Commentary

Reach Audience First; Then Measure Results; Then Allocate $

by Jack Loechner , Staff Writer, September 18, 2017

According to a new study from Kantar Millward Brown, Getting Media Right, published on Marketing Charts, more than three-quarters of survey respondents said that they look at the channels that best reach their target audience when determining media budget allocations. While more than two-thirds of respondents said that they factor in channels that have been successful for them in the past, 41% said they’re influenced by new marketing channels and industry innovations.

Cost and ROI figure prominently in media mix decisions: 63% are influenced by channels that can be easily measured or demonstrate ROI, while 62% factor in channel costs.

Factors Influencing Media Budget Allocations
Channels	% of Respondents
Channels that best reach target audience	76%
Channels that have been successful in the past	69
Channels that can be easily measured or demonstrate ROI	63
Channel costs	62
New market channels/industry innovations	41
Channels that management trusts	36
Published on MarketingCharts.com, with Data Source: Kantar Millward Brown, September 2017

It’s understandable, says the report, that marketers would gravitate towards channels that are more measurable, as several pieces of research demonstrate that marketers are struggling to prove ROI and optimize their media mix. While three-quarters of agencies express confidence in their media mix, fewer than half (43%) of their advertiser counterparts do the same.

If there’ll be a beneficiary of the ROI factor, says the report, it seems it will be digital rather than traditional media. 60% of the advertisers, agencies and media companies responding to the survey said that they had a high ability to track ROI for digital channels, with half saying the same about mobile ads and apps.

Only about one-third of respondents reported using ROI or sales metrics to measure the performance of TV and other traditional media channels, likely due to these channels being used more for brand awareness, says the report. In fact, past research has found that large advertisers tend to be slightly more likely to measure the outcome of their TV ad campaigns on the basis of increased brand awareness than increased sales.

About 4 in 10 advertisers and agencies say they trust data from publishers and media partners. There’s a wider discrepancy when it comes to tech companies, DMPs and DSPs, which are trusted by more agencies (53%) than advertisers (37%). And, there’s a much higher degree of confidence in in-house data generated by research of data science teams (>75%), as well as third-party research from vendors or partners (>70%).

Concluding, the report says that given that companies are targeting different audiences, each will have a different ideal mix. But in the aggregate, respondents feel that a best-in-class mix would be allocated as follows:

Cross-channel (digital & traditional): 21%
TV: 20%
Cross-device (online & mobile): 19%;
Online advertising (desktop/mobile): 16%
Mobile advertising & apps (13%)
Other traditional media (11%).

The report, Getting Media Right, is based on a survey of more than 330 leaders, representing advertisers, agencies and media companies around the world. For a free download of the report, please visit MillwardBrown here: https://www.millwardbrowndigital.com/press/for-the-third-cons ecutive-year-measuring-and-proving-roi-tops-the-list-of-marketers-biggest-challenges/,

budgets, media, research

5 comments about "Reach Audience First; Then Measure Results; Then Allocate $".

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Ed Papazian from Media Dynamics, September 18, 2017 at 8:23 a.m.
Jack, the way advertisers approach each medium varies tremendously and lumping them all together without drawing the necessary distinctions ---as seems to be the case with this study-----usually produces very misleading findings. For, example, many TV advertisers buy time on networks and channels that index below par---sometimes well below par----in terms of targeting younger and/or upscale viewers on a per-telecast basis because these networks offer big show merchandising values as well as the best reach and, especially, the lowest target group CPMs. The "best-in-class mix" described at the end of your report is the result of blending everything together and looks like what a group of college students would come up with as their ideal media mix---a little bit of everything. That's not the way the real world works when it comes to media mix decisions.
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James Smith from J. R. Smith Group, September 18, 2017 at 9:54 a.m.

Wasn't it about a year ago that an ARF study found, after checking about 5k campaigns the optimized campaign was about 78% traditional/22% digital?

Ed Papazian from Media Dynamics, September 18, 2017 at 10:01 a.m.

I believe that the ARF's study did make a very strong case for the lion's share of spending being in "traditional media", James. Even so, there is no way---in my opinion---that one can determine the "ideal" media mix and expect it to apply to all marketing situations---it just can't be done.

Peter Rosenwald from Consult Partners, September 18, 2017 at 7:13 p.m.

Perhaps I'm missing something but shouldn't all marketers reach their audience first, define it and then measure the results that produce the optimum return on marketing investment (ROMI) and only then commit serious money to it?

Brand marketers whose dependency is on TV don't seem to have much of anything but questionable brand awareness numbers on which to decide strategy. That may be because doing the heavy lifting to develop these metrics is a lot more work and a lot less fun than making beautiful commercials. And having real numbers just might diminish their remuneration.

Ed Papazian from Media Dynamics Inc, September 18, 2017 at 7:30 p.m.

Peter, most national TV branding advertisers have a great deal of information to guide them. Many conduct commercial impact studies, mainly before airing them---to decide whether to use them in the first place--- but also afterwards, once they are seen on TV by large numbers of people.. These measure not only whether people who see TV shows carrying the ads can recall their main selling points as well as the brand, but also the extent to which the exposures changed their mind about which brand to buy on their next purchase occasion. In addition, smart advertisers conduct surveys of their prime targets while the campaigns are in progress to determine how well they are getting their message across, their effective ad memorability reach and whether there are signs of commercial wearout or other indicators that may require action. Last, but not least, the same savvy marketers track sales ---not person by person---but in total and by regions and relate these results to the amount of reach or GRP weight that is being used. Most see correlations between all of these metrics and this provides a very good---though not a perfect----way to monitor what is happening with a particular branding campaign. In short, they are not, as a rule, flying by the seat of their pants.