5 Steps to Digital Success
By Raymond Reid (CEO) | April 15, 2019 | Insights
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Digital advertising is incredibly complex and is dependent upon far too many variables to simply identify 5 ‘musts’ to achieve success across all the various permutations of advertiser campaigns. So the following 5 steps, (and there are far more than five but we’ll start with a manageable number for now), to achieving success in digital are more representative of strategic components that should be thought through prior to the development of a tactical campaign plan that if addressed early on will help lay the foundation for success.
01
KPI’s
One of the strengths of digital, along with one of its weaknesses, is its ability to measure everything. One of the downsides to that is that measurement of the wrong things leads to confusion and the assessment of metrics that yield little value for advertisers. No single metric is more representative of this than the wrong-headed approach to measuring digital than that cockroach that simply will not die, the dreaded Click-Through-Rate (CTR). Advertisers across the digital universe are still being presented with campaign reports in which the primary metrics of success are Impressions and click-through-rates. These metrics yield little value as it is expected that the impressions purchased are delivered as well as that a few people, and many bots (more details into bots), will click on them. But the fact that clicks are registered should not be a barometer of success as the average CTR is approximately 0.15% (source: richmediagallery.com), and if that were the primary metric then no one should be using digital for advertising. Two of the most valuable metrics that represent substantially more valuable insights than impressions and click-through-rates are Cost-Per-Acqusition (CPA) and/or Cost-Per-Conversion, assuming that proper tracking has been implement to identify and measure conversion points. Both these metrics offer an advertiser the ability to quantify based upon internal customer data how much they are willing to pay to acquire a customer or convert a prospect. If these metrics are not being evaluated as apart of your digital measurement KPI’s then your digital investments are not working as hard as they could or should be.
02
Insights, Not Reports
As mentioned previously, there is a tsunami of data available to be measured via every digital campaign that can make it very difficult to understand exactly what is material and valuable that can be actioned for the benefit of an advertiser from their digital investments. There is an old phrase that is well-practiced in the digital advertising industry that simply states, ‘Blind them with Bulls*t’. The volume of digital data available to push in front of advertisers plays very well to this axiom. At the end of the day what all advertisers want to know is the answer to a very simple question, ‘So what does this mean?’. Every advertiser should ask this question to every data point, slide, or metric presented to them. Whatever form data is presented in whether it be spreadsheets, dashboards, or presentations should immediately be followed up by a simple statement that answers the question ‘So What?’. But the answer should go beyond what that means for the campaign: what does this mean for the business, audience, product or communication messaging, and then also be followed up with an actionable recommendation that is built upon the answer to that question. Should your creative change to more visually represent the audience that is engaging with the ads? Should the conversion path be reduced to two steps because 86% of visitors do not convert after the second in the process? Demand insights that identify actionable steps to be taken rather than settle for simple reports with lots of graphs and lines.
03
Creative Matters
One of the most often overlooked aspects of digital advertising is that do it properly, across multiple platforms, combined with creative refreshes, and retargeting requirements, you require a lot of creatives. Many advertisers are still spending two to three times more in creative development than they spend in media and then as a result underspend in the production of the quantity of creatives required to be successful in digital. As a result of more and more proprietary platforms today, an advertiser has to think about producing creative ad units far beyond the standard IAB 3 ad sizes if they wish to engage across mobile, social, and standard display and programmatic. To properly engage in digital, taking into account the multiple platforms, creative refreshes, custom ad formats for mobile and social, as well as retargeting, a single campaign may require more than 4O individual pieces of creative. The creation of this many pieces of creative for a single campaign based upon the present creative agency engagement model can be prohibitively expensive if not strategically planned. To overcome this, an advertiser will need to drive the process and ensure that both the media and creative agencies are briefed simultaneously, blasphemy I know, so that a strategy is developed that takes into account the execution requirements of a great creative idea.
04
Margin & Fee Transparency
Digital advertising is fraught with opaque costs that make it almost impossible for an advertiser to acquire a true understanding of their return on marketing investment (ROMI). The simple truth is that each provider involved in the execution of a digital campaign reduces the investment available to reach the desired target audiences. (more detail why; perhaps a visual representation of mark-ups at every stage) So it is critical for an advertiser to ask the questions necessary to understand not just who is involved in the process of delivering a campaign, but also the respective fees associated with each provider in that delivery chain. In addition to acquiring those costs, advertisers need to become more savvy in asking providers how they make money and what their margins are charged between the actual cost of the media being purchased and the price they sell it for. Nearly every vendor in the programmatic buying delivery chain (DSP’s, Agency Trading Desks, SSP’s, etc.) charge undisclosed margin fees that represent the difference between the cost of the media and the price it is made available for purchase by an advertiser. These undisclosed fees can range anywhere between 15% to 80% (a wide range is credible while being scary, because of greater uncertainty) as a part of the purchasing process. In a programmatic buying example, an impression can be purchased for $0.65 on an exchange and then resold by a DSP, ATD, or other entity for $1.40 on top of the 15% to 22% vendor fee charged upfront (numerics in a flowchart). It is incumbent on advertisers to begin asking the questions necessary to understand all the costs involved in the digital delivery chain to better evaluate its effectiveness as a channel.
05
Data
The true value of digital is the data that it produces, not just the response metrics to the advertising being delivered, but for all the various data points that can be collected from the disparate engagement points ranging from the media vendors in the delivery chain, search engagement, web analytics, social, and mobile. This data yields little value to an advertiser if it is not collected, collated, and analyzed in combination with an advertisers first party data to better understand the efficacy of its messaging, audience targeting, and market positioning. The efficiencies to be gained via the acquisition and analysis of all these data points that could reduce an advertiser’s overall media spend while yielding better performance. To achieve these benefits, advertisers will need to insist on acquiring access and ownership of the data that is collected from their digital campaigns so that it may be leveraged to inform an advertiser’s overall business, not just its media investment efforts. While digital advertising can be overwhelmingly complex, the key to success is the upfront strategic planning process to establish, acquire, measure, and utilize data to maximize the achievement of an advertiser’s business objectives, not just the media performance metrics. If you would like to learn more about how to achieve the most out of your digital advertising, don’t hesitate to drop us a line.
Sincerely,
Raymond Reid
Founder | CEO, advertience Inc.
