79% marketers to up investment in marketing analytics in next 1 year: Nielsen report
Brand advertisers are increasingly organising themselves in a more channel-agnostic way with customers at the centre of their strategy. Four years ago that was not the case for over 70 per cent of companies. Now, nearly as many marketers (62 per cent) reported being organised in a way that supports an omnichannel approach with unified reporting structures and revenue goals. This is what is needed for advertisers to be able to respond to changes in consumer media consumption and buying behaviour. It’s about meeting customer expectations by consistently delivering more relevant experiences.
According to The Nielsen CMO Report, digital media spend has eclipsed traditional channels, but not by as much as the positive reviews would suggest. Current digital media spend is comparable to traditional media despite receiving more favourable reviews by respondents. Increases in digital media budgets, however, are poised to jump considerably over the next 12 months.
In terms of measurement, only one in four marketers reported high levels of confidence in their ability to measure the ROI of their media spend, regardless of type, or their trade spend. Not surprisingly, 79 per cent expect to increase their investment in marketing analytics and attribution in the next 12 months.
Perceived Importance of Digital Media
Respondents made it very clear how important digital media has become to their overall marketing efforts. They showed relatively high levels of confidence in their ability to measure the ROI of their digital campaigns and believe it, generally, to be an effective media category.
Digital media as a category is composed of a variety of distinct media types, including search, social media, online video, OTT (over-the-top) TV/ connected TV (CTV), mobile video, email, and online display advertising.
Search and social media were considered extremely important by most marketers. In fact, 79 per cent of respondents ranked search as “very” or “extremely” important, while 73 per cent thought the same about social media. A large majority also considered online video (64 per cent) and email (59 per cent) to be very or extremely important channels. The lowest ranked digital channel was OTT-TV/CTV. This may change as this relatively new channel matures, but fewer than 8 per cent of respondents considered it extremely important (and 18 per cent very important) at this point. In fact, nearly 25 per cent of respondents ranked it as “not so” important or “not at all” important to their current media strategy. Compare this to linear television, which a full 30 per cent of respondents ranked extremely important and 51 per cent very important, and it becomes clear that the OTT/CTV category, while rapidly growing, has a long way to go to win over marketers.
Perceived Effectiveness of Digital Media
Digital media was generally considered to be a very effective media category. To understand advertising performance within the category, they asked marketers to rank the effectiveness of individual channels including mobile, search, social media, OTT TV/CTV and programmatic (to capture both mobile and online display advertising).
Search (68 per cent), social media (68 per cent) and mobile (59 per cent) were ranked as “very” or “extremely” effective by large majorities of respondents. Only 28 per cent of marketers ranked OTT TV/CTV as a “very” or “extremely” effective channel, the lowest of the categories analysed. This is in line with how respondents ranked the perceived importance of the channel. It’s important to note that over 30 per cent of respondents have yet to dedicate media budget to OTT TV/CTV. This number should decrease as the channel becomes better established.
While respondents gave high ranks for digital media’s effectiveness, many made it clear that it’s still early days and the proof of effectiveness remains unclear.
Much of the concern around digital media’s value is what is referred to as “hygiene”. Digital media hygiene refers to the primary causes of campaign waste including non-viewable impressions, invalid or fraudulent traffic and brand safety (for example, advertising associated with potentially harmful or fraudulent content).
According to the Nielsen Digital Ad Ratings Benchmarks Report, only 59 per cent of all the online and mobile campaigns measured by Nielsen from Q1 2014 through Q2 2017 were delivered to their intended target demographic category. So, 41 per cent of campaign impressions missed the mark and were delivered to a different audience than the advertiser intended. Brand advertisers and their agencies need to be able to measure effective reach for each of their campaigns and optimise on-target delivery over time. This is one way to help alleviate concerns about digital media hygiene.
Current digital media spending
When asked how much of their current advertising budget is spent on digital media, a small majority (51 per cent) of the respondents reported spending less than 40 per cent of their budget on digital media.
The respondents reported digital media as representing 37.6 per cent of total advertising spend. This is remarkably similar to the percentage of advertising budget dedicated to traditional media (when calculated the same way), which was only a percentage point off at 36.6 per cent. So, while digital media is ranked highly across perceived importance and effectiveness measures, current spending was reported as being around the same as traditional media.
Future digital media spending
When forecasting the next 12 months, respondents painted a much different picture. Eighty-two per cent of respondents agreed that digital media spend is going to increase, with only 4 per cent forecasting a decrease. So in total, there is nearly complete (95 per cent) agreement among marketers that digital media spend is either remaining stable or growing in the near future.
Respondents expect, on average, a 49 per cent increase in digital media budgets in the next 12 months. And some respondents reported even higher increases.