Can We Expect A Bit More From Advertising –the Five Layoffs

By Author: D'Art Design
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Digital advertising spending is on a continuous rise, but brands should also keep their traditional marketing models and capabilities to make the investment effective. Though we are witnessing a great surge in digital spending, the infrastructure behind that has a vital role (like agile IT infrastructure, automated processes, etc.) is painfully in arrears. And the top 20 to 50 digital spenders in the world are bearing and shouldering this pain.

Reasons for under performance –

· Highly fragmented digital spending –

Many brands and businesses back their digital strategies through an independent digital marketing budget. And that is leading to varied results and economics of limited scale. Such fragmentation makes it difficult to portion out cross-channel effects every so often. Plus, the lack of synchronization between O2O marketing groups (both internal and external) has limited insights into programs that are driving meaningful customer attributions (decisive actions).

· Averaged performance measures –

Probing the elements of performance, like keywords to display ...
... advertising placements, are on average and provide only a big-picture view. It is preventing the true consideration of which mobile advertising juggernauts are doing well or not.

· Uncoordinated external stakeholders –

External agencies are usually employed to improve different aspects of digital marketing; for instance, an agency that manages the budget for paid search might differ from the agency providing advice on organic search engine optimization (SEO). This can mean that important decision-makers are more involved in coordinating their efforts and organizing competing budget requests, which can prevent the ability to have a united perspective on what to do with the company's marketing budget.

Then how can we unlock digital value? The five layoffs come intact as strategies to make the foul play out.

· Average killers –

A typical business's digital buying could include as many as 20,000 words and 10,000 display ads based on the size, type, and position, and their information about performance. In this data-rich setting, deep analysis at a granular level can provide much greater value when determining excellent and bad performance rather than relying on misleading statistics. One major retailer was, for instance, convinced that it was earning good returns from its spending on keywords. But a thorough analysis revealed that over 50 percent of the keywords didn't provide a positive return on the investment (ROI). If the company looked at the overall performance of its keywords, it discovered that the top keywords were hiding the worst performers, creating an illusion of a high ROI across the board. In the end, the company ended its funding to cover the bulk of low-performing keywords and only kept crucial ones to support strategic reasons (such as those related to high-end products).

· The bottom line impact –

Digital marketing teams tend to concentrate too much on the amount of purchase and the cost per purchase (CPO) and overlook the real impact on the bottom line of digital advertising. Calculating metrics such as gross margins or lifetime value of advertisements through digital boards or on whole allows marketers to comprehend the impact of digital. For instance, one business-to-business firm chose lead generation as the primary measure to assess the efficacy of its digital ads. But, an analysis of closing rates and orders showed a fivefold variance between the most effective and least effective leads. Based on this data, the company decided to shift its investment to the highest-performing automobiles. It was then able to generate 15 percent more in revenue without spending more on marketing.

· Calculate digital's total impact –

In the past, businesses have shied from assessing the impact of digital media on offline sales due to the lack of the right method to do this. But, a variety of approaches -- from heuristics to data from surveys about the journey of the consumer to econometric modeling -- can allow companies to have a more precise understanding of how online channels influence analog channels (and reverse). A major retailer has used a heuristic method (a systematic analysis based on logic and judgment) to understand the impact of digital advertisements on purchases in non-digital channels and vice versa. After a market-mix model analysis identified the total amount of orders via digital media, the team conducted a second analysis to assess the offline purchase propensity influenced by online behavior. Through studying triggers for websites and web-related behavior and connecting it to buying behaviors (both offline and online), They discovered that ads on the internet drove around 0.4 orders through various other ways for each purchase they generated online. This significantly increased the ROI of digital ads and allowed marketers to develop a compelling business case to increase investment into this particular channel.

· Create unvarying digital-marketing tracking systems –

Many companies do not have a system that can compare and monitor costs per click and per thousand impressions for display positions and keywords. Executives have to depend on individual agencies to assess whether prices are competitive. Digital procurement that is top-of-the-line requires staying up-to-date with the most recent innovations in the marketplace (for instance, real-time bidding) while also ensuring a unifying cost model each agency employs to allow companies to assess the quality of products and make more informed choices.

· The shifting focus from paid media to owned and earned media –

In the race to increase return on investment from paid media, companies tend to overlook the huge benefit that can be realized by maximizing the value of privately-owned media (such as a company's website) as well as earned media (such as bloggers writing on your products). If managed correctly, this category can decrease the need for paid media, resulting in a better ROI. A global financial institution found that the company was spending 10% more on paid searches than its competitors. The reason for this was an ineffective SEO strategy. As a result, the digital department reallocated some of the paid-search budgets to increase SEO and conducted an extensive technical audit of the site, resulting in higher value for the business. One high-tech firm shifted expenditure from poorly performing display and paid search advertising and put money into its website. By analyzing the different paths customers took for all uncomplete checkouts on its site, it devised a customized strategy to retarget each kind of buyer, resulting in a double increase in return on investment.

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