Just when you thought you had it nailed, your media strategy was out of date the next day…or was it?

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Carl Carter, head of marketing effectiveness & strategy, IRI

Carter: embrace new technology for testing and measuring media campaigns

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So you spent your money on the “best” media money could buy, to reach the audience that you “learned” was the target audience for your brand, yet the return on investment (ROI) isn’t what you expected?

For marketers in FMCG organisations, their media agencies and the publishers who serve them both, it is becoming increasingly difficult to know where to spend the media budget and to understand which type of media is having the most impact right now. Retailers, manufacturers, media agencies and publishers, all need to think very differently about their approach to media effectiveness. This is not simply because of the changing media landscape but because previous investments in measurement assumed a world with little change versus the seismic shift we have experienced.

Media spend in recent years has fluctuated, particularly for more traditional media like TV, whilst share of Digital and Out of Home (OOH) has seen a significant increase in investment. In 2010, TV represented three-quarters of spend, but this dropped down to 58% in 2017 after 5 years of a more unsettled picture. TV remains the dominant channel in terms of ad spend, but it’s clear that it is losing footing to its younger siblings and cousins of the digital generation. TV is no longer the medium of old, but more fragmented, encompassing digital formats like Broadcaster Video on Demand (BVOD).

Digital media spend has seen its own diversification. Historically, it was largely display advertising, which accounted for over 90% of digital spend back in 2010 but by 2017 it was down to 41%. This wasn’t because display disappeared into a click-less abyss, but instead it gave birth to so many advertising variants across a range of publishers. These publishers included Google, Facebook and programmatic ad serving platforms, which were capable of delivering rich and targeted content through their own networks as well as others.

This re-birth created the challenge that many of us face today, both the categorisation of such formats, as well as the value impact they have on our marketing budgets. More and more channels are evolving, whether that’s social, which accounts for around a third of spend today, mobile or online video.

It’s no surprise that brands and retailers are struggling to grapple with where they are spending their budgets – and more importantly, if it is delivering the results they really want.

When brands and retailers are looking to invest their money, they are looking at two key criteria – efficiency and effectiveness. Efficiency is the return on ad spend (ROI or ROAS), fundamentally how much you get back for every pound you spend. Effectiveness is about driving value and volume or selling as much as you can. In an ideal world you’d balance the two. Focusing too much on one to the detriment of the other can lead to over-spending on your marketing mix, the channels within it, or alternatively spending too little and never reaching the required volume to make an impact.

TV still provides the most effective contribution of sales volume and continues to command the highest share of spend, which remains strong in the current climate. Other channels like OOH, Video on Demand and Digital deliver commendable and growing ROIs, however they fall short of driving the same effectiveness.

So, what should FMCG companies be doing right now and how should they be spending their investment? Just because the world is changing and the way we consume media is changing with it, doesn’t mean advertisers should suddenly forget everything they have learned to date. If TV is working, it makes sense to continue to invest, but it is time to reflect on where the channel and audience is heading. It is time to question whether it is history and the strong levels of investment that are the primary drivers for its continued success.

We are living in an increasingly addressable world. It’s much harder to differentiate between audio visual channels when planning your advertising spend. Through TV we can speak to an individual household, target by audience and even link back to programmatic display to re-target consumers. It is not just TV; Out-of-Home is also changing and has the ability to ingest and analyse data, utilising anything from weather, location and even facial recognition for ad serving.

Other disruptive forces are at play, including the growth of Subscription Video on Demand, which offers brands a captive audience. Despite figures showing a recent slow-down in the growth of Netflix and Prime Video subscribers, the arrival of new competitors like Disney+, Apple TV and HBO Max offer lower cost services, influencing more and more consumers to “cut the cord”, the practice of moving away from traditional aerial, satellite and cable services.

With audiences in different places at different times using different formats, there has never been a better time for brands and retailers to use test and learn techniques and technology. Artificial intelligence (AI) is fueling this area and allowing companies to step outside of standard metrics to understand what matters when it comes to ad spend. The industry is realising that in a fragmented and challenging media landscape, agile testing and analysis is vital to gain a more granular level of detail beyond the broad channel mix, which is increasingly diluted.

Retailers and manufacturers are slowly moving in the right direction however it requires a greater willingness to sacrifice short-term gains in the longer-term pursuit of knowledge.

IRI has been working with many industry partners to provide more agile and concrete approaches to understanding campaign efficiency and effectiveness. This includes LoopMe who leverage AI in their ad platform to qualify and enhance the audience for increased purchase intent, which IRI then measures. This provides a closed loop on brand advertising, and helps brands optimise their media campaigns and ad spend.

A recent example is Twinings Tea as part of their Superblends campaign. Working with LoopMe and IRI, Twinings was able to quantify sales attribution, combined with real-time optimisation to purchase intent against detailed audience insights.  The campaign ran as part of a test over a 21-day period. The results were fantastic showing between 6% and 16% uplift in purchases over the period, a 20% uplift in purchase intent. It also delivered a halo effect on the Twinings brand, with an overall uplift of 4.2%.

Brands like Twinings are embracing new technology and methodologies for testing and measuring media campaigns.  It’s time for others in the industry to be brave, to challenge themselves and do the same.

For more information on IRI and Media: https://www.iriworldwide.com/en-GB/Solutions/Media/Pre-Campaign/IRI-Digital-Active 

https://www.iriworldwide.com/en-GB/