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Treat "digital" with the respect it deserves

by Nigel Hollis | February 26, 2014

Sue Elms and I were chatting the other day about how brands can get the best return from their digital investments. The discussion was prompted by the announcement by Jon Moeller, P&G’s CFO, that digital would comprise 30% of the company’s global media spending in 2014. He justified the shift on the grounds that digital offered a higher potential return due to more effective targeting. 

Sue and I agreed that this is a great statement of intent. Advertisers have to be where their consumers are, and these days many people are online, either through a computer or increasingly a mobile device. I for one, however, doubted whether the investment would provide the expected return without significantly more time and thought than typically appears to be devoted to digital marketing. 

Digital tablet in park

The use of the word “digital” hides the inherent complexity of this type of advertising. Moeller himself distinguishes between digital, social and mobile spaces, but even these distinctions hide the fact that each one of these domains can carry very different types of advertising. As I have noted elsewhere, within the digital domain advertising formats broadly parallel their offline equivalent . 

While digital might have the capability to reach a maximum of 80% of a potential audience if you stitch together display, online video and Facebook; each one of these is a very different advertising ecosystem and brings with it a very different audience mindset. Individually their reach is lower, and the differing ecosystems impose different demands on the planning and placement of campaigns. The fact that audience mindsets differ means that creative executions need to engage people in very different ways (again, just like their offline equivalents). 

Sue and I ultimately concluded that in order to be truly effective, digital marketing demands just as much understanding, time and resource as traditional channels. Right now, no matter how effective the targeting might be, the wastage on digital can be huge. Witness the finding that about half of all online ads are not even seen, or that 1 in 5 ads measured by AdIndex appears generates a negative response in terms of brand consideration, and that research indicates that consumers are avoiding some forms of placement forcing sites to adopt even more intrusive ad formats.  

With companies like P&G spending 30% of their media budget on digital, they need to start holding it accountable to the same planning disciplines as other media, e.g. effective measurement, auditing and creative development. If nothing else, there needs to be an acknowledgement that digital is really several different types of media channel, each with its own needs and benefits. Digital needs to take account of the differing audience mindset if it is to yield its true potential.

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  1. koen pauwels, June 23, 2014

    Thanks, Nigel, I fully agree that digital media differ from eachother and should be held accountable, especially now eg P&G and Unilever are spending around 30% of their full budget on digital. While they justify this increase with the higher ROI (found in my research), my questions are: 

    (1) how scalable is success is in specific digital media?

    (2) when and where do specific digital media hit diminishing returns?

    (3) how do you link media-specific metrics to company results?

    (4) how do you integrate digital with offline media in your dashboard and resource allocation decisions?

    Would love to get your take on this...for mine, please see www.notsizedata.com

    Cheers  

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