Advertising Works -- And How!

This post was previously published in an earlier edition of Metrics Insider, and has been slightly updated:

Sometimes I worry that we digital cognoscenti can get so lost in the magic and elegance of all these awesome algorithms and Big Data assets, that we forget to take a step back and ponder the bigger picture: the actual people out there on the other side of all those myriad screens.

Ultimately, we are still in the advertising business, where success derives from putting messages in front of people that influence and compel them to buy stuff. As savvy as we get about the math and the zeroes and ones, it is important we don’t lose sight of the human, holistic side of the equation.

That’s why it was refreshing to hear about the findings from the Advertising Research Foundation’s Ground Truth, “How Advertising Works” initiative at its annual Re!Think (formerly Re:Think) conference earlier this year. As part of this initiative, the ARF posed five key questions about how to best spend advertising dollars. Naturally, the place of digital in the media mix was a prominent theme throughout.

One key finding was that layering on incremental platforms to a campaign introduces increased ROI: an important metric, since typically platform diversity comes at a cost. This means that the incremental cost pays off. In this context, “platforms” include TV, print, radio, digital display, paid search, digital video, PR, out-of-home and cinema.

Historically, given the large place TV advertising has in the marketing mix for big brands, proponents of other media have told stories about the synergistic effect of adding a particular medium to a TV campaign. In the “How Advertising Works” findings, across categories, the addition of digital to a TV campaign introduces a lift in ROI three times as great as the addition of either radio or print.

Of course this lift varies by category. Categories where consumers tend to research or shop online (e.g., travel, pharma) tend to show the greatest increases. Indeed, the “How Advertising Works” research found that in these two categories, adding paid search to a TV campaign more than doubles campaign ROI.

I’ll offer an opinion here. The TV commercial may well be the most compelling marketing messaging tool known to man. And over the last few years, much of the dialogue about digital advertising has focused on its shortcomings (screen size as consumers engage with content via mobile devices; viewability and fraud issues).

But it’s important to remember that the fundamental nature of digital remains the fact of interactivity. You don’t just watch in digital platforms — you DO. You can research products through digital media; you can pre-shop; you can even shop and transact — and if the goods you buy are digital in nature, like, say, a ticket, you can take delivery. With all the recent emphasis in the digital space on targeting brand dollars, we may be overlooking one of our fundamental selling points:  that core essence of interactivity. If TV drives consumers into the funnel, digital accompanies them the rest of the way along the path to purchase.

Given the power of the TV commercial, and the interactivity of digital, one might be inclined to conclude that putting a TV commercial in front of a consumer or prospect through a digital platform would be especially effective. Indeed, this proved to be the case.

It turns out that the ROI of a digital video ad was found to be almost twice as great as that of a static banner — a digital video ad being, of course, a TV commercial. This is good news for TV networks, who are following their viewers online, making first-run, premium content available via a plethora of (ad-supported) digital options. I

n fact —and given issues of screen size, this may come as a surprising finding — within the universe of digital video advertising, mobile video ROI is twice that of desktop video advertising. As the lines continue to blur between traditional linear TV and digital video, the continued efficacy of the TV spot across screens and delivery systems is an extremely encouraging piece of news for both marketers and media operators.

I would encourage you all to familiarize yourselves with the “How Advertising Works” findings (and if you’re not doing so already, to engage with the ARF.) There are other interesting findings there, including findings with respect to targeting Millennials, about the role of creative, and about pitfalls of frequency.

Remember, we do our best job of deploying all our clever data and algorithms for delivering messages to cookies and devices, when we do so with a solid underpinning of how the delivery of these messages fits into the bigger picture.

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