At the end of the 19th century, department store owner and marketing pioneer, John Wanamaker, famously said “half of the money I spend on advertising is wasted.” It’s a phrase that has been repeated throughout history and over a century later, marketers are still losing significant amounts of money on unsuccessful campaigns.
In fact, marketers believe that nearly 30% of their marketing budgets are wasted due to poor strategic planning, incorrect channel focus and fraud. That’s certainly an improvement on the infamous 50% quote from Wanamaker. However, when you think how far technology has advanced since his proclamation, that’s still a frighteningly high percentage of money being thrown away.
Earlier this year consumer goods manufacturer P&G announced a slash in digital ad waste by $200m, showing there has been progress towards identifying and reducing wasteful marketing spend. However, when you look at the numbers there’s still a lot of work to do in eliminating it all together. In 2017, in the UK alone, £750m was wasted on mobile ads which were not seen by consumers.
With marketing budgets under more and more pressure in today’s fast-paced and channel rich sector, the need to stamp out waste has never been greater.
Measure your metrics, measure your success
Given that marketers think they’re wasting nearly a third of their budgets, it’s not surprising that over 40% are also worried about proving the value of their activity. Some say marketing is an art, but it’s also very much a science. This is where accurate measurement comes into play. Marketers measure to understand where to prioritise their spending, whether it’s investing more or less on a certain activity. Everything is measurable to some extent but metrics become much harder to evaluate when measured in silos.
Smart marketers will know that stopping ‘spray and pray’ – aimless spending in the hope of striking gold – is critical to reducing their budget waste. Marketing that isn’t measured and isn’t attributed is at high risk of duplication, waste, and general sub-optimal performance. Not only this, but without measurement detection, and subsequent prevention, of fraud becomes significantly trickier.
We’re already at a point where only one in 10 marketers have a marketing system of record. That means the other nine out of 10 cannot consistently measure their customers’ cross-device activity, even though technology exists that makes doing so possible. If you can’t properly measure what your money is doing for you, then you’re wasting it. It’s as simple as that.
Make your money mobile
Mobile is the hub of digital marketing today. More than just a platform, it’s something you’ll definitely want to be keeping around. We’ve heard it all before about how vital online and mobile are to marketing success, and yet so many companies don’t make it a priority. Researchers suggest that mobile and online advertising spend will top £165 billion in 2018, and will overtake traditional spend, either this year or very soon thereafter. Mobile is where it’s at, today and for the foreseeable future. Your budget should be moving towards digital and mobile advertising not just because you can get the most specific, targeted and measurable results, but simply because it’s where your customers are.
While digital methods and metrics are easier to analyse, they’re also more vulnerable to fraudsters. A major topic for marketers last year was ad fraud, and prioritising measurable mobile activity comes with the caveat that you need to be monitoring for the types of ad fraud that cost the industry £11 billion in 2017. To put that into context, that equates to roughly 10% of every pound spent on mobile ads. It’s a problem that can affect any marketer, or any user. Awareness of fraud is on the rise, and solutions are being put in place, but it’s something that should be at the forefront of your mind when planning your mobile strategy.
An over-the-top future
Looking a little further ahead is also never a bad idea when planning your budgets. OTT platforms and voice-enabled devices are innovating how marketers reach audiences. It’s still relatively early days for the likes of Alexa, the FireTV, Google Home, and the rest, but these devices will continue to unlock broader channels for marketers to explore. This year we’ll see streaming video and voice technology explode in popularity, resulting in more marketing opportunities.
Voice will likely develop slower this year, because the economic potential of the technology hasn’t fully materialised within the ecommerce sector yet in the same way OTT has. However, marketers with the foresight to invest in understanding the consumer experience of these devices now will undoubtedly benefit in the long-run.
Admittedly, OTT and voice shouldn’t carry as much weight in terms of investment as mobile. Measurable, fraud-fighting mobile and online channels are still the key, but it won’t be long before OTT is near the top of everyone’s agenda, so it’s worth thinking about and being prepared.
Maximising every penny of your budget is a nigh-on impossible task but wasting 30% of it each year is a recipe for disaster. Marketers that prioritise measurable channels where their customers spend time will succeed. Marketers that can do that, as well as preparing for the content channels of the future will not only succeed but thrive.