It’s not hard to imagine how larger advertisers can quickly find themselves caught standing still in a rapidly evolving digital marketplace today. As new tracking technology allows for greater integration between channels, advertisers should be thinking about how they can change their approach to increase efficiency. As advertisers become more sophisticated, the pressure grows to edge out competition and dominate the digital marketing space. Advertisers are finding themselves trapped between growing local online media, traditional companies investing in digital media, new e-commerce sites, OTA’s, review aggregators, blogs and social networking sites now earning margins on their revenue. Some advertisers are not sure if they should even view these new channels as friends or foes but regardless of channel, advertisers want their media budgets to earn/buy the most media possible, generating the most return.
Evolution is at the forefront of our industry. It has been a founding principle since Gutenberg fired the last town crier. As media has developed, the evolutionary curve has shortened. It is seen more recently with TV budgets overtaking radio ad space, DVR changing the pricing structure of the broadcast, and most recently with the Internet transforming print media and how businesses engage with customers.
Fact: It was 700 years from the invention of print to the invention of radio and nearly 70 years from the invention of the radio to the invention of the Internet.
Considering how rapidly online marketing evolves, advertisers can take advantage of this evolution instead of falling victim to it. Sometimes to their own detriment, advertisers can find themselves following the standard procedure and allocating media spend without considering the efficiencies of flexibility. Here are two ways advertisers can help their own organization evolve within the digital space. By strategically allocating budgets and making them flexible, marketers can earn/buy the most media with every dollar.
1. Break Down the Walls – Clients must learn that departmental divisions and internal competition for budget isn’t healthy. In many circumstances, advertisers compete internally for the same advertising budget and are incentivized based on growing media spend, not efficiently spending it. Factors such as product quantity or historically offline performing categories may cause advertisers to unfairly distribute budget from the top down instead of the bottom up. In an ideal scenario, budgets should be increased departmentally based on efficiency and departments should not be constrained to budgets set in a prior year. Advertisers must look holistically at their business and work together interdepartmentally to not compete against each other, but to ensure the internal divisions/departments with the greatest ROAS are fully funded.
2. Allow for Flexible Budgets – As consumer behavior continues to advance, media spend will change . Advertisers should prepare to shift budgets between search engines, display networks, mobile networks, etc. This budget shift doesn’t stop at the publisher level, but should be considered internally as well. Advertisers can find themselves pressured internally to ‘’support’’ new efforts instead of allocating media funds to proven and more efficient channels. Some ways to evaluate your media budget are to compare the shift in ROAS by date, channel, search engine, SEO provider, etc. and overlay this against your business cycle/seasonality. Next, determine how accurate your digital tracked revenue is by channel and the actual ROAS for each channel; you will then be well on your way to providing flexible budgeting and growing your internal revenue with the same media spend.
Ways to analyze media spend
i. month to month
ii. channel to channel
iii. engine to engine
iv. network to network
v. division to division
At this point you might be thinking, “The big guys upstairs don’t like new ideas,” but I’ve discovered that the big guys upstairs always like ideas that are practical and generate revenue. Once advertisers make budgets more flexible and reallocate by performance, you will maximize your media dollars and increase your ROAS. It’s certainly easier said than done, however those who can will gain a competitive advantage over those who won’t.