product.
There is quite a lot to chew on in this piece:
1. What impact does creative execution have? Brand executions and DR executions perform comparably as media tests. Were the executions of equal quality? Ideas still count-- and are in fact measurable.
2. A silver-bullet metric that ties all the data together is a goal and would certainly have high market acceptance. Until that day, I believe the present complexity and very real challenges of threading together disparate data points into one whole-cloth analysis elevates the stature of marketers as never before. (This may be wishful thinking.)
3. Channels and brands not in digital are usually on the sidelines for non-ROI reasons in my experience. It has more to do with being comfortable with working a certain way (a way with much more 'soft metrics' than present-day digital) than not being comfortable with the numbers. It's more like muscle memory, in my opinion.
Very nice provocative piece.
Josh -
I waited to read your article to respond. You've got more years in the business than me, but when I talk to our clients about how increasing their digital media investments, they all say that new measurement is paving the way. Not a single one talked to me about storytelling, but they all talked about using rich clickstream data as a way to better understand people and the media they interact with. I agree with you that there is no magic bullet metric - the disruption in the internet audience measurement market highlights that point - that's why I gave three different categories, all consisting of different things to measure, that brands could tap into. Keep the faith!
---Stephen---