Making the most of digital marketing spend
When digital advertising first came into being, it was regarded as something of a panacea, and often discussed uncritically by those in the industry. Platforms like Google and Facebook provided unparalleled levels of reach, addressability and (dare we say it) “performance”. Whilst the first two points are very defendable, these platforms have marked their own work on the latter, laying claim to huge effectiveness without producing the objective evidence to back it up.
There have been murmurs of discontent for some time. In 2015, Proxima released a report which estimated that as much as 60 per cent of digital marketing spend was going to waste. This figure should have been a wake-up call – but with the aforementioned tech giants holding so much data, and so much potential reach, it has been hard for businesses to step away and accept a small degree of risk, despite the high prospect for better results. Forrester also recently published the “Why Marketers Can’t Ignore Data Quality” report, and found that 37 per cent of marketers waste their spend as a result of poor marketing/media data quality.
Legacy data practice
From my experience working for large data and technology companies, and with our brand and publisher clients, I wouldn’t be surprised if these figures are higher. Not only do businesses invest too much in legacy data practices, but teams within businesses often aren’t aware of the great, useful data being kept in other departments. Silos of information lead to inefficiency and duplication. This, in combination with over-investment in under-utilised technology and obsolete data practices, could easily be leading to hundreds of million, if not billions, of wasted investment each year. Parking all of this in the “too hard” bucket is simply throwing in the towel, or burying your head in the sand.
Rather than jump on the ‘the industry is broken’ bandwagon, let us consider what the ‘Age of Optionality’ could deliver. We all know there is still too much reliance on walled gardens, no different to the fixation with TV as its predecessor for ‘reach’. The good news is, there are multiple catalysts driving change and many solutions emerging to solve for this problem.
Firstly, the demise of third-party cookies is forcing an overly engineered, complicated and ultimately self-serving MarTech and AdTech ecosystem to look at new ways to collaborate in order to provide the infrastructure around which advertisers and publishers can base their customer initiatives. As we emerge from the initial fear-mongering and scepticism over why this was happening, there is an opportunity for the industry to work with brands and publishers to take stock and unlock the potential of their own data.
This approach will allow brands and publishers to create new stories and value propositions with their customers, rather than continuing the imbalanced reliance on and disproportionate investment in static or low quality/value external data from other sources that may have no accuracy or authenticity for your goals, let alone tie into the experiences and wants of your customers and/or consumers. In collaboration with existing and emerging technology, strategic trade, sponsorship or media partners, there is a way to create optionality in the worst case, and perhaps even a more controlled way to deliver competitive advantage yourself.
So pragmatically, what is the first step?
Should we all just rip off the band aid? No. But brands must start to learn how and when to step away from walled gardens. Undoubtedly, this is a balancing act—and this is where data and identity within advertising and marketing plays an increasingly crucial role. Marketers need to look to a future where data and identity can be gleaned compliantly, with careful regard for customer privacy concerns, whilst creating value for the customer. Using your data to then understand—in collaboration with existing and new partners—where those customers can be reached outside of the current walled gardens quickly starts to show the answers to whether you should (and equally importantly, whether you are able to) create optionality in your marketing and advertising efforts.
All this is to say: there is no simple solution. Technologists usually have one set of answers, marketers another, and the lack of shared understanding and terms of reference between the two makes it difficult for conclusions to be reached. However, it’s also not impossible – and the rewards for success are huge in terms of return on investment, but also in empowering your business to understand customers, and control your own destiny.
Neil Joyce is co-founder and CEO of The CLV Group