Budgets not buckets: rethinking media spend

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Campaign Asia recently hosted a roundtable in partnership with MediaMath to discuss emerging channels in APAC, and how the industry is responding. 

“It was only 10 years ago that CMOs were saying ‘Ok, we need X million to reach this group’, then five years ago suddenly someone said we need to have an online and offline budget,” says Evgeni Atanasov, brand strategist at Bytedance. “These things are nonsense. Budget should be allocated to channels based on the incremental reach or the impact it will drive in the mix, not by looking at an isolated area and saying ‘For the next year we are going to put X amount of money into channel Z.”

Jasper Distel, group head of marketing at Go Jek agrees. “The discussion that a certain percent of budget should go into a certain bucket is nonsense. I’ve heard it so many times, ‘We spend 25% on digital’, well why? Just because it sounds good? What we need to do is spend our money where we know it drives business results. Regardless of channel".

So how widespread is this practice? Zachary King, VP commercial – Asia, MediaMath says it’s fairly prevalent. “The reality is that we see budgets in buckets. Quite often we work with a client to try and get some budget from another bucket, they’ll say: ‘That’s being spent on OOH, can I get it into here?’”

Budget to reach audience

Ben Wightman, head of data strategy, data analytics – APAC, Dentsu Aegis Network, says:
“If we're just looking at 'We want to acquire this audience', then there's no point in talking about budget silos like “traditional TV”, “digital” or “programmatic” to begin with, it’s budget to reach audience.

“So it’s not this budget, that budget – it’s a screen. I think until we can work with CMOs that think of it that way – and they're looking at the business benefit at the end of day anyway – that’s going to be a problem.”

Prior to his role as OMG’s chief investment officer for APAC, Paul Shepherd served as the group’s global VP, Platforms & Capabilities in New York. He says it can be different depending on what the channel is, but that a screen approach is emerging.

“If I have a look at what our strategy was around connected TV, the area that I controlled was the programmatic budget and I made a decision in one market that as connected TV started its drive that I believe connected TV drives greater attention compared to just a standard 15-second pre-roll on X.com.

“Why wouldn't I take my spend from 5% of my addressable budget to 20% of my addressable budget, but it had to be in my framework of fully curated, fully URL-transparent, and so on. That 20% is a fair budget compared to our overall TV – but it wasn't coming out of TV, it was coming out of the digital budget. Where that has now migrated to is a screen approach.”

Dipping into digital

However, having digital and non-digital buckets can provide flexibility according to Wightman. “Because all of these platforms are now moving to digital it means that it's easy for us to go to a client and say, “Hey this is digital. Your CMO, your CEO want you to spend more on digital so you can use connected TV”,” he says. “All these platforms moving into the connected space gives us a bit more flexibility with our clients to have them employ different techniques.”

But do we risk emptying the digital piggy bank? Lani Jamieson, head of programmatic at Cadreon, says it’s simply not effective to use digital and non-digital budgets.

“The reality is that the share of the digital budget is not increasing at the same rate as the fragmentation of everything else that we're trying to buy,” she says. “Also, the digital world is the one that is innovative, the one that's keen to test and learn new things and you have to do that with what you have. It's not like we get a much bigger pie in order to do that. There is an opportunity to move towards outcome-based buying and objectives.”

Paul Shepherd at OMG would also like to see that shift.

“We've got to change the conversation from cost to effectiveness. When you get to that point you can go screen agnostic. It's a vicious cycle right now where we commit to a number in a pitch and then we’ve got to do it or be penalised.

“It should come down to how many cars did we sell? How many extra sign ups did you get? Did we hit the right audience? That's what we should be talking about. And I think marketers want to get to there, but the world of procurement, marketing and I.T. need to all come together.”