The latest survey from the World Federation of Advertisers (WFA) sent a little shiver down my spine when I read into the numbers.
Half (45%) of all marketers can’t clearly see the value that digital advertising brings them, 62% are dissatisfied with the measurement standards, 75% aren’t convinced of its effectiveness but are willing to go with it. Two-thirds also think marketers have over invested in digital.
Pretty damning observations so far. And yet two thirds still plan to plough more of their dollars into digital channels and increase spend. Some by as much as 40%.
I had to do a double take. That is shocking. If you’re not sure something is effective what is the logic behind spending more?
I’m by no means anti-digital, and not suggesting that marketers cease spending in digital channels and go cold turkey. I believe it does play a role, and offer brands value. There is truth to brands being where their customers are, and that is on social and digital channels.
I also think there is a need to try out new things that are often unproven. There’s a need to take a risk, experiment and test things even if you don't know what return they will drive. But considering the current rhetoric around the lack of faith in digital metrics, Facebook’s admissions that some of the numbers it was reporting were incorrect by a wide margin, the need for every dollar spent to be accounted for and delivering return, I find the WFA report mind-boggling.
The report shows clear concerns over the effectiveness of digital channels and the transparency of metrics or trading and yet 90% of marketers are planning to spend more on digital video. But what about the damaging impact of content appearing against unsafe content? What about the over-inflated metrics that Facebook was reporting around video? While Facebook maintains that where it was incorrectly reporting metrics (in some instances as much as 80%) they weren’t metrics that were directly billed, so the impact on spend decisions is minimal - I disagree.
The impact was to present a much stronger picture of what video can deliver than the real numbers offer, serving to confuse marketers and made a case for video's strength that wasn't based on the correct facts.
It's not surprising that advertisers want a better understanding of what digital contributes to their business and its effectiveness - but by continuing to spend without getting that clarity, how will they demand more or better?
Likewise if advertisers aren't convinced of the current measurement standards, continuing to increase spend doesn't send that message. There’s a dislocation between what's being said and what’s being done.
The survey was conducted on behalf of the WFA by Ebiquity and presented at World Advertising Week in Toronto, Canada, last week. It's a gathering of some of the world's biggest advertisers and represents US$80 billion of global ad spend. It’s a fairly weighty group so it is disheartening to see numbers that show blind acceptance of digital channels.
If there was ever a case for why more marketers should at least consider zero-based marketing strategy - this is it. Zero-based doesn't mean cutting budgets, it means each channel and activity is evaluated before being allocated a budget each year, rather than automatically putting budget behind channels whether they have delivered or not. It seems logical that marketers would want to seek clarity where it is lacking.
Recently at an AANA event exploring issues of transparency within the market, its CEO Sunita Gloster read out a number of verbatim quotes from her members (predominantly senior marketers at Australia's largest advertisers) that revealed a lack of knowledge, a distrust of metrics and numbers and a lack of confidence across the digital ecosystem.
Some suggested that publishing the quotes showed a level of sensationalism from us as the trade press wanting to stir up how bad this issue really is. I disagree. The very fact marketers are making these admissions is the sensation in itself.
But those admissions show a level of awareness that marketers in Australia realise there are shortcomings within this highly complex system and are ready to tackle those gaps in knowledge, address the issues and come good.
As they say, admitting there is a problem is the first step to finding a solution, so those quotes are a constructive step to tackling some of the problems across the industry. I would hope that over time they convert into marketers taking a different course of action, further scrutiny of channels and better equipt marketers who get the best out of their marketing activity.
But the recent World Federation of Advertisers research doesn't fill me with confidence that will happen any time soon.
You can check out Professor Mark Ritson’s all-new presentation ‘The Nine Circles of Digital Hell’ only at the Marketing + Media Summit on May 12. Tickets are selling fast so make sure you get one today. There’s a discount if you buy five or more tickets. Get tickets here.