Headline | October 21, 2015

Digital Marketing Magazine: Ever Decreasing Circles – Staying Ahead of the Competition in Performance Channels by Ian Thomson

digital marketing magazineOne general rule of digital performance marketing is that doing the same thing year on year means response rates and ROI invariably fall. There are lots of reasons for this decline.

First off, investment in digital acquisition is increasing markedly year on year as once-niche marketing channels become mainstream. This provides potential customers with more brand choices and generally causes increased price inflation.

At the same time, consumer understanding continues to evolve. Attitudes towards advertising are changing and people are becoming less tolerant of irrelevant messages. This is exacerbated when they are bombarded daily with high volumes of unsolicited, generic and ‘non-meaningful’ communication. The exponential growth in mobile ad-blocker downloads is a recent and obvious reaction to this.

One thing that remains constant is consumers’ desire to research and buy things. What has changed, however, is the way they now do these two tasks. The plethora of new devices and platforms from Mobile to Twitter to Instagram has revolutionised this part of the buying process. Clearly, brands need to invest considerable time and energy in really understanding their customers’ interaction with these different platforms. This will ensure that all the key customer touchpoints are covered correctly during their research and sales phases.

All this makes absolute sense but what doesn’t for me, is the heavy (often misguided) knee-jerk investment by some businesses in these perceived richer hunting grounds, purely out of a desire to counteract falling response rates in their more established marketing channels. These new opportunities offer higher response rates predominantly due to lower competition. But this uplift rarely lasts, and this improved response often doesn’t equate to better CPAs. Ads that are simply based on novelty and ‘stand out’ alone, even when run in a new and exciting marketing channel, have limited long term appeal to the general public. The old rules still apply.

In this situation therefore, businesses need to ask themselves two key questions. The first: Is constantly chasing new opportunities masking the real problem? The second: is reallocation of substantial budgets to emerging channels actually the most effective strategy for many brands?

A better solution may simply be to focus time and energy continuing to prioritise existing channels and listen to what consumers want, tailoring communication accordingly. This improved approach creates a more valuable experience by conveying engaging, relevant and useful information to customers. Improvements can quickly be made in a number of areas across Creative, Data & Technology and the reporting of performance activity that better reflects the changing role of communication within these channels.

Creative

Consider a move to larger, more immersive and / or useful advertising that provides tailored offers to specific customers and ensures appropriate frequency caps are in place. Wherever possible look to implement Dynamic Creative Optimization (DCO) as standard for greater message variation and relevance. Ultimately it’s about deciding which combination of messaging to serve to best ‘address people’s specific needs’ at that moment in time. Perhaps, in time, it could also be about breaking the mould completely to work with key publishers to radically redesign ad units to work better with customers’ changing needs; drawing on advances in voice search, app integration etc.

Data & Technology

The ability to leverage a wealth of 1st and 3rd Party data to better target and engage with multiple target audiences across Display, search and on-site has never been better, easier to integrate or more powerful. The customer clearly benefits from a far greater and consistent ‘rules based’ personalisation of messaging in environments they are responsive in and as long as any data costs are correctly evaluated, ROI should quickly improve. Additionally the widespread usage of Technology to prove visibility by the right set of human eyeballs will also do much to improve response and conversion rates.

Improved Reporting

Ensuring that our performance marketing efforts are correctly evaluated is vital in avoiding knee jerk reactions to falling headline response rates. We need to be able to see full attribution from each channel in real time. We need to move away from just reporting a snapshot in time, rather than embracing life time value. And we need to understand the impact of the whole marketing mix, rather than working in channel isolation.

Finally, by not following the herd and staying put, there could also be commercial benefits from lower competition, lower prices & reduced budget wastage from excessive testing. Of course, innovation and testing continues to be an important part of our armoury but don’t do it blindly or at large scale initially; rather progress in a calculated manner based on customer and competitor insight and, as Take That once famously sang, “Never forget where you’re coming from….”

By Ian Thomson, Head of Ecselis UK (part of Havas Media Group).

Published on Digital Marketing Magazine