Two large Australian companies are planning to scale up the role and invesment in mobile advertising after a study found that mobile advertising plays a far greater role in discovery and digital media conversion than previously thought.
The study, commissioned by Facebook and carried out by Datalicious, found that mobile advertising drives 52% of digital media conversions despite only accounting for an average of 27% of digital ad budgets.
The research assessed digital search, display and social media touchpoints of customers for Telstra, Foxtel and Medibank, disregarding the impact of offline channels like TV, print, radio and outdoor.
The findings have already had an impact on Foxtel and Medibank, with the former looking to elevate the role and importance of mobile advertising at the forefront of creative rather than as an afterthought of TV advertising.
This is significant for several reasons. Firstly, Foxtel is part-owned by News Corp, which is battling with dominant global digital media giants Facebook and Google for a slice of advertising pie.
It's also interesting a traditional media company is reconsidering the role of traditional media advertising, even if Foxtel primarily runs a subscription-based model.
There's also a race for digital media companies to find a modelling solution (Google recently launched something similar) that considers cross-channel, cross-device attribution – long considered the holy grail for marketers.
'Flipping' creative to digital-first
Foxtel director of marketing operations and media Justin Robinson tells AdNews the study has changed his perception of mobile in the marketing and sales funnel and has allowed his team to challenge media agency partners on assumptions about the customer journey.
“It makes me question the value of some of those desktop based brand placements that are quite broad in reach – such as a homepage takeover on one of the main masthead websites,” Robinson said. “It has also given us better clarity around where we are spending our money, the ROI of each channel.
“Instead of the typical creative or media brief where we start with the script in the TVC, which is often the way it works, we flip it on its head now and start with the digital plan because it's more targeted and we understand the ROI better and build it out from there.
“So what's the role of broad reaching media like outdoor or television? It will sometimes come last in the plan perhaps.”
Robinson said Foxtel is “already making changes around the way we build creative and have that digital-first thinking in how we build our plans”.
This includes an internal social media production desk that will begin work in July, which places a greater focus on social media channel.
Foxtel manages digital media buying in-house and uses Mindshare for traditional media channels.
For Medibank, whose media agency is Carat, the study provides it with more data to justify greater investments in mobile and social media rather than relying on last click or cookie-based data.
“Although we do our journey maps and we do understand the process that people are going on it's really hard to make sure we've got the right investment. With last click...the pressure I to go where the sales are coming from,” Medibank head of acquisition marketing Rene Rached tells AdNews.
“What this does is give us further data to push ahead and actually invest more (in mobile) and test more and be confident to know through that mobile and social investment we will have a huge influence on an outcome.”
Rached said the data will allow Medibank to shift “a lot more money” back into the mobile advertising, particularly for the discovery phase of the marketing funnel.
The findings: mobile investment undercooked
Facebook commissioned the research and provided its own Atlas tags to Datalicious, which then used its own tags to analyse how different touchpoints affect the path to conversion.
It analysed the customer journeys of three companies – Medibank, Foxtel and Telstra – syncing touchpoint data with Facebook user IDs, which means the results are based the activity of individual (anonymous) people rather than cookie trails.
It used data from more than 1 billion media touch points, 80 million purchase paths and more than one million conversions.
“The biggest surprise for us is that on average there was three cookies for one person. If your using traditional measurement, either last click or cookie-based attribution, you'd be missing out on the bigger picture because only one of those cookies would be credited with conversion,” explains Datalicious general manager of business development Andrew Newell.
According to the study, there were 22 paid touchpoints prior to a conversion when looking at people-based measurement rather than 16 paid touchpoints for cookie-based measurement, which means the cookies approach was only accounting 73% of digital touchpoints.
The study found that mobile advertising drives 52% of digital media conversions, which is nearly 1.8 times increase in the conversion credit given to mobile when a cookie-based methodology is used. The study said that mobile only accounted for 27% of the total digital advertising budget.
Is the study self-serving?
A weakness of the study is that it only considers digital touch points (search, display and social) and does not consider the influence of offline media in the marketing funnel, which usually has an influence higher up the funnel in the awareness and consideration phase.
Facebook's head of marketing science Steven Lockwood tells AdNews the social media company commissioned the research to help advertisers better understand how to measure digital effectiveness across different platforms and devices, which is why they have used Facebook IDs to track touchpoints to actual people rather than cookie trails.
AdNews asks Lockwood whether the findings of this study are somewhat self-serving for a media platform that is increasingly focused on mobile.
“It's very important we had the independent verification for this, which is why committed to a lengthy contractual process to allow Datalicious to work on using Facebook identity,” Lockwood says.
“I don't see it as self serving. We believe in the credibility of the methodology. It is digital only but there's technical reasons why that is the case.”
When asked whether Facebook intended to broaden the scope of the research to include offline channels, Lookwood said the study was only a starting point and an attempt to encourage the market to think about people-based measurement. Lockwood says.
“We're big advocates of measuring the actions of people and business outcomes rather than what you could view as proxy metrics,” he says.
“We're always open to working with the broader part of the [media] ecosystem to help bring that [traditional and digital] connection together. It's not technically possible in a lot of ways with a lot of traditional media right now, but that doesn't mean it's not going to available soon.”
Lockwood said Facebook had tried to broaden “partnerships” with traditional media industries but hadn't “made as much progress as we'd like to”.
“There's not been as much enthusiasm in some parts of the industry to work collaboratively in this,” Lockwood adds.
AdNews hasn't been able to verify claims that traditional media owners are pushing back on collaborative research, but the social media company has a track record of preventing independent third party scrutiny of its data.
Media agencies and verification companies have called on Facebook to allow the use VAST or Vpaid ad tags to track deeper metrics on the platform, but have so far been rebuffed on privacy grounds.
This study provides food for thought on digital marketing effectiveness and it is significant two large Australian companies are evolving media planning as a result.
Whether this research and new approach to measurement has a broader impact on the market could depend on whether Facebook allows greater independent scrutiny of its own platform.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.