April 6, 2011
By Augustine Fou
For a long while, agencies and advertisers alike differentiated between traditional advertising and “digital” advertising. And for a long time, “digital” had been the poor stepchild to above-the-line advertising, reaching barely 5 percent of the overall ad spend. But times and modern users have changed, significantly. So, it is also time to eliminate the distinction. Advertising is advertising and digital is advertising.
In fact, digital is the thread that ties all forms of advertising and marketing together. Study after study shows that consumers turn to their peers and experts as the most trusted sources of information. And advertising, all forms of it, rank among the lowest in terms of trust. Furthermore, “push” advertising, as it were, also ranks the lowest in usefulness and effectiveness. This is due to how modern consumers (users of information) have evolved and how their habits and expectations have become more sophisticated. Their time has shifted drastically to digital mediums and they have gotten really good at ignoring the constant din of advertising, some 3,000 ads per person per day according to some estimates.
So does this mean you should stop traditional advertising and do all digital advertising? No. But what it does mean is that you should make a conscious shift in allocation of dollars to digital and also use digital to make “traditional” better. In fact, if you truly take this approach, digital becomes a “philosophy” and its principles and insights should weave through all advertising to the point that there is no longer a distinction between traditional and digital – it is all advertising, infused and informed with digital insights, rooted in and extracted from the actions of your target consumers.
So what exactly does “digital as a philosophy” mean?
Digital Makes It Better
Traditional advertising channels are all on the “left side” of the “Grand Digital Canyon.” And they are all “push” advertising where advertisers send out a carefully pedicured (yes, I meant that) message to as many people as possible (i.e., “reach and frequency”) and the metrics have to do with how many people the ad was thrown out to. Digital advertising tactics and channels on the other hand are all on the “right side” of said canyon. And they are all forms of “pull” where the main measures of success have to do with consumer actions – from clicks to pageviews to searches. When you start to focus in on the actions of the target customer and less on how many of them you shouted at, good things start to happen.
For example, in addition to (or instead of) sitting 20 people down in a room with one-way mirrors, feeding them, and asking them leading questions, what about listening to 20,000 customers rave (or rant) about your products and services online? They are giving you fire-hydrants worth of feedback, so go drink from it. If you still want to do both, go right ahead; but please make sure that at least they corroborate each other. In another example, what if a creative agency took a dozen versions of creative and ran them as short videos on YouTube, looked at which ones were most viewed, most favorited, and most shared, and then took the top three to turn into TV ads? Well, to their credit, Intel and its agency did just that. Digital makes it better.
Digital Is the String That Runs Through It
Digital is also the “string” that runs through it or ties all forms of advertising together. Here’s what I mean. Whether modern users get inspired by a TV ad, print ad, radio ad, or even online ad, they will do some more research before they make the purchase. Obviously, the more complex the product and the higher the pricepoint, the more they will tend to do research to inform their purchase. Further, they will seek out objective reviews from peers (e.g., Amazon product reviews) or experts (e.g., David Pogue on electronic gadgets), etc. The question is, when they go online to look, will they find you and your information? And currently, the answer for many brands is still no. This is because in the transition to digital, most advertisers are still treating it as another channel through which to push ads, and not utilizing “digital” to its full and true potential. Digital tactics should not be neglected because they are the necessary “other half” to traditional advertising’s “first half.”
A way to gauge a brand’s presence in and use of digital channels is the Digital Footprint Score(tm) – which is a measure of a brand’s “digital footprint” across the dimensions of site, search, social, and mobile. (Disclosure: This is a metric published by my company.) The DFS Score is calculated from easy-to-understand parameters such as number of pages per visit (site), number of inbound links (search), or number of mentions (social). These parameters are also straightforward to impact – e.g., increasing the amount of high quality and relevant content will increase number of pages per visit, etc. So, unlike old scoring systems like Net Promoter Score (NPS) or eGRP, the DFS Score can be impacted directly and visibly in the short term.
Relative ROI Becomes Apparent and Transparent Through Digital
The last major implication of “digital” and how it unifies all forms of advertising across all channels is its ability to reveal relative ROI or effectiveness. Previously, it was impossible to compare effectiveness across channels because the metrics and the methodologies used to obtain them were not apples-to-apples. TV metrics from Nielsen could not be directly compared to radio metrics from Arbitron nor to “circ” (“circulation”) numbers from magazines or newspapers. These old metrics dealt with audience size, so “impact” was hard to gauge – and always had to be guesstimated. Digital metrics including click rates, lift in search volume, or website analytics have to do with direct and observable user actions. These are more direct and important to the calculation of ROI than the size of the audience to whom you threw your ads.
More specifically, if a TV ad drove the exact same lift in search volume as a social media campaign, but the TV ad cost millions to make and millions more to air while the social media campaign cost virtually nothing to produce and seed (people carried it forward to others), then which do you think had the better ROI? Lift in search volume is critical because it shows that not only did the user see the ad, but they also remembered it, and thought it important enough to take action – search for more information online right away. So even if you cannot calculate absolute ROI, you can for sure calculate relative ROI using actions detectable in “digital” – in the above example, lift in search volume.
So, for the first time, by focusing on the actions of the users, detected in digital channels, we can gauge relative effectiveness of ad spending across all channels. With this information, the marketing mix can be optimized, not just occasionally but continuously. And it will be readily apparent how advertising spending should be reallocated across all channels based on relative ROI.
So indeed, digital should no longer be just a small channel or a series of tactics. Digital makes all advertising better. Digital is the string that runs through it. Digital enables optimization of marketing mix and spend allocation. And digital should be the philosophy that informs and enhances all advertising because it is rooted in modern user actions, habits, and expectations.
Dr. Augustine Fou is Group Chief Digital Officer of Omnicom‘s Healthcare Consultancy Group (HCG). He has nearly 15 years of digital strategy consulting experience and is an expert in data mining, analytics, and consumer insights research, with specific knowledge in the consumer payments, packaged goods, food/beverage, retail/apparel, and healthcare sectors.
This column was originally published March 31, 2011 on ClickZ.com.
Tags: Net Promoter Score