Advertising Effectiveness Will Never Change With Analysis Like This

In a recent article, Advertising Will Change Forever, Forrester Research analyst Josh Bernoff explains that while digital spending will nearly double in 5 years ad budgets won’t. The reason for this, Bernoff explains, is that “In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent.” While this will make bloggers, digital analysts and social media strategists feel pretty good about themselves and their job security further analysis is required.

Asking marketers about the effectiveness of individual channels is part of the problem. Channels are not executed in a vacuum. We now understand from rigorous attribution research conducted by Microsoft Atlas and others what we have always assumed to be true, that the effectiveness of individual channels is significantly affected not only by other online channels but across offline channels as well. As long as research companies like Forrester and marketers take the easy way out and evaluate the effectiveness of channels in a silo, progress towards really measuring the effectiveness of marketing will never be made.

Bernoff goes on to fuel the fire by proclaiming the oncoming death of traditional channels, “If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.” Contrary to this statement, Forrester’s own data shows that while time spent online has been growing rapidly, time spent watching TV is actually up YOY and still captures the majority of consumers time.

My recommendation is to ignore predictions of the death of traditional channels and ignore research that evaluates the effectiveness of channels in a silo. With the proliferation of new channels, consumers continued use of traditional channels and increasing cross-channel behavior, if you’re in advertising, you’d better learn to speak and measure integrated, because that’s the way the world is really going.

The cost of chasing the biggest, richest and shiniest new toys

A recent article by Laurie Sullivan, Video In Rich Media Ads More Likely To Lead Customers To Purchase, sites a DoubleClick benchmark study that suggests rich media ad formats that contain video “overwhelmingly” outperform other types of creative media ad, such as images and simple animation Flash. Not surprisingly, the pioneers in every medium get the attention and benefit of impressed consumers and often times mainstream news coverage of their advanced techniques. However, as more marketers plow money into video ad formats, consumers will quickly become de-sensitized to them, performance will level out and marketers will be left chasing the next latest trend.

This is not to say that marketers should not be experimenting. Experimentation is vital, especially with the rapid growth and adoption of new technologies, and all marketers should have a portion of their budget designated to test and trial these new techniques, formats and technologies. And it should go without saying that this should all be evaluated in the context of your brand positioning. If you claim to be hip, innovative and technically savvy this ups the ante for your marketing experimentation requirements.

However, I think there is a greater danger than missing out on the latest format or technology promising .147% higher CTRs. That is the switching cost of moving on to a new technique before you have integrated and optimized existing techniques in the media-mix. And ad format is only one piece of the equation for online advertisers who should also be evaluating how creative, placement, targeting and timing are affecting their ROMO. In addition, marketers should be tracking post-click behavior or changing brand attitudes to understand the longer term and cross-channel affects of their campaigns.

I would argue that becoming more efficient in existing techniques through experimentation and experience will drive better results to the bottom line than chasing the newest, biggest and richest ad formats around.

Leverage digital and social media for their strengths, not everything

In a recent article by Andrew McMains and Brian Morrissey, Online Brands Turn to Traditional Ads, they discuss how even pure plays like Kayak, Zappos and Amazon look to TV to build their businesses. In the article, Hulu.com’s success is credited at least in part due to their “old-school” 60-second Super Bowl TV spot which resulted in brand awareness and Web traffic spikes, including a 104 percent increase in monthly unique visitors to over 9 million. The lesson for marketers is to consider all channels as part of the media mix and acknowledge that certain channels have inherent strengths and weakness.

Additionally, attribution studies by Microsoft Atlas and Coremetric have proven what marketers intuitively knew, customers are influenced by a variety of messages and channels throughout their purchase process and these integrated messages have a cumulative effect. Where these studies and solutions fall short is by focusing solely on online channels, ignoring the majority of consumer’s media consumption. Zappos CEO Tony Hsieh said the cross-channel effects are clear, “What we’ve found is that if we layer in a little bit of offline brand advertising, it improves the ROI of our online direct response campaigns.”

Marketers should start with a clear understanding of their target market’s media consumption and how they use different channels throughout their decision and purchase processes. While each marketing tactic can be used for a variety of objectives, for example using search to increase brand awareness or social media to drive direct response sales, marketers will be better served leveraging channels for their specific strengths inherent to the medium and as defined by their target market’s consumption of that medium.