Marketing budgets have always been subject to scrutiny, but the arrival of the pandemic and its presence almost two years later continues to spotlight the need for efficient and effective spending. That, in turn, has intensified the importance of accurate and holistic measurement, especially as brands increase their usage of new platforms and channels for their marketing efforts.
In addition to navigating new platforms and channels, marketers have notably increased their spending this year, mostly across mass reach channels (after a pullback during the first half of 2020). That spending aligns with sentiment from marketers surveyed for Nielsen’s 2021 Annual Marketing Report who cited customer acquisition and brand awareness as their top priorities. In retail for example, brands began significantly amplifying their ad spending last October.
As spending increases, so does the focus on tracking ROI. And unlike digital, conversion-oriented marketing efforts, which can be measured with modern martech solutions, mass reach efforts are often viewed by marketers as more challenging to correlate with actual long-term sales. And while Nielsen’s experience base shows that on average, a 1-point gain in brand metrics such as awareness and consideration drives a 1% increase in sales, marketers surveyed for our annual marketing report aren’t confident in their existing marketing technology. Across brands with small, medium and large budgets, confidence in existing martech averages 16.7%. Importantly, the introduction of new platforms, devices and channels—along with enhanced privacy considerations and the depreciation of third-party identifiers—increases the complexity that martech solutions need to account for.
As complexity rises, Nielsen believes brands should focus on three pillars:
- Trust: Measurement that is from an independent third party (not a media seller) and funded by the advertiser (lending full transparency to the advertiser directly) is critical.
- Comparability: For the largest components of a media budget, brands need to be able to accurately compare channels with consistent methodology to facilitate a clear understanding of relative performance.
- Adaptability: For the largest components of a media budget, brands need to move from measuring what happened at the executed level—to what could be achieved. This will help brands improve instead of simply validating that marketing strategies are working sufficiently. For the smaller components of media budget, brands will need a way to test and learn to ensure that successes can be scaled and investments in shortcomings can be appropriately limited.
Measurement is relative to objective. So, there is no one-size-fits-all measurement solution. As media options multiply, so do martech solutions, potentially adding more confusion than clarity. Across the realm of measurement capabilities, marketers tell us they’re least confident with measuring awareness, full-funnel ROI and multi-touch attribution (MTA).
Following on the three pillars for success, marketers should leverage solutions that facilitate de-duplicated measurement across all channels—including digital channels that are less open (e.g., walled gardens)—and yield comparable metrics.
Further, they should ensure that solutions allow them to remix their investments instead of validating that some channels are working and providing lift. For example, averaged data from Nielsen Total Media Resonance shows that the channel that gets the most investment will produce the highest lift approximately 70% of the time. At the same time, there is a limit to which that channel will continue providing lift. Only 4% of the time is it the best channel to continue investing in.
Marketers’ lack of confidence in full-funnel ROI measurement isn’t surprising, given that standard solutions do not account for upper- and lower-funnel marketing efforts in the same solution. Following on the pillars of comparability and adaptability, marketers should embrace the duality of needing near-term sales AND brand awareness.
To address this duality, we believe marketers have two immediately identifiable solutions: run MMM studies for both short- and long-term ROI; and/or perform sequential optimization. For MTA, the other top challenge, marketers should be ensuring that their attribution solutions carefully consider the full consumer journey instead of looking only to the first or last point. And pulling from the adaptability principle, marketers need to continually re-evaluate their MTA platforms to ensure they’re responsive to the prevailing trends in the market with respect to data availability.
As with most marketing challenges, measurement becomes much more manageable with data;data that’s holistic, allows for comparability and is adaptable to evolutions in the industry—including those pertaining to privacy and platform proliferation.