How Effective is Digital as Part of the Marketing Mix

The digital space has come under a lot of fire the past few years as we learned about the 2.5 million fake profiles on Facebook and the web is only 50% human traffic. The trust factor of some of these new digital channels is going downhill fast and doubt is creeping as do they really work? Is the data reliable or just part of an elaborate algorithm to rig results to commit ad fraud.

Click Bots are used are part of the ad fraud scheme

Ad fraud (also referred to as Invalid Traffic) is a black hat hacker business model of fraudulently representing online advertisement impressions, clicks, conversion or data events in order to generate revenue. Digital is the only advertising channel that has rampant fraud as part of the ecosystem and is estimated at $42 Billion worldwide. Traditional channels do not have the audience verification and fraud problems that some digital ones do.

The Nielson Annual Marketing Report: The Age of Dissonance offers a snapshot view into the current state of the industry. This reports dives into 

  • Why marketers hold digital channels to a different standard than traditional channels
  • How perceptions influence digital spending
  • Why brands shrug off data quality issues
  • What obstacles are hindering OTT advertising adoption
  • Tactical recommendations to improve marketing effectiveness

Digital has turned the business of marketing on its head. We’re long past the time when a consumer purchase decision could be traced back to a single point of contact: a mailed-in coupon, in-store discount, or even TV campaign. Knowing which channels will reach consumers along an increasingly fragmented purchase path—and measuring their performance—make it difficult to create the marketing mix that works best. But these aren’t the only challenges facing marketers today.

The research shows that marketers today are holding digital channels to a different standard than traditional channels. The novelty factor is strong, and a digital channel that’s perceived to be effective invites more spending even when that effectiveness cannot be readily verified. Traditional channels don’t have that luxury.

FINDINGS SUMMARY

DIGITAL MEDIA BUDGETS FOLLOW PERCEPTION, NOT REALITY

Novelty plays a role in marketers’ confidence, and a digital channel that’s perceived to be effective invites more spending even when that effectiveness cannot be readily verified. Measurement and a channel’s perceived effectiveness are aligned, but not always. Newer channels tend to get the benefit of the doubt.

BRANDS SHRUG OFF DATA QUALITY ISSUES

Despite the negative outcomes of using poor quality data, data quality is a top priority for only a quarter of marketers, well behind targeting, ad creative and reach. Brands are often less concerned than their agency about how data quality might a ect the success of their campaigns.

DIGITAL WILL BREAK DOWN ADVERTISING AND PROMOTION SILOS

Marketers place a much higher priority on advertising than they do on promotions, with paid media often favored by agencies and earned media by brands. But digital will disrupt conventional silos, rewiring promotions and creating new opportunities.

OBSTACLES HINDER OTT ADVERTISING

One of the most promising new channels for advertising is over-the-top (OTT) TV, but its development is currently hampered by a variety of issues that will need to be addressed to fulfill its potential.

MARKETERS FAVOUR NEW CUSTOMERS OVER OLD

Despite the value of existing customers, marketers prioritize acquiring new customers and increasing brand awareness. Retaining customers is a distant third, while preventing churn is least important.