Commentary

Brands Now Get The Right ROI From Digital

There has been a lot of discussion about the value that brands have been getting from their internet advertising. Some argue they are spending too much. Internet advertising is now working as hard as advertising in other media — even harder.

Over the last few years, advertisers have consistently spent more of their budgets on internet advertising than is warranted by the consumers’ time spent with the internet.

In 2012, consumers devoted 18% of their time spent with media to using the internet, but advertisers spent 20% of their budgets on internet advertising. The gap has widened over time. Last year, the internet accounted for 28% of media consumption time, but 34% of global advertising expenditure.

However, time-spent is a crude measure of the influence of different media on consumer behavior. A short message can have a profound effect on someone’s beliefs. To produce a more useful assessment of the effectiveness of internet advertising, we used proprietary tool to compare internet ad spend to internet ‘brand experience,’ a measure of how media shape consumer attitudes and behavior.

Brand experience is a metric produced by Publicis Media’s Touchpoints ROI Tracker and combines two factors: reach (how likely consumers are to encounter brand messages at each touchpoint) and influence (how likely each message is to change how a consumer thinks or acts towards a brand).

Brand experience produces real-world business outcomes: There is an 86% correlation between brand experience and market share across all projects we’ve conducted.

Until 2015, brands struggled to make effective use of internet advertising, and their spend was not matched by the resulting brand experience. In 2013, advertisers spent 23% of their budgets on internet advertising, which produced only 22% of brand experience. Things got worse in 2014, when advertisers hiked their internet budgets up to 26% of total spend, but internet brand experience fell back to 21%.

By 2015, though, brands were using internet advertising more effectively. That year, it accounted for 30% of both budgets and paid brand experience. And in 2016, internet advertising accounted for 34% of global ad budgets but produced 35% of brand experience.

So the debate is behind the reality.

Brands were spending too much on internet advertising three or four years ago, but the ROI of internet ads has since caught up, and now internet advertising is now just as effective as advertising in other media. It’s no longer a question of whether advertisers can use the internet to communicate brand messages at scale — it’s clear that they can.

The internet has taken its place alongside the "traditional" media as a normal vehicle for brand communication. What brands need to do now is rigorously assess the effectiveness of all media they use to communicate with consumers and ensure that each is working as hard as possible to move consumers along the customer journey.


Next story loading loading..