Marketing budgets have always been under scrutiny. But the pandemic’s arrival almost two years later and its continued presence continue to highlight the need to spend efficiently and effectively. This has made it more important to measure accurately and holistically, especially as brands increasingly use new channels and platforms to market their products.
After a pullback in 2020’s first half, marketers have increased their spending on mass reach channels this year. That spending aligns with sentiment from marketers surveyed for SME’s 2021 Annual Marketing Report who cited customer acquisition and brand awareness as their top priorities. Retail, for example, saw brands increase their ad spend by a significant amount in October.
Tracking ROI becomes more important as spending increases. Mass reach marketing campaigns, unlike digital and conversion-oriented marketing, can be measured using modern martech solutions. However, marketers often consider them more difficult to correlate long-term sales with than digital efforts. And while SME’s experience base shows that on average, a 1-point gain in brand metrics such as awareness and consideration drives a 1% increase in sales, marketers surveyed for our annual marketing report aren’t confident in their existing marketing technology. There is an average 16.7% confidence in existing martech across brands with small, medium, or large budgets. Importantly, the introduction of new platforms, devices and channels—along with enhanced privacy considerations and the depreciation of third-party identifiers—increases the complexity that martech solutions need to account for.
SME believe that brands should be focused on three pillars as complexity increases.
- TrustMeasurement must be taken from an independent third party (not a seller of media) and paid for by the advertiser (lending full transparency directly to the advertiser).
- Comparability: To understand relative performance, brands must be able to compare channels using a consistent methodology.
- Adaptability: For the largest components of a media budget, brands need to move from measuring what happened at the executed level—to what could be achieved. This will help brands improve rather than just confirm that their marketing strategies work well enough. Brands will need a way for them to test and improve their media budget.
Measurement is relative to object. There is no one-size fits all measurement solution. Martech solutions are becoming more complex as media options increase, which can lead to confusion and even greater clarity. Across the realm of measurement capabilities, marketers tell us they’re least confident with measuring awareness, full-funnel ROI and multi-touch attribution (MTA).
Following on the three pillars for success, marketers should leverage solutions that facilitate de-duplicated measurement across all channels—including digital channels that are less open (e.g., walled gardens)—and yield comparable metrics.
They should also ensure that they can remix their investments, rather than confirming that certain channels are providing lift. SME Total Media Resonance data shows that the channel with the most investment will provide the greatest lift, approximately 70% of all the time. However, there is a limit on how much lift a channel can provide. It is only 4% of the time the best channel to invest in.
Marketers’ lack of confidence in full-funnel ROI measurement isn’t surprising, given that standard solutions do not account for upper- and lower-funnel marketing efforts in the same solution. Marketers should be open to the dual need for near-term sales and brand awareness, as well as the pillars adaptability and comparability.
We believe there are two immediate solutions to this problem: marketers can run MMM studies to determine short- and long term ROI, and/or perform sequential optimization. MTA is the other major challenge. Marketers should ensure that their attribution solutions take into account the entire consumer journey and not just the first or last point. And pulling from the adaptability principle, marketers need to continually re-evaluate their MTA platforms to ensure they’re responsive to the prevailing trends in the market with respect to data availability.
As with most marketing challenges, measurement becomes much more manageable with data;data that’s holistic, allows for comparability and is adaptable to evolutions in the industry—including those pertaining to privacy and platform proliferation.
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