We’re long past the time when a customer’s purchase decision could be traced back to a single point of contact. Gone are the days of mail-in coupons, in-store discounts, and even TV commercials functioning as one-and-done promotional marketing campaigns.
As a result, knowing which channels consumers will interact with along an increasingly fragmented purchase path – and being able to measure the effectiveness of those channels – has become challenging for brands and agencies alike.
In this year’s Nielsen Annual Marketing Report, we surveyed marketers at more than 350 agency and brand marketers around the globe to identify challenges they’re facing, their priorities, and how they perceive the effectiveness of the channels they’re investing in even when ROI measurement isn’t very clear.
We found that investments in digital media are often driven by a sense of effectiveness that isn’t entirely grounded in reality—a scary proposition when hundreds of thousands (or even millions) of a company’s marketing dollars could be at stake.
While digital comes with a number of challenges, it also presents enormous opportunities when used as part of a holistic marketing strategy. Here are four best practices that can help marketers unlock the full potential of their campaigns in 2020.
1) Base digital media investments on facts, not perception
Our study found that, despite marketers’ lack of confidence in their ability to measure ROI for newer digital channels, they still perceive those channels to be more effective than traditional ones.
For example, marketers have a lot of faith in social media and video, which rank high in perceived effectiveness.
However, these channels fall in the middle of the pack in terms of marketers’ confidence in their ability to measure ROI. The story is very different for traditional channels. While these channels have been around for much longer, their effectiveness is not a guarantee that budgets will increase.
It’s human nature to like shiny new things, so it’s not surprising that digital invites more spending from marketers. But while detecting which marketing activities are influencing consumer behavior can be difficult, relying on assumptions isn’t the answer.
Marketers need to make sure their perception of these channels matches reality. By putting measurement practices in place, marketers can ensure their investment decisions are well founded and their strategies are paying off.
2) Prioritize data quality
Despite the benefits of high-quality data, only 28% of study respondents cited data quality as a top marketing priority, ranking well behind audience targeting, ad creative, and reach. Yet one of the surest ways to waste scarce marketing dollars is by relying on bad data.
Data is collected for the purpose of analyzing past performance and optimizing future initiatives, but without accurate data, marketers have to question the validity of any insight. Marketers may prioritize audience targeting, but none of that targeting will hit the mark if the data that sustains it isn’t accurate.
While a wealth of information is available to help marketers tailor their channels and tactics to specific audiences, there is still no guarantee that those activities are effective – and worth investing in again in the future – without reliable, quantifiable results.
Factors such as granularity, coverage, and sources of data can influence the accuracy of marketing measurement, so brands need to put equal resources toward assuring data quality as they do targeting and reaching audiences.
3) Embrace the promise of connected TV
As a bridge between traditional and digital media, connected TV combines the reach and captive audiences of television with the addressability of paid search and video.
It has the potential to be the ultimate advertising platform, yet our study shows that internal knowledge gaps and measurement challenges are slowing its adoption.
Fear not: industry partners are ramping up their measurement solutions for connected TV, which makes it the opportune time for brands to build up their in-house skill set and capitalize on this new channel before the competition crowds in.
To tackle the learning curve associated with connected TV and maximize the channel’s potential, marketers should consider testing small-scale campaigns to assess performance before scaling more broadly.
4) Refocus efforts on preventing customer churn
Most marketers accept the Pareto Principle – otherwise known as the 80/20 rule – as true: In general, 20% of a company’s customers represent 80% of its sales. In fact, Nielsen even tested and validated this principal in conjunction with Viant in 2015.
Yet our study revealed that a majority of marketers are focused on acquiring new customers and increasing branding awareness, with just 8% of marketers focused on reducing churn. This lack of focus on churn is a missed opportunity for marketers. Recent Nielsen research found that global disloyalty is growing, with just 8% of consumers considering themselves firm loyalists to products.
Brands need to balance customer retention with the demands of growth to account for these realities. This includes segmenting high-value customers to help guide media planning and messaging strategies.
Continuous growth in the digital space has dramatically changed how consumers interact with brands. The proliferation of new channels has created a complex environment for marketers.
To be effective, marketers need credible data to back up their efforts. Pursuing channels that are perceived to be effective can lead to wasted spend on tactics that simply aren’t working.
The only way marketers can successfully navigate the digital marketing environment is by seeking out measurement solutions that can confirm their decisions are well-founded and their campaigns are reaching their full potential.