After 20 years of dizzying digital growth in China, fluctuations in media habits of consumers and time spent on distribution have stabilised, giving us a chance to re-evaluate the effectiveness of both traditional and digital media. While the industry has long scrutinised traditional media performance, for the most part digital-media measurement still lacks standards and clarity. Confusion around adtech and measurement is pushing advertisers to focus on granular levels like cookie delivery rather than the fundamentals of media and marketing. With one of the world’s biggest advertisers, P&G, calling for marketers, agencies, and publishers to clean up their digital act, we need to reassess the way we invest in digital media and avoid the pitfalls of digital media.
Setting digital budgets in the new environment
- Don’t: Treat increasing digital spending as the default option
- Do: Allocate budget based on cross-comparison of media-consumption behaviour
Budget allocation should reflect the media behaviour of consumers. However, it seems for many marketers, increasing digital spending is their only option to grow their brands, and cutting digital budgets is unfathomable. Data should be the basis for making any budget decision. When data presents a new situation, brands should adjust their strategy accordingly. If a brand’s primary growth opportunity comes from tier-three cities, where their target audience spends more time on TV than on digital, the brand should increase its TV budget to capture these consumers.
With the majority of Chinese people deeply entrenched in the digital world, growth in digital reach and time spent is essentially slowing. As media habits stabilise, it is clear that digital growth will not always be an upward trajectory, and the death of traditional media has been prematurely called. In the future, a media mix of TV, OTV, and digital will remain essential for any brand to achieve mass reach.
Sorting through currency confusion
- Don’t: Use different currency for every channel
- Do: Explore KPIs that are comparable across media
Many clients still buy and plan media in siloes and focus on results delivered on individual media platforms. For example, CPC is used for measuring search performance, CPM and CPA are used on digital, and CPRP is used on TV. Though convenient, this approach is a pitfall that will deter advertisers from comparing performance across media and evaluating overall effectiveness.
Multi-screen and multi-media reach has been readily available in the market for at least five years, yet there is a reluctance to measure the success of media buys on a holistic level. The lack of understanding drives this reluctance; for many clients, there is a perceived lack of transparency in calculating and measuring mix reach.
As tracking providers increasingly adopt single-source panels to track media usage duplication, the multi-screen measurement gap between theory and reality may close. However, the confusion and chaos around measuring new technology and formats will continue. Until then, reach is still the most reliable means to compare the efficiency of multiple media.
Choosing a relevant measurement for brand growth
- Don’t: Use all measurements available in the market just because they exist
- Do: Use measurement that can be linked to your brand KPI
Inevitably, as more tracking vendors enter the market, new measurement currencies will come into play as they try to differentiate themselves. KPIs such as CPVM (cost per viewed thousand, which tracks viewable and fraud free impressions) and TA clickthrough rates aim to help us measure performance better.
While it is tempting for advertisers to explore all the currencies available in the market, it is more necessary to go back to the fundamentals of media and marketing by asking the question: which of these measurements are relevant to driving brand KPIs?
Answering this question is not easy and could vary by brand and by market strategy. Advertisers need first to identify the key brand KPIs that need improvement in their markets, then to explore the connection between measurements currently used and their brand KPIs. Only in this way can we navigate through the sea of measurement without being inundated.
Navigating the new video channel torrent
- Don’t: Be swayed by the hype of the new video formats, and invest in these channels by cutting budget from regular channels
- Do: Test and experiment with the new channels, while still using reach to evaluate overall media mix performance
The new formats and availability of video media are astounding. With OTT, livestreaming, VR, AR continually heralded as the future of communications advertisers can easily be swayed by the hype. Some brands have cut budgets from regular channels to invest in these shiny new platforms. Despite many of these channels commanding millions of eyeballs, most of them remain as high-cost engagement platforms and will continue to be so in the near future.
Livestreaming is disadvantaged by its inability to guarantee reach and control content quality. Livestreaming cannot become a mass channel until pre-rolls are placed in livestreaming feeds and can be bought programmatically. Furthermore, the nature of livestreaming means the quality of content cannot be controlled nor guaranteed, leading to a potential situation that could be an even more extreme version of brand safety issues plaguing YouTube, with brands unwittingly funding extremist and/or inappropriate video content.
OTT (Over-the-top) has the potential to evolve to become a mass-reach medium like OTV. However, with chaotic pricing models, nonstandardised inventory and lack of measurement, it remains as a test-and-learn channel.
New video formats allow brands to be innovative and engage with their consumers in a meaningful way. The age-old question is how much money should be diverted into these new formats and whether it can justify the sacrifice in mass reach. Brands should ensure they have minimum reach to ensure overall brand health before jumping into new formats.
Being smart on programmatic
- Don’t: Blindly invest in programmatic without knowing or evaluating the results of delivery
- Do: Brands with DMP should use Programmatic Direct model, otherwise go back to PMP, and use small budget to test which vendors are reliable
It is clear that programmatic has now passed its embryonic and extensive growth stage. We are heading into a year of validation and consolidation for programmatic buying.
More and more clients are now emphasising transparency in programmatic and moving to disclosed purchasing models. Furthermore, publishers are trying to cut out middlemen and pursue direct deals with clients. A fallout is unavoidable. There will be a consolidation of DSPs and SSPs, and while advertisers will end up having fewer partners, these will be better partners.
For brands that have their own DMP, the programmatic direct model is the best option that can ensure transparency, better inventory, brand safety and frequency capping at the same time. However, for most brands who do not have the capability to build their own DMP, they will benefit from going back to the PMP buying model. By testing with smaller budget on PMP and keep monitoring the results, brands will be able to identify the reliable partners and accumulate benchmark knowledge.
The media environment of 2017 is challenging but full of opportunities. By avoiding the pitfalls above, advertisers will be able to navigate more confidently through the complex digital landscape and make better decisions about adtech and measurement.
Rachel Fan is manager, business intelligence, with OMD China