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<\/p>\nIt seems that in recent times marketers hold digital advertising channels to a different standard than traditional media, such as radio, TV and print, despite a lack of confidence in return on investment. Digital channels are perceived as effective and invite more spending \u2013 even when that effectiveness cannot be readily verified. These are among the surprising conclusions from a survey of marketers at more than 360 brands and agencies around the globe, conducted by Nielsen.<\/p>\n
The study, carried out last year, examined how marketers perceive the effectiveness of digital and traditional channels, if their perception is driven by measurement data they can trust, and what ultimately influences budget decisions.<\/p>\n
Fielded from January to March 2019, it found that investments in media channels \u201care often driven by a sense of effectiveness that isn’t entirely grounded in reality, leading to wasted spend and missed opportunities,\u201d – a statement made by Nielsen.<\/p>\n
One of the top headlines is this: \u201cDigital media budgets follow perception, not reality.\u201d Nielsen\u2019s analysis found that novelty plays a \u201chuge role\u201d in marketers\u2019 confidence, and newer ad channels tend to get the benefit of the doubt -\u201ceven when measurement and a channel\u2019s perceived effectiveness aren\u2019t necessarily aligned.\u201d<\/p>\n
The study goes further, concluding that a digital channel perceived to be effective \u201cinvites more spending\u201d even when that effectiveness can\u2019t be readily verified. Nielsen calls this \u201ca scary proposition when millions of dollars could be at stake.\u201d Traditional channels, such as radio, TV and print, aren\u2019t afforded the same luxury as their digital competitors.<\/p>\n
For the study, Nielsen asked 247 brand executives and 116 agency executives to rate what they perceive to be the effectiveness of paid digital media channels for their business. Paid search, social media and the video category came in at the top of the list. But for all the other digital channels, less than half of all respondents consider them effective. \u201cThis isn\u2019t surprising for digital channels where advertising is a relatively new development,\u201d Nielsen notes, such as podcasts, streaming audio or native advertising.<\/p>\n
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Yet the perceived effectiveness of certain channels isn\u2019t necessarily tied to confidence marketers have in their ability to measure ROI, Nielsen says. For example, email is the digital channel that marketers have the most confidence in, with 67% of respondents being very confident that they know how to measure its ROI. It was followed by search (63%) and display (53%). \u201cThose results make sense, considering that those are the digital channels that have been around the longest,\u201d the report observes. Yet newer, sexier channels like social media and video don\u2019t fare as well as they did on the effectiveness scale. \u201cMarketers evidently have a lot of faith in these relatively new digital channels and tend to call them effective without being absolutely confident in their ability to measure ROI,\u201d Nielsen explains.<\/p>\n
When analyzing the correlation between a channel\u2019s perceived effectiveness and a marketer\u2019s decision to invest more money into it over the next 12 months, the researchers found that \u201cthey\u2019re willing to continue to invest in a digital channel even if that channel\u2019s performance is lackluster.\u201d<\/p>\n
And in a finding likely to resonate with ad sellers in radio, Nielsen found the story is \u201cvery different\u201d for traditional media. Radio, TV and print have been around much longer, and their effectiveness doesn\u2019t guarantee that their budgets will increase. \u201cConsciously or not, marketers seem to hold traditional channels to a higher standard,\u201d the report concludes.<\/p>\n
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The takeaway for marketers is that gut feel isn\u2019t good enough anymore. \u201cMarketers are seeking greater accountability in today’s increasingly omni-channel landscape, yet we learned through this study that their investments in media are often driven by perception versus reality,” said Matt Krepsik, Global Head of Analytics, Nielsen. “The good news is that the industry is working hard to bring credible measurement solutions to market, not just to make sense of newer digital channels, but to provide comparable metrics across all channels.<\/p>\n
Only then can marketers think holistically and make smarter investments across the entire customer journey.”<\/p>\n
The sample consists of 363 respondents, with nearly 80% of participants at the Director-level and above.<\/p>\n
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