Growing Preparedness and Trust In the era of the Covid-19 pandemic, the concept of whether your business, or your job, is essential has moved to the forefront of our society. According to various news sources e.g., FastCompany, Business Insider, US…
Demonstration of ROI via Data
Many publishers are scratching their heads and wondering what is happening to their print and digital advertising revenue.
Most are internalizing the news and hype that Facebook is stealing away their advertisers and revenue or that most advertising dollars are migrating back to Google’s platforms. Some are hearing print advertising is dead or dying because no one reads print anymore.
Perhaps those are easy excuses to explain away the persistent revenue dips and the challenges. Facebook is, of course, having an impact but it isn’t the major factor impacting your advertising revenue. What Facebook has done effectively is offer the market the tools, measurement, data and opportunities they desire to reach intended targets. Google is indeed once again picking up steam and dollars, particularly from those frustrated by Facebook’s closed loop system but that is only one factor in the mix. Print in many regards is still strong but the strength is found in a smaller catalog of periodicals and magazines.
There are other issues and trends impacting advertising revenue in 2019 that you should consider. As digital data collection matures, those who have traditionally spent marketing dollars lavishly without question are now confronted with a significant challenge:
- How to quantifiably demonstrate the return on investment (ROI) for the dollars spent?
- How to qualify that the intended leads are being reached and are they moving towards conversion?
- How can a segmented and defined list of leads be reached?
- How can performance and other reports be generated and shared to further demonstrate ROI?
The digital world brings many new opportunities to reach customers directly. It also operates in a significantly changing marketplace where prospective customers are being barraged with emails, messages, and news alerts– all of which distracts their attention.
Cutting through the clutter requires hyper-targeting to segmented audiences to generate leads and convert them to paying customers. This is accomplished by using personal, interaction, behavioral and performance data to connect prospective customers to advertised products and services. The shift to inbound marketing and use of marketing automation has become critical. Ultimately, it’s all about the data. Data reveals knowledge about interaction, viewability, performance and whether a lead converted to a paying customer.
The First Dilemma
Many legacy publishers are still not digital or data-ready. Their ability to collect and manage data and analytics at depth to demonstrate the true performance of advertising is relatively unsophisticated.
Most are still focused on the basics such as page views, visitors and sessions. Most also generally represent the audience they reach and engage with without detailed qualification or quantification via high level readership surveys and reports.
Most have not yet mastered how to collect, manage and communicate deep and detailed performance data back to their advertisers or sponsors. It is time to get more intimate with your audience, know them deeply and communicate out to your sources of advertising revenue.
An Ad’s viewability isn’t represented by the page view measure, nor is it represented by a session. Those two measures let you know a user has come to the site and viewed a page. He or she may have viewed the top of the page, read something in the middle and moved on. If the ad is placed below the fold, the user never saw it.
If a user landed on a page and quickly navigated to another, depending on the ad placement, the user/visitor probably didn’t view it.
Viewability used to be generally defined and vague results accepted. With the continued sophistication of tracking interaction and serving of Ads, one can no longer be vague.
The Second Dilemma
Most publishers are focused on reviewing anonymized high-level digital performance data. This translates to how many visitors, returning visitors, pageviews and sessions a site or section of a site/mobile offering receives.
A majority of publishers simply report out the high-level data without understanding the impacts of invalid traffic, bounce rates, consumption of content and who the users actually are.
As a side note, research shows that content adjacent to the ad plays a role in promoting interaction.
Ad placement to relevant content requires a level of sophisticated management to maintain or grow advertising revenue by proving the value you created for the advertiser.
Publishers need to take a strategic and tactical direction to mature their data collection by understanding, tracking and building the competency to respond to their major revenue sources.
All publishers should understand the value that the data provides to their own performance and how it removes the ambiguity in decision-making and reporting.
The Third Dilemma
An advertiser’s goal is to generate leads and convert those leads to paying customers. It is all about acquisition, attribution and generating revenue. To be a viable publishing business, you need to produce new leads and entice existing customers to buy more.
eMarketer’s study on Customer Acquisition in North America reveals a few important trends:
- Building brand awareness in the customer journey funnel recognizes an anonymous user as a known entity; signing up and/or making an actual purchase quantifies customers.
- Data is a strategic tool to win digital acquisition. The savviest marketers use data to inform their marketing mix across channels and devices, including measuring advertising effectiveness.
- Data can also help marketers be more relevant and personalized in their messages to prospects. A 360° data approach creates a unified, single-customer view, opening the door for more tailored, audience-centric tactics—an essential part of a strong acquisition strategy.
Today’s chief marketing officers, regardless of organization size, are being pressured by their C-level peers or managers to bridge performance to marketing dollars spent. CEOs are becoming more data-driven and less gut oriented. It is all about acquisition and measurement of the marketing mix, including digital advertising.
Marketing budgets, regardless whether campaigns are awareness-or sales-oriented, will continue to be data-focused to ensure targets are reached, leads are generated, conversion is tracked and teams are evaluated.
The Audience Curation Dilemma
The prior discussion brought forward the need for concrete data and a move away from generalized anonymized traffic. Today’s advertising marketplace is seeking to acquire access to specific audiences not generalized “reader” or “user” totals. An audience of readers, viewers and consumers who most closely match their targeted prospect customers. Perhaps it is those who purchase similar products, perhaps it is health care providers who prescribe certain drugs, or business professionals who serve in a C level role within a certain and defined industry segment and whose budget purview matches the advertisers reach goal.
Given the controversies over time on advertising performance including corrections to video viewing behaviors, ad display and ad viewability, bots and more, advertising dollars are being pulled away unless one can provide via data that the ads are reaching the defined audience targets.
The ability to match what is being demanded, requires significant abilities, platforms and approaches to build up concrete and valuable audience data. Data that is not ambiguous or generalized but which includes significant implicit and explicit attributes that can be sliced, diced and leveraged to define audience segments and use those segments as ad targets. Implicit and explicit attributes include demographics, location, position, online behaviors and more.
The creation, curation and management of audience data requires appropriate platforms and more often than not the acquisition of additional 2cd and 3rd party data to amend what is being collected. Also needed are the skills internally to manage and represent the offering to the marketplace. You may have heard the terms Customer Data Platform (CDP), Data Management Platform (DMP), Data Lake or similar. You may also have heard about probabilistic modeling, look alike audiences and herd types. If you want to learn more about the technical elements, please read our subscription technology ecosystem blog series created in partnership with Subscription Insider.
Each and many more elements, technologies and platforms are required to effectively create an audience development and management platform. Once established, a publisher must constantly create content and offerings that bring the right traffic to its sites or digital properties and constantly gain more and more data about those that come to reach a scale desired by the marketplace.
The effort also comes with opportunity. As most publishers gain deeper understanding of their audiences, the knowledge resulting from the collected and curated data and packages of the data can be shared/offered as a targeting service or sold to those interested. The data can also be leveraged to improve the qualification and quantification of print advertising reach, readership and consumption.
The Facebook Dilemma
Facebook is impressive in its ability to offer advertisers proof of return-on-investment (ROI) within its own platform.
An advertiser can select or create an audience that matches their targets (geography, demographics, interests, etc.). They can then set the detail on when and how the ad will be displayed and gain insight into its performance. This information is golden to the advertiser but there is a growing desire and need to track through to a website and determine conversion. Advertisers often don’t have the ability to move the prospect off easily to its websites, forms and offers. Facebook likes to keep its users contained within its App and platform.
The captive environment offers limitations to advertisers as it is challenging to truly complete the conversion chain and determine the converted value to advertising spend. A user must take an additional step to move beyond the App or platform or interact with the advertisers targeted site within the App or platform. As such, many have migrated back to Google given the lack of challenges in tracing the chain of action and behavior.
Facebook is clearly a factor, and remain so, but it is also the elephant in the room. It is a machine in data collection and management and one now mired in continual controversy given its management of data and access via its “partners” and development platform. There are pros and cons.
A typical publisher cannot compete at a similar level but may be able to offer more value that counters the cons particularly given the latest developments. That said, Facebook remains a great role model for creating value. The appeal is the average of 50 minutes-per-day individuals spend on Facebook and the opportunity to reach the desired real or look-alike audience.
Observe Facebook’s strengths and learn to match what your advertisers want from you; become more data-oriented and share your insights and intelligence.
The Programmatic Dilemma
Another major factor is the exponential growth of programmatic. A publisher typically allocates resources to retain its sales staff. However, programmatic makes ad placement available in the market through automation. It seems a no-brainer to move into programmatic, significantly reduce operational overhead and sit back and collect the revenue.
It appears easy, but the main challenge for any organization moving into programmatic is the CPM rate suppression it can create as your advertising space competes in a dynamic pricing environment.
The shift to programmatic may also influence a publisher’s long tail relationships. In direct and premium direct advertising models, the sales team acquires and nurtures relationships with the advertiser to ensure a continuing source of revenue. Programmatic removes many of the opportunities to build these personal relationships and makes the publisher much more dependent on mastering the impersonal programmatic pricing universe.
While you master the impersonal universe, advertising customers are becoming more demanding on where and when their ads display. Run of site, remnant inventory spots and off page display doesn’t work for them anymore. They want specificity, they want to target and they want you to demonstrate to them, via data, that you have met their performance goals and demonstrated ROI. ROI that comprises a few hundred specific target types, not a universe of anonymous traffic and clicks.
What Should You do?
If you take anything away from this article, please recognize the need to grow and mature the data you collect and manage to meet not only your advertisers needs but also your own. Today’s marketing, advertising and sales teams recognize the critical value of hyper-targeting and matching named users to products and services. Understanding interaction and behavioral data to generate leads and convert them to paying customers is also critical.
Demonstrating ROI on marketing spend is table stakes in a digital data-driven marketplace.
How 2040 Digital can help
2040 Digital works with organizations to help them diversify their revenue streams. Contact us to learn how we can help you achieve your goals and objectives.