Tis the season for media and marketing buying decisions to be made: Yearend cutbacks. Next year's budgets are emerging.
The abundance of choices contributes to the uncertainty. Should we concentrate on what has worked in the past or diversify into new innovations? Ironically, despite the promise of digital media to answer Wannamaker's challenge ("I know half of my advertising works, I just don't know which half"), today, few businesses believe even half of their advertising works.
Big Data and digital advertsing promised to bring more certainty about the returns on marketing investments. But the returns aren't so great.
As the Telegraph story further observed, “…judging by correspondence from Telegraph readers and disillusioned shoppers, one of the reasons that consumers are turning to [discounters] Aldi and Lidl is that they feel they are simple and free of gimmicks. Shoppers are questioning whether loyalty cards, such as Clubcard, are more helpful to the supermarket than they are to the shopper.”
WARC reports: "Speaking at the Ad Age Data Conference in New York last week, Julie Fleischer said as much as 85% of (digital) ad impressions are rejected by (Kraft).. . 'That's 75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown,' she said."
The decline in advertsing confidence isn't a recent, digital media phenomenon. The 1980's saw the beginning of the shift of advertising into trade promotion. According Jack Meyers, advertising media advisor, the majority of today's budgets are "below the line":
The majority 65% to 90% of their budgets, known as below-the-line, are targeted to generating sales and direct return-on-investment through consumer and trade sales promotion and direct marketing.The majority 65% to 90% of their budgets, known as below-the-line, are targeted to generating sales and direct return-on-investment through consumer and trade sales promotion and direct marketing. - See more at: https://www.jackmyers.com/media-business-report/Advertising-vs-Below-the-Line-Shopper-Marketing-The-Economics-.html#sthash.6JcLfpbl.dpuf
In this remarkably simple historic media infographic video by the ECONOMIST, via @johannes_ernst we learn that despite growing lack of confidence in advertising, spending increased to as high as $200 Billion. The reason is increased redundancy. As media choices proliferated, the audience fragmented. So it took more and more media in the mix to reach fewer eyeballs.
Since the 2008 collapse, digital advertising has been growing at a faster pace than all other media, with newspapers trailing the most.
If businesses like Kraft and Tesco are not seeing a return on these digital media investments, where will these dollars go next?
Jack Meyers predicts that digital media will benefit from marketers investing in digital shopper marketing solutions, presumably mobile couponing and interactive digital video signage. Additionally, he predicts that automated buying will contribute to an increased share of digital media spending, presumably because automated buying promotes more certainty. As we've witnessed above, better accountability may deliver more certainty about results, but those results aren't necessarily better.
The implications for the average business are not clear. Even if you look for direction based on where the market is going, the only certainty is that we don't know what's next.
One way to improve results is to make decisions expressly based on your business. One way to compete is to strategize differently.
Here are some questions that may lead you to making different, more proactive choices:
What is your business situation? Are you a new category or an established category? Are you the premium choice or the best price?
What is your objective? To retain existing customers? To find customers? To convert prospects?
What is the challenge? Awareness? Competition?
What do you want to learn to improve? The content of your message? The media you choose? The time spent managing both?