Last year was shaky for the advertising industry. With spend down across the board, there has been an increasing pressure on agencies to prove the worth of their media spend, and it is the responsibility of the industry as a whole to ensure advertising is attributable and effective.
Sir Martin Sorrell, one of the most recognisable faces in advertising, and his agency constantly made headlines about the downturn in advertising spend in 2017. WPP slashed its growth forecast twice, with the second time being between zero and 1%, after reporting that net sales in the first half had fallen by 0.5% to £6.3bn, missing analysts’ forecasts. Sorrell put it down to a turbulent second quarter in which client spending slowed – “particularly in the fast-moving consumer goods or packaged goods sector”.
WPP wasn’t alone, as other advertisers working with many FMCG companies have seen the trend of advertising spend reduction. These companies often focus on getting their brands in front of clients and are less focused on tracking return on advertising, but one must wonder, is advertising companies’ media spend truly cost-effective?
Some companies are pulling back on ad spend but not seeing sales decrease. There’s a good chance these ad spends will increase once again when sales dip. That being said, the results from WPP show advertising needs to be more effective.
How can we ensure advertising is more effective?
It raises the age-old conundrum made famous by John Wanamaker, the department-store magnate: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”
The benefit of digital advertising, however, is our ability to correlate customer behaviour to transactions. As we know, we can track online interactions such as impressions of ads, video views and searches through to user purchases. We can essentially analyse their online activity leading up to that purchase and see what advertising has been interacted with online, giving that advertising validity.
This ability to track digital activity in an increasingly digital age has given companies more reason to spend on digital ads. Group M recently published their market review “Interaction 2017”, in which they claimed that in 2017, 77 cents in every new ad spend dollar went into digital. That is significant, and a big step from the six cents in every dollar we were looking at ten years ago.
Having said this, we all are very aware of the important role offline advertising, especially TV, plays in the advertising space. Even for companies that are increasing their digital focus, there is still something to be gained in TV, radio and other forms of offline advertising.
Attributing TV advertising to digital activity
Although how this is tracked accurately is hard to quantify, Google is having a very good go at matching digital activity and attributing TV advertising to it.
Google has been working hard to build a product that truly analyses every interaction a user makes at the most granular level. This enables companies to see data in a variety of groupings to make it easier to use these insights to inform your marketing campaigns.
This may sound like nothing new, but until recently this data-driven approach focused on online cookies and was limited to digital channels only.
Now Google is integrating TV, watching and linking this more accurately to subsequent online activity. This is done by analysing historic web traffic in Google Analytics (GA) and subsequently matching the times of TV spots to web trends – such as increases in web traffic in GA and increases in search volumes down to the individual minute post a TV spot airing.
This can give us rich data on how much search volume increases following every TV spot, down to the individual minute:
This analysis can give us rich information on how effective the ad is and how cost effective TV or even radio spots are. This data will help support TV and radio planning in the future.
With this new feature, we can drill down into TV ad conversions to find out:
- Which channels, programs and networks have been most effective in driving quality online traffic
- What length of ad is most effective
- What time of day or day of the week is best for advertising
There is a whole plethora of information to support your offline strategy. We can also link it back to a few factors, depending on if the client has an offer running simultaneously or not, or on the overall effect on sales volume and revenue driven.
At Croud, we utilise the data from online streams to support our clients’ offline strategy. With the help of our partners at Google, we can identify, for example, that a popular primetime drama on one of the major networks is significantly more effective than a popular evening soap on another network. Additionally, we can see which states in the country see the best results with different programs. This can be essential planning, especially when physical store locations for footfall are an important consideration.
There is still more work to be done; however, this is a great step in supporting offline advertising and showing the value of TV spots to an advertiser.
If ad spend continues to decrease, thinking back to Wanamaker’s dilemma, we need to work even harder on that 50%. The cross-channel analysis of online and offline results can only help!
Contact us if you’d like to find out more about the work Croud is doing to help companies attribute their TV and other offline advertising to digital activity.