Digital downfall drives new thinking around ROI marketing metrics
Michaela Chan addresses the changing ROI marketing metrics driven by the digital evolution and multiple campaign platforms.
The revelation that Facebook claimed to reach audiences greater than the actual population not only shook the foundations of digital, but has seen a fundamental shift in the way marketers approach their media spend.
This shift will only be further escalated after – amidst the fluster of their third quarter earnings announcement – Facebook admitted the number of fake and duplicative accounts are greater than previously estimated. As reported by Business Insider, 10% of Facebook’s 2.07 billion monthly users are now estimated to be duplicate accounts, up from 6% estimated
The reported numbers also shows fake accounts, or accounts not associated with a real account, increased from 1% to 2-3%.
Previously, digital channels were deemed relatively easy to measure (compared to more traditional channels) but with this tangible scepticism of digital channels, marketers are
struggling to determine what metrics are more valuable than others.
In addition, marketers are increasingly confronted with the challenge of being held to account by the CFO and board to report on return on marketing investment (ROMI) –
commonly known as ROI.
At the recent Interactive Advertising Bureau (IAB) MeasureUp Conference – the first conference of its kind to discuss measurement and marketing ROI – it became clear there is
still much more work to be done by all media players before any consensus can be reached to bring measurement into alignment.
The entire panel, which included our very own CEO, Brendon Cook, recognised that while cross-media measurement was something that would be nice to have, it was not on top of
the agenda as each sector had its own work to do in getting its industry measurement better aligned.
The challenge of proving ROI
With no consistent reporting across formats, and question marks over how some metrics are arrived at, marketers have to probe more when presented with performance measures that show reach, frequency, attribution (particularly if presented with the questionable first-click and last-click attribution models) and the ROI claims.
At oOh!media, as I am sure is the case with all other media channels, we are increasingly being asked by advertisers and agencies what ROI can they expect from our out-of- home
offering. We are also seeing clients, rightly, expecting more rigour around the data they are presented. We are faced with the challenge of not only ensuring the data presented is bullet proof but how we can then report comparably across all formats and environments.
Unfortunately this is not easy as methodologies used for determining ROI are inconsistent. Some of the studies currently out in the market focus on three or four brands and are
specific to a particular media.
One report, however, is the exception to this. It is a warts-and- all report that is media agnostic with no censoring – it is there in its entirety.
A transparent view of ROI
This independent market mix modelling study, undertaken by Analytic Partners helps advertisers better plan their media spend by providing data on the ROI of each media. This
unique econometrics modelling report is based on 14 years of data from more than 250 econometric studies created for more than 135 brands with a combined advertising spend in
excess of $7 billion.
While it does not give an actual dollar figure, it ranks ROI performance of all media types, including specific individual out of home (OOH) formats, on a yield curve, with TV being the baseline. What it tells us, and a message other mediums may not want to highlight in the increasingly competitive media landscape, is that there are enormous synergies to be enjoyed when using a mix of media and content.
Realising cross-media synergies
For example, by combining TV, digital and OOH advertising, you not only enjoy the ROI returns on the investment from each of the formats, but also an additional incremental ROI growth. The synergy of this mix is the strongest we see across all media channels. Another interesting finding of the report is the performance of different OOH formats, with retail in particular performing strongly – delivering an ROI of almost double that delivered by TV.
This result comes down to its proximity to the point of retail purchase. It is where synergies really come in to play and the role the retail format plays particularly in walk by and stand by environments. While other broadcast mediums, including out of home formats, have helped create brand awareness, the addition of retail helps create brand recall – delivering real conversion and more importantly, tangible ROI.
What this tells us as marketers is that when we are buying media, the media channels cannot be viewed in isolation or as line items. The customer journey, and the symbiotic value
of this across media channels and audiences, is what enables effective advertising and ultimately a return on marketing investment.
Michaela Chan is CMO at oOh!media.
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