Five Signs You Might Be Over-Invested in Digital Media

Some Advertisers Are Risking a Decrease in Their Return on Media Spend

By Published on .

Most Popular

This year, digital media spending is set to surpass TV spending in the U.S. The reasoning sounds like this: If audiences are going digital, so should advertisers. Of particular interest to advertisers, TV-related behaviors are migrating to digital channels. More consumers are watching videos through digital devices every year and TVs and set-top boxes are connecting to the internet. Many marketers are eagerly chasing their audiences and racing each other to digital video, further motivated by the relatively low cost.

While the flow of ad dollars from TV to digital will certainly continue, many advertisers may be reaching diminishing returns with digital advertising in terms of media budget allocation and impact. Some advertisers are actually risking a decrease in their return on media spend if they pull any further away from traditional channels, particularly TV.

The issue? Many marketers are choosing digital for the wrong reasons. They are either running away from traditional TV or toward something on digital that won't actually help improve key outcomes like sales and brand equity. Here are five reasons why as an advertiser, you might be over-invested in digital.

1. You're overcorrecting for audience trends. You might have a younger audience and are worried that they no longer watch TV, or you've heard that millennials are now the largest generation and are worried that you are too heavily invested in baby boomers. Nielsen's "Total Audience Report" released in March shows that consumers still watch lots of TV. How much TV millennials watch is dependent more on their life stage than on their actual age. Those that are starting a family -- which is the age group most important to many big advertisers, including car and CPG companies -- watch the most.

2. The price seems right. Perhaps your CFO thinks digital media is efficient, or your media buying team is getting a discount on digital impressions at massive scale on programmatic channels. While CPMs are cheap in digital, as advertisers are increasingly measuring outcomes along with inputs, many are seeing a better return on TV. Discovery Communications' CFO stated that ad dollars are moving back into traditional TV from digital due to better audience measurement outside of Nielsen on TV.

3. Digital data is enticing. Many advertisers focus too much on the mid-level metrics that are rife on digital channels and lose sight of the bottom-line return. From clickthrough rate to "last click" to engagement metrics, digital behaviors might be measurable, but that activity doesn't always equate to better sales or brand recognition. Advertisers are racing to embrace new digital metrics like viewability, which they see as being superior to less measurable TV ratings. However, a recent study by Integral Ad Science showed that even campaigns that are 100% viewable are not necessarily valuable.

4. You can't click-to-buy on TV. You worry that TV is losing effectiveness compared with more commerce-driven digital channels. In fact, TV advertising is gaining effectiveness. As consumers increase their use of multiple screens while watching TV, they can and do act on advertising messages they see on their TV more immediately, which actually improves the value of a TV ad. In the future, this might increase further as TVs become more interactive. A study by Millward Brown showed that interactive TV advertising was more effective than traditional TV advertising.

5. You're comparing apples with oranges. If you've separated digital attribution from media mix measurement, you might be using incompatible metrics to evaluate your different media buckets. It's common for each channel to have a business owner who concentrates on measuring the value of their own channel. Adding up the contribution of each channel often shows incremental sales that are much greater than in reality. In other words, each channel takes too much credit for its share. Many consumers also interact with advertising across many channels. This synergy between ads and channels is lost in a siloed measurement approach.

To ensure that you're allocating your media budget across channels effectively, it's important to align and integrate your business metrics so that everyone can objectively compare performance and understand cross-channel lift. TV isn't going away soon, and while the world is turning digital, advertising still works a lot better with a results-driven media allocation.