It is becoming harder to track digital advertising campaign performance, measure ROI, and trust third-party data but ROI can be improved by using multiple mediums within marketing campaigns, WARC Data Managing Editor James McDonald has said.
McDonald says “In a multichannel world, it has become harder than ever to track campaign performance, to measure ROI, or to even trust third-party data. This results in millions of ad dollars wasted each year.
“The problem is compounded by an environment of ad blocking, fraud, and consumer distrust, and is hazed by walled gardens, programmatic stacks and opaque practice.”
McDonald quotes research that found $35 billion of the $60 billion FMCG brands invested in digital advertising was ineffective in 2018, and that 55 cents in every programmatic dollar is paid to intermediaries within the chain, which equated to $30 billion in 2017.
“Further, almost a quarter of CMOs say that showing ROI is now their greatest challenge, while 70 per cent of brand marketers in the UK believe evaluating digital spend has become more difficult in the past five years.”
Using multiple platforms lifts marketing ROI
“It is vital that ad investment works harder in the media mix to obtain optimal reach and effectiveness,” McDonald says.
“The most effective media mix will always be one that is calibrated to meet specific marketing objectives, and the best results are often seen when a number of channels are working in synergy.”
McDonald points to Advertising Research Foundation data which shows that two platforms used in tandem can lift ROI by 19 per cent, and growth accelerates as each additional platform is added – up to 35 per cent higher ROI with five platforms.
WARC Global Ad Trends report demonstrates ad spend shift
McDonald made his comments as part of the release of WARC Data’s Global Ad Trends report.
WARC collaborated with Nielsen to create a new, industry-standard measure of net advertising investment data across 19 product categories in 23 regional markets. Data used runs from 2013 and covers magazines, newspapers, TV, radio, out of home, cinema and internet display advertising. Based on this data, two-year projections are available for all markets, media and categories.
McDonald says that the findings drawn from the data “shed new light on how different sectors value advertising media, and how this has changed over time”.
The data demonstrates a shift in advertising spend to online over the last five years, generally at the expense of print media.
“This shift in spend is particularly stark within financial services and retail, sectors which have heavily developed digital platforms to serve their customers in recent years. Conversely, magazines still play a role when advertising toiletries and cosmetics products: over $2 billion was invested last year,” McDonald says.
The WARC Data outlines that there has been a big shift to digital advertising in the financial sector over the last five years, with over half of the $43.2 billion invested during 2018 allocated to internet formats, including online video, social media and paid search.
Print advertising accounts for 11 per cent of food business ad spend, sitting at $2.8 billion globally in 2018. However this spend is down 12.7 per cent year-on-year.
TV is the main advertising platform for food businesses, with 65.2 per cent of the $25.3 billion invested in 2018 spent on the medium. However year-on-year stats show that this is in decline, with internet investment rising (although still low at 14.4 per cent).
Print accounted for 15.5 per cent of retail sector advertising spend in 2018 ($9.6 billion), down 15.5 per cent year-on-year.
In general, global advertising spend for the retail sector remained the same in 2018. An increase in internet spend was offset by declines in other advertising mediums (including print). In general, the report states that retail ad spend has tracked downward in recent years (a rate of -1.8 per cent since 2013), however online spend has increased.
Toiletries and cosmetics
Print advertising accounts for 11.4 per cent ($2.9 billion) of 2018 spend within the global toiletries and cosmetics sector. This is down 12 per cent year-on-year.
Historically, toiletries and cosmetic ad spend has been dominated by TV and print. But overall ad investment in the sector has decreased by 4.1 per cent each year since 2013.
WARC provides evidence, expertise and guidance for more effective marketing strategies. WARC has published independent and objective advertising research since 1982.
WARC’s full Global Ad Trends report is available exclusively to its clients. For more information about WARC’s services, visit their website.