The Truth About What Works in Digital Marketing
Does digital media deliver a better return on investment than TV?
Patti Wakeling, global director-media insights at Unilever, neatly sidestepped that query put to her by a Coca-Cola exec during a presentation before the Advertising Research Foundation in March.
It is a good question, but here's an even better one: Does it sell soap at all? That head-scratcher is cropping up more often from major and minor players in packaged goods, a category accustomed to measuring marketing success not by conversation, community-building, virtual transactions or sales leads but by precisely how many packages of Dove went from shelves to shopping carts at Piggly Wiggly.
The answer is yes, but it's taken a long time to divine it.
In 1994, Ed Artzt, who was then CEO of the world's-biggest ad spender, Procter & Gamble Co., called for ad agencies to board the interactive train or be left in the dust. It sounded an alarm. Eighteen years later, it seems P&G and its competitors have hit the snooze button a million times (roughly all the nine-minute intervals from then to now). By the most generous estimates, the all-in costs of digital make up around 10% of P&G's U.S. marketing outlay and a similar share for P&G's big global rivals, Unilever and L'Oréal -- Nos. 2 and 3 in global ad spending, respectively. Digital has its place for them, behind TV and magazines.
It would be easy to look at this and conclude that digital will never play a central role for consumer packaged goods, and that the industry's data-driven executives must have caught on to the fact that digital just doesn't work that well for them, despite much talk of late about how efficient it is .
But the reality is far more complex. Several studies suggest digital sells as well or better than TV for CPG brands. Despite the slow uptake through nearly two decades of hype , packaged goods may now be on the upward slope of a hyperbolic adoption curve, since digital as a percentage of marketing spend has doubled or tripled at P&G, Unilever and L'Oréal over the past few years. Moreover, digital media appears on the brink of some measurement breakthroughs that could have huge ramifications for data-driven CPG marketers. That data revolution, however, is proceeding on separate tracks with vastly different implications for how digital will be used. On one of those tracks, Nielsen and ComScore have each been developing online gross-ratings -point systems (GRPs) that measure digital display and video audiences using the same age-sex demographics as TV. By putting digital on a measurement playing field similar to TV -- some might say just as bad as TV, thanks to its lack of behavioral targeting or indication of sales response -- these tools allow digital to be evaluated the same way as TV, using tools like marketing-mix modeling.
A third way of using digital -- to build advocacy or reach consumers at the moment of consideration through search rather than as an awareness builder -- is also taking hold among CPG marketers. But large-scale research into the ROI of these often-social-media approaches isn't widely available.
Detailed multibrand studies of ROI for social media and social-media advertising are still scarce, in part because spending is low and effects occur over a more extended period than with traditional media advertising, so it's even harder to measure a sales response. Online GRPs by their nature tend to treat digital like TV and as a reach extender for TV plans -- a role it clearly already plays.
Digital "allows us to bring additional reach with a nice combination between traditional TV and digital," said Marc Menesguen, managing director-strategic marketing for L'Oréal. "For the same budget, we can increase the reach of our campaign."
While that 's only one among hundreds of brands and categories in CPG, that suggests spending -- and spending big on digital -- can indeed sell soap.