Commentary

On Cross Media Optimization and Finding that Right Mix

As I watched the presentations at this week's IAB Ad Forum, I kept wondering how the ratio of 15% for interactive's portion of the media mix kept seeming to be the ceiling. Almost every cross media study released thus far proposes an optimal figure between 10% and 15%.

This seemed to run counter to what many of the campaigns I'd worked on over the past years would indicate. Like many in our industry, I've thought that well executed interactive should be a much higher percentage of the mix, and that, especially if it is well executed interactive we're talking about, it could be as much as half of an entire spend, depending on the objectives of a given campaign.

Especially with some rich media case studies coming out that indicate 100% ROI within 30 days, how could any other media type match the performance of interactive? Is there really a ceiling of sorts under which interactive's ratio in the mix should appropriately remain?

I spoke to Rex Briggs, the principal analyst for Marketing Evolution, the company conducting the IAB research. Listening closely to a smart researcher discuss a topic of interest is always elucidating, of course. But even though I reached him prior to 7:30 AM his time, Mr. Briggs was particularly helpful.

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It makes perfect sense that an over-saturation of any one media type would eventually produce diminishing returns. What surprises me is how different these ratios are for different kinds of products.

"What we're seeing is a consistent pattern in these cases, probably owing to the kinds of products whose marketing campaigns are being tested," said Mr. Briggs. "Television is naturally going to be a big component of these consumer products' campaigns. And since we're talking about ratios in terms of budget, the consistency of CPM rates across these media has been fairly steady. Obviously, if a marketer wants to reach teens primarily instead of males between the ages of 45 and 60, there will be a shift in the optimal ratios."

So, there are organic drivers for each kind of product that will create that ratio. Makes sense, doesn't it?

Since the IAB invited members to submit campaigns on behalf of multiple products across multiple categories, from CPG to automotive to pharmaceutical, to the Cross Media Optimization Study (XMOS), there will be many different types from which to choose. For now, 15% is hardly a bad place to start, and with Ford up next I'm looking forward to that number rising.

Speaking of rising, the pharmaceutical segment seems to hold a great deal of promise in terms of campaigns that would benefit from more interactive spending, if for no other reason than because of Interactive's ability to more precisely target messages.

We've all seen how much success the over-the-counter drugs have enjoyed, especially the allergy medications that are among the most steady buyers of rich media campaigns. But, how about the big money prescription drugs?

With Levitra being launched now to take on Viagra, much has been written about the billion-dollar drug's inability to reach 85% of its target market. This is how ubiquitous Viagra is - when I wrote "rising" and "pharmaceutical" in the first line of the paragraph above, most of you probably knew exactly where I was heading. This is obviously the result of great branding, right? Well, while that might make the folks at Pfizer and their agency feel fantastic, should we applaud if there is so much of the target market not buying?

This is among the campaigns that I would love to see examined for XMOS. After all, I think we can all agree that interactive, for all its missteps over the past years, can produce direct response better than any other media especially when the precision of the targeting is rewarded. I think we can bank on an increased ratio of ad spending for Levitra and other new pharmaceutical products to be committed online. Every interactive ad professional I know is banking on it, in fact. If XMOS finds a natural 15% ratio for CPGs and the like, where will the best ratio reside for targeted pharmaceuticals? It's got to be at least 25%.

Or, do you disagree?

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