Digital Transformation Conversations

Digital Transformation Conversations

Taking The Plunge: Why Marketers Need to Swim in the Digital Media Seas

It's perhaps surprising that marketers – who are often portrayed as 'ideas' people – can be as cautious as the next person. Many marketers continue to approach digital channels with a certain caution. During 2011, a majority of marketing campaigns by Havas Media were inclined towards traditional media, with only 10% of the budget being allocated to digital channels. Why the caution?  The main reason is measurement:  marketers are nervous about the perceived lack of metrics to determine ROI. A survey by the Association of National Advertisers in the US indicated that over 62% of marketers feel that the inability to prove ROI is a top concern[i].

But it doesn't have to be this way!  Our research with Havas Media actually shows different results. When Havas Media[1] launched a Web and TV marketing campaign, the Web-based campaign generated an ROI of 170 compared to 100 for TV. While the TV campaign accounted for 85% of the budget, the Web campaign required less than 15%[ii]. It turns out that switching to digital media investment can give a good 'bang for the buck'.

And ROI isn't the only reason to take the plunge.  Digital strengthens your brand. Consider this: by investing just 20% of budget on online videos, brand coverage increases by an average of five percentage points[iii]. Including digital in your marketing plan also engages customers who are used to communicating through traditional channels. Contextual targeting through digital enables your brand to reach target customers by interest levels. Mobile campaigns that have used location targeting outperform non-location targeted campaigns twice over[iv]. Uncle Bob's self storage's usage of location targeting helped them reduce their customer acquisition cost by one-third and treble their reservation volumes[v].

We mustn't forget though that the 'mix' is still key. These benefits come rolling in when organizations find the right mix between digital and traditional media. The key to success is not to invest in these two media in isolation but to combine both approaches.  So, how do you get the right recipe? Just as the law of diminishing marginal utility states – the more saturated a medium is, the less the desired results. Excessive category clutter – where more products are available in a specific category – means more exposure is needed. But if the brand already has high credibility – along with innovative product features -- you need fewer exposures because your brand recall is already high. Once you determine the saturation point of a medium, you should reduce investment in these channels and shift the remaining budget to digital media.

Take the consumer packaged goods industry as an example. Advertisements on TV produce the desired effect after just two or three contacts. But after eight or ten contacts, the medium reaches its saturation point. The ROI from TV advertising can be improved by reducing intensity in this medium and using the freed-up budget in digital media. When Havas Media had to implement an advertising campaign for the AB+ population, they allocated 70% of the investment towards TV and 30% towards the Web. As a result, they witnessed a 20% higher digital ROI compared to that of TV. Television as a medium typically gets pushed past its saturation point, which lowers the ROI. However, maintaining a modest intensity on the Web helps place this media in its most effective zone, producing the desired outcomes from the campaign.

Another example of a company that's got the mix right is Coca-Cola. The company adopted a 70-20-10 approach when investing in creative content, with 70% being invested in low-risk content, 20% in innovating around “what works” and 10% on high-risk content that included untested ideas[vi]. This model can be extrapolated to decide the media mix of campaigns. For instance, 70% of the campaign budget can be towards potentially safe, tested channels, 20% towards avenues such as social media and search engine marketing, and the remaining 10% towards viral videos. While the choice of media will vary from one organization to the other, the premise is to diversify investment and shift focus from purely traditional channels towards digital media.

To know exactly how much you should invest in digital media, you should consider multiple factors to gauge the feasibility of returns. Some of these factors include your target audience profile, whether they spend sufficient time on digital channels, the cost of reaching this audience and the average response window.

The success of your digital media investment will largely depend on effectively analyzing and measuring your customer's digital trail. When you harmonize traditional and digital media investments, the results are well beyond expectations. To know more about getting digital media investment right, read our paper – Role of Digital in Media Mix: Understanding Digital Marketing and Getting it Right.





[1] Havas Media, the media strategy division of the Havas Group, is the largest media group in France




[i] Association of National Advertisers, “ANA Survey Reveals Marketers Vying for New Media Validity”, July 2012
[ii] Havas Media
[iii] Havas Media marketing campaign for the FMCG sector with media mix of TV/video
[iv] Mobile Marketer, “Location targeting more than doubles performance of mobile ads: report”, February 2013
[v] Webmetro website
[vi] Mediatel, “It works for Coca-Cola and Google and it can work for you too: the 70-20-10 rule”, November 2012

About the author

Amrita Radhakrishnan
Amrita Radhakrishnan
Amrita Radhakrishnan is a senior consultant in the Digital Transformation Institute.

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