How CMOs Justify Their Digital Budgets

This is the capstone to our series, Brands Being Risky, which looks at brands that are pushing the envelope and taking risks in digital. It is written by the Jeff Smith, senior vice president of marketing and client services for series sponsor Vizu, A Nielsen Company, the leader in measuring digital brand advertising effectiveness. 

At a recent gathering for CMOs, I found myself pulled into a conversation about how marketing chiefs justify their investment in branding online. Time and again, these men and women are asked to tie those efforts back to bottom-line results. It became clear that folks are struggling to quantify their return on investment.

Below are the top three questions CMOs wrestle with when trying to explain their digital investments and how our group answered them.

Why should we move more brand advertising dollars into digital?
As consumers spend more of their time on computers, tablets and phones, more advertising money has moved online. This has led to the development of richer creative formats that allow marketers to create experiences that move beyond direct-response tactics and into immersive experiences — video and social, for example — that are better exploited by brand messages.

Moreover, consistent multiplatform metrics are emerging that allow us to compare the relative efficacy of different media and make more informed decisions based on real return on investment.

At Nielsen, we consider effective advertising to be that which reaches your desired audience, influences their opinion and ultimately impacts their behavior at the cash register. We call this the three R’s — reach, resonance and reaction.

How can we parse the effectiveness of brand advertising online when there is so much data to choose from?
We recently released the 2013 Online Advertising Performance Outlook, a survey of marketers, agencies and media sellers. We found that more than half of media buyers and one in three media sellers surveyed described themselves as “drowning in data.” One marketer described online metrics as a “Tower of Babel.” The good news is that we have the ability to address this ourselves by simplifying the lexicon.

The same study found that the No. 1 metric marketers were interested in understanding, as in any advertising investment, is sales lift. But it is not always technically feasible or cost-effective to measure sales lift on every campaign you run. So it wasn’t surprising that the next two most-wanted metrics were ones that measured reach, like a GRP and resonance, a brand-lift measure. These leading indicators often correlate with sales lift.

Does TV measurement get more like digital, or vice versa?
Our discussion highlighted two factors generally at play — technology and simplicity. From a technological standpoint, digital media allows marketers to collect more granular data than traditional TV. But those differences are shrinking. As we move to a world of connected TV, everything becomes digital. While that might suggest that TV measurement should become more like digital measurement, we believe simplicity will reign. In fact, we’re already seeing digital metrics become more like TV with the industry adoption of an online GRP for a common, simple method of calculating reach and brand lift for calculating resonance.

So there you have it. The general consensus among the CMOs I spoke with was that the future for online branding is bright, as long as we keep it simple.


Image via Shutterstock.