Tuesday, May 19, 2009

Digital Advertising Media and Traditional Advertising Media: Will it Blend?

Digital media and traditional media are at a crossroads -- and when it comes to research and measurement, marketers are having difficulty knowing which way to turn. Since the dawn of the TV-era, countless dollars have been spent developing data-capture and analytics tools. But, the TV-centric model of measurement is obsolete. Media channel crossover is becoming more complex: television ads are linked to product Web sites, product Web sites lead to social media sites, and social media sites connect users with other users who are talking to each other about the product. Consumers are engaged with multiple channels simultaneously.

The old marketing and research models that assume media channels are independent of one another are simply no longer working. Without good models and tools, marketers risk making bad allocation decisions potentially sending millions of dollars into less productive channels.

As more digital channels develop, marketers must be able to account for crossover, interaction, mixing and the overall complexity of media in the digital age. Research must also take into account the influence peers have on each other and the marketing ramifications of social influence. This is easier said than done, of course. But let's take a look at how we can bring media mix models and measurement into the digital and social media age.

Marketing Mixology
Traditional media mix models tend to fail when digital is factored in. In fact, at many companies digital still isn't part of their core models. When digital is included, inputs simply don't match outputs. For example, a CPG company spending $50 million on TV and $2 million on digital advertising has a model that says digital is responsible for 40% of sales with TV responsible for only 3%. These results for digital are " too good to be true." Digital advertising alone is clearly not responsible for driving 40% of sales when its budget is barely a blip compared to TV. Conversely, there are models where results are " too bad to be true." So, why the variable? The traditional model treats each medium as independent, which doesn't work when digital crossover blurs the media lines.

The root of the problem is that consumers are receiving messages through numerous media touch-points but research models aren't accounting for this, and are only giving conversion credit to one medium. That is, an ad on TV may drive a person to that product's Web site or to search for that product online. Once he does a search or lands on the site, he is more likely to be targeted with digital display ads for that product or related products because the way he interacts with media determines how advertisers reach him.

This kind of crossover creates a real headache for marketers trying to measure the effectiveness of each media channel. Take the Super Bowl ads for example. Some advertisers look at the increase in number of online searches to show that a TV spot was effective. Here, search behavior is the output of the model. So, which is it? Is digital media one of the inputs (as a paid media channel), one of the outputs (as a response to other media) or both?

To bring old research and measurement models into the digital era, they are going to need a major makeover--but what does this new model look like? How do the various digital channels interact with each other, with traditional media channels, and with consumers?

Moreover, a huge part of digital media is now social, where consumers are taking social influence online, which creates a whole new layer for marketers.

A Model Based on Social Influence
One key element that the old methods of research do not take into account is consumer influence. That is, how consumers are affecting each other -- and through what channels. To fix this issue, it is important that modelers take into account a person's " social graph" as part of the model of measurement in order to be relevant in today's more social society. A social graph represents a person's social network -- those whom they influence, and those who they are influenced by (ranging from personal contacts to product reviewers online).

To bring the models up to speed, marketers must take into consideration that consumers are influencing each other in totally new and different ways -- through digital -- and these interactions are not only causing flaws in media mix measurement, but also flaws in conclusions about consumer behavior. Modelers must develop new models that incorporate all causal relationships of digital media. And after delivery of the model, it should be standard procedure to validate the model.

The Measure of a Plan
In order to better understand consumer behavior, researchers must account for a consumer's social graph and look at both digital and non-digital social networks.
Agencies must continue to innovate to develop more powerful measurement tools, whether that is a tag that can track a single consumer's behavior across channels or a holistic solution that displays all marketing in one place, along with easy-to-understand graphics and actionable insights.

This will allow for a better understanding of where your consumers fit into your marketing programs. The more research that agencies do to better understand how consumers interact with each other and with media, the better they will be at incorporating digital into the media mix model.

This originally appeared in Dave's monthly column in Chief Marketer.

Tuesday, April 28, 2009

Mobile Marketing Makes Its Move

Marketers, take note: 2009 is the year of mobile. Well, maybe. The industry has been saying that for years. But with the swift advances in technology this year, brands and advertisers don't want to bypass mobile in their media mix any longer.
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In 2008, we saw a notable change in how consumers interact with mobile technology. They have made the transition from using mobile devices only for voice communication and text messaging, to relying on their mobile for Web browsing, search, shopping, travel directions, gaming and more – creating a greater and ever-expanding market for advertising dollars.

According to comScore's M:Metrics, mobile browsing grew from 13% to 20% of all U.S.-based mobile users from Q1 2008 to Q1 2009. Razorfish predicts that this trend is only going to increase in 2009, as services and platforms become more advanced (think: your phone is your GPS and your barcode scanner and your nurse and your…). What will these new developments mean for marketers as we try to keep up in the digital whirlwind? And more importantly: how can we add value to our customer's lives through this medium? Let's take a look.

Mobile – and Brands – Are Getting Smarter
More and more brands are starting to catch on to the value of mobile. It is important that brands keep their tactics fresh without losing their brand message: enter the mobile phone application, now the backbone for many mobile phone users. The iPhone App Store alone is offering more than 25,000 applications, and users have downloaded more than 500 million applications. Add to that the expansion of mobile applications designed for Blackberry, Google, and Microsoft platforms, and you witness a significant uptick in third party application development extending mobile applications well beyond the iPhone.
Let's take a look at a few examples of mobile applications that are really turning consumers on – and that have plenty of room for development in the coming year.

Travel and GPS
Wikitude Augmented Reality Travel Guide (on Android G1): Users can search 350,000 points of interest. When a landmark is viewed through the camera, annotations from Wikipedia are overlaid on the landscape image. Sekai Camera on the iPhone is similar, but allows users to tag the real world anywhere and in real time, so they are not limited to data from one source. This technology should be expanding greatly this year. However, a looming question remains: who will have control over the tags – users, brands, reference Web sites or a combination?

Shop Savvy (on Android G1): This shopper-friendly application turns your phone camera into a bar code scanner and provides price comparisons from other nearby stores as well as e-commerce sites. This technology has huge implications as it could potentially revolutionize the retail industry by blurring the line between brick and mortar stores and online retail. And it seems likely that by the time 2009 is over, there will be some form of image recognition functionality that performs a similar task without the need for a bar code.

Mint (on iPhone): This application takes all the helpful elements of mint.com, a comprehensive financial budgeting and monitoring service, and puts it into the palm of your hand. The average American uses 11 different financial institutions, and Mint offers tools for tracking, budgeting and managing all finances from registered accounts in various institutions all in one place, making it more streamlined — and definitely more convenient — for the digital consumer. However, it may be a threat to financial institution retention rates as branded financial institution applications may not be able to match the value of Mint's aggregated information and personalized discount offers.

Mobile Marketing and Significance
Truth be told, the digital consumer is spoiled and has some seriously high expectations for their level of mobile interaction (read: instant information access). They expect that major brands should be there whenever and however they want to access them. The smarter mobile technology gets, the more the consumer will want and expect. Applications like those above not only provide convenience, but also create more relevant and intelligent content, which marketers will need to leverage to keep their brands moving forward and monetize on this platform.

Additionally, the expansion of capabilities within mobile media directly correlates to advertising opportunities,. We predict that mobile advertising, which includes mobile messaging, display and search advertising, will become a larger part of clients' budgets. In fact, the U.S. mobile advertising market is predicted to grow at exponential rates, from $805 million in 2007 to $3.6 billion by 2010, according to like estimates by eMarketer and Nielsen Mobile.

As the mobile channel evolves, marketers who build user-focused mobile programs and ads will be able to transparently serve the consumer. But to achieve success, the mobile Web experience must be a match to the stationary Web experience and must meet all of the consumer's needs and demands. In other words, brands must be consistent with their messages while enhancing the consumer experience. Not easy – but necessary for success.

In order to meet this tall demand, mobile has to position itself as one of the many parts of an integrated, unified marketing program – not as a separate leg, piece, or component of a marketing campaign. Mobile is no longer a "nice to have;" it is a must-have for your digital marketing mix.

This originally appeared in Dave's monthly column in Chief Marketer.