Almost every youngster I have met looking at the next big thing wants to work in Digital Marketing. Some of them, just by posting few Facebook posts, consider themselves to be the Digital doppelganger of Philip Kotler (or maybe Byron Sharp now!)
Digital is largely experimental and it is still not mainstream – every brand believes that Digital is the next big thing – the best way to connect with millennials is to catch them online.
However, in 2012, Ehrenburg-Bass Institute, based on a study of 200 brands on Facebook, found that less than 0.5% of fans actually engaged with a brand (that is, undertook meaningful activity, including comment and share, rather than just ‘Like’). It also found that Facebook fans were skewed towards heavy buyers, and that purchase frequency didn’t increase after someone became a fan.
Again, for the uninitiated, Digital is not the same as Social Media. Have hardly met ‘neo-experts’ who talk beyond Social Media and SEO while re-enforcing their ‘expertise’ in digital. Maybe a primer from this link would help.
What are the real companies saying and spending around Digital Marketing?
This month (August 2017), Procter & Gamble (P&G) became one of the first advertisers to admit to a significant reduction in digital ad spend. According to the CFO, it had cut between $100m and $140m from its digital ad budget last quarter because of brand safety concerns and “ineffective” ads. (4 August 2017)
Even after this cut, P&G still delivered over 2% organic sales growth on 2% volume growth, suggesting that what was cut “was largely ineffective”. So much so for the modern marketing methods!
Procter & Gamble’s chief brand officer Marc Pritchard, has been critical of the archaic advertising practices followed by agencies for the digital space.
“I confess that P&G believed the myth that we could be a ‘first mover’ on all of the latest shiny objects, despite the lack of standards and measurements and verification. We accepted multiple viewability metrics, publisher self-reporting with no verification, outdated agency contracts, and fraud threats – with the somewhat delusional thought that digital is different and that we were getting ahead of the digital curve,” he explains. According to him, digital is “still a nascent business model” led to “experimentation and trying different things” but now is the time for marketers to ask more questions.
Marc Pritchard also claimed that the media supply chain is “murky at best, and fraudulent at worst” and that companies are finally starting to question the gleaming technological promises that were made about programmatic and digital media in general.
So what are the solutions?
The CBO has put together four key focus areas for P&G in terms of digital – Adopting one viewability standard (the Media Ratings Council (MRC)-validated viewability standard), implementing accredited third-party measurement verification, auditing the auditors, getting transparent agency contracts and preventing ad fraud. (March 2017)
A standard in viewability will enable marketers to see all channels / media through a common lens – and enable them to take more qualified decisions on channel choices. At the end of the day, digital and traditional marketing do not work in siloes and customer reach plans should put both be on the same platform. There is a need to have consistent viewability across Facebook, Instagram, Twitter, Snapchat, Pinterest, Pandora, YouTube and others.
In spite of this so called void, digital spends are growing overall. While both Facebook and Google are criticized for their lack of consistency, Facebook’s results for the three months ending June 30 show its advertising revenues up 47% year on year at $9.2bn despite it admitting to 10 measurement errors. Meanwhile, YouTube’s brand safety controversy has had little impact on Google’s ad business. Alphabet, Google’s holding company, saw revenues increase 22% year on year to $24.8bn (£19.2bn) in its most recent results.
Marketers should also beware of using digital too much for sales and not enough for brand building. This is an area that even P&G admits it has not got right, and that it needs to focus more building its brands online.
Based on various pieces of information around this, following are the evolving drivers for the Digital World –
- Drive Brand Building through the digital framework
- Transparency in the measures. When you have transparency across all platforms you can evaluate more clearly how this medium in digital compares to this medium in other places in a much more transparent way. (Marc Pritchard)
- Standardize measures (through viewability) across platforms so that targeting can be more focused. “We want mass reach with precision, which seems like an oxymoron but it’s exactly right (July 2017)”