This article is based on the Nielsen annual marketing report, highlighting that marketing is continuously transforming, with a significant shift towards digital media. In fact, over half of all advertising budgets in the US are now allocated to digital marketing. However, the efficiency of these new channels often remains uncertain.



As the digital landscape expands, so do the mixed feelings among marketers, many of whom believe they lack the proper tools to accurately assess ROI across all advertising campaigns. Digital marketing investments are frequently based on a presumed value that is not substantiated by actual data, leading to the misallocation of valuable marketing dollars and the overlooking of potentially more effective marketing strategies. For long-term success in marketing, it is crucial to substantiate your strategies with solid data.

The digital revolution has significantly impacted marketing, making it challenging to attribute consumer purchases to specific campaigns. This fragmentation complicates the creation of an optimal marketing mix that effectively attracts more customers, presenting one of the many challenges marketers face today.

Digital Media Budgets: Perception Versus Reality

An analysis of over 350 marketers has revealed concerning insights. The novelty of digital expansion is affecting marketers' confidence, leading to the use of these channels despite a lack of proven success. Decisions are often based on perception rather than reality, with perceived value driving increased spending. This is alarming, as a flawed marketing structure can result in a company losing millions of dollars on ineffective advertising campaigns.

Just as in 2018, paid searches and social media continue to dominate, now joined by video marketing. Despite other channels like podcasts, streaming audio, and mobile advertisements being deemed less effective, email marketing remains highly valued for its straightforward ROI calculation.

Surprisingly, social media and video marketing lag behind email in terms of perceived effectiveness, with many marketers confident in these digital channels despite lacking data to support a successful ROI. This often leads to continued investment, even when performance is lackluster, for over 12 months. Conversely, traditional media forms like print, radio, or TV are quickly abandoned if they do not yield desired results, indicating a higher standard is applied to traditional channels than to digital ones.

Relying solely on intuition is insufficient. Seek out measurement solutions that can validate your media perceptions. While it may be difficult to pinpoint which marketing strategies directly influence customer behavior, doing so is necessary for the long-term success of your marketing campaigns. Consulting with industry experts and overcoming learning curves can ensure your investments are well placed.

Data Quality is Not a Priority

An effective marketing campaign starts with clear objectives and strategies for utilizing all media channels effectively. But once a strategy is in place, how is its effectiveness measured? Audience targeting is a top strategy among successful marketers.

Remarkably, brands are often less concerned about data quality than agencies, leading to potential long-term issues. Companies typically have access to more data than agencies, including historical data on partnerships, customer behavior, and campaign performance.

Minimizing the importance of data quality is a significant concern. Without accurate information, marketers must also consider how this oversight might ultimately affect their relationship with their agency, given that marketers are paid for results.

Do not underestimate the importance of data quality. Enhance data quality while focusing on targeting your audience.

Digital Will Disrupt Advertising & Trade Promotions

Many marketers view media, whether paid or unpaid, as a more effective strategy than trade promotions, despite companies often spending more on trade promotions than on media advertisements. This perception is shifting, as digital technology, including augmented and virtual reality, promises to revolutionize how products and services are promoted, offering greater control over in-store performance and increasing the availability of data for better planning and performance.

Trade promotions offer valuable insights into consumer behavior, such as shopping habits and conversion trends. Avoid focusing too narrowly on paid media and instead, leverage earned media for a more balanced marketing approach.

Obstacles Affecting OTT Adoption

OTT (Over-The-Top) media services have the potential to serve as an excellent marketing platform by bridging digital and traditional media. However, adoption is hindered by challenges such as measurement capabilities, internal knowledge gaps, and concerns over media planning efficiency and transparency.

Despite these challenges, some forward-thinking marketers are proactively addressing these issues before the market becomes too saturated. Success in this area requires a thorough evaluation of the complex factors influencing consumer behavior. Overcoming obstacles may involve partnering with other brands to leverage collective strengths and fill knowledge gaps.

Preference is Given to New Customers

The 80/20 rule, suggesting that 20% of a company's customers generate 80% of its revenue, continues to influence marketing strategies. Yet, there's a tendency to prioritize acquiring new customers over retaining existing ones. Nielsen's recent study indicates a growing trend of disloyalty among existing customers, challenging the traditional reliance on the 80/20 rule for predicting future revenue. In an era where brand loyalty is diminishing, focusing on customer retention becomes increasingly important.

Implement marketing strategies that prioritize high-value customers, focusing on retention and satisfaction, and communicate these objectives clearly to your agency.

Recommendations for Marketers

For higher profits from investments and improved long-term outcomes, marketers should consider the following recommendations:

• Communicate goals and strategies clearly with your agency;
• Understand the negative impacts of focusing disproportionately on paid media;
• Prioritize data quality to support effective customer targeting;
• Continue investing in proven channels like paid search, social media, and video, without neglecting email and other supportive channels;
• Explore OTT efficiency through industry partnerships and skill building;
• Base marketing decisions on solid data, not guesswork, and seek expert advice to navigate complexities.

In conclusion, while perception has long guided media planning, marketers are increasingly recognizing the mismatch between enthusiasm and actual returns. The industry is evolving, with solutions emerging to support more informed and cost-effective decision-making.