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Marketing ROI in the Digital Age


The internet is touted as the most measurable of all advertising and communications media. Yet, marketers and advertising agencies across the globe are grappling with how to accurately measure the return on investment (ROI) on their digital marketing campaigns. Undoubtedly, the medium has a wealth of readily available data, yet nobody has so far been able to come up with a winning formula to extract maximum value out of this. Making sense of these numbers to get a holistic picture is posing a big challenge.

The dilemma of measuring consumer data:
Many marketers are finding that analysing consumer behaviour is getting more complex, especially in the online world, not only because of the reams of data, but also because that data comes from various sources, including consumer touch-points, data providers, and advertisers. According to the Brite/NYAMA Marketing in Transition study in 2012 , 91% of senior corporate marketers believe that successful brands use customer data to drive marketing decisions, yet 39% say their own company data cannot be turned into actionable insight. So how does one meaningfully collate this and understand consumer data?

Take the case of television. For many years now, the advertising community has used TRPs as a metric to calculate the reach and frequency of their television campaigns. After years of use, they have been able to meaningfully interpret this data. Can this evidence be used to understand digital consumers? On TV, ads are placed to run at different times, between different shows. Online, videos are a whole new ball game. It is unclear where and how exactly the viewer has seen them. This means, while the reach and frequency can be measured, the value of the ad experience is not captured. Also, it cannot indicate if the ad has actually been watched. Often, we blindly skip ads that come in the way of what we want to watch online.

Various companies are trying to crack the code on how to get the most out of the internet. Online reputation management has become very important. There are a number of popular and free services like Google analytics that give you a basic description of your online reach. Others are trying to break new ground.

To take note of a few, Comscore, a leader in measuring the digital world, introduced the validated Campaign Essentials™ (vCE) for Video in October 2012. This measures GRPs, demographics and behavioural profiles of audiences reached by video campaigns, as well as the extent to which video ads were actually viewable by consumers. This hopes to deliver more insight on whether the video ad was actually seen by a real viewer, bringing these metrics into closer alignment with TV.

In India, digital marketing agency, Experience Commerce has launched Brand Buzz Index, a tool to effectively measure your online social presence and activity. All this is very exciting, but does not offer any clear solutions.



How to use the abundant data:
Media analytics are considering multi-channel attribution approaches that are yielding positive results. Consumers operate across multiple channels (online, mobile, tv) and there are metrics to measure their interaction in each of the channels, but no integrated system to measure the consumers mind-path .

So far, cost per impression along with cost per click and cost per order have been used to assess the success of internet marketing campaigns. Cost per impression is most comparable to television or print that sell advertising based on estimated viewership or readership. A multi-channel approach, on the other hand is one that acknowledges that there are a number of inputs that drive a purchase, and quantifies this.

E-commerce websites were the first indicator of how effectively online transactions can be traced. This is especially true for travel, matrimonial and job postings that have adopted efficient and practical business models. The return on investment for these companies is directly measurable, because there is a fulfilment of the transaction. Interestingly, even these companies see sense in spending on television advertising to drive traffic to their websites (, etc.). Marketers and agencies are now seeing the value of using multiple media together to effectively communicate their strategy. Flipkart, for instance, started spending on television advertisements since 2011 and has increased their spending by nearly 55% in 2012 to Rs. 17.66 cr. Dell Computer Corp. is famous for having boosted its online sales of computers in the mid-1990s through a multiple media strategy. The company provided a unique telephone number for every medium they advertised in. This way, they were able to gather which of their media is most effective, and allocate their ad-spends in a more prudent fashion.

However, for traditional industries that are looking to tap the digital consumers, there is a gaping hole in the matrix. How does an FMCG player know whether his online advertisement has led to the actual sales of his product? How much scale can he get? So far, automobile and financial services sectors, whose consumers already have a high digital presence are increasing their activity in the online space. However, it is necessary to take the campaign offline and follow through if they have to measure the actual impact through sales.

Capturing audience realtime:
India has over 130 million internet users, today. Of these, over 65 million are present on Facebook, making this one of the key avenues marketers are looking to leverage. Nearly 20% of these Facebook users are between the ages of 20-35. Youth, therefore, are one of the strongest influencers of purchasing today. This demographic is a challenging one to target, as their interests are quick-changing. Brands have to use various digital channels depending on the target audience. For instance, a brand targeting youth will need to have an active social media presence or a brand that targets the common public will find more access in mobile media. The concept of digital marketing itself is very new to India. Marketers, therefore, are hesitant to do new things online. They need to understand that it is not enough to have a presence but also be proactive, as that is the calling of this new medium.

The big concerns:
Lately it is being widely acknowledged in the industry that attribution the cause of conversion primarily to the last action leads to over-attribution of the consumer’s response to that action The need to capture the journey both online and offline has led to the emergence of different approaches.

Automobile companies have a large digital presence. Nine out of ten times, the campaign has to be taken offline to see if it has translated into a purchase. A digital marketing executive, who worked on the Maruti Suzuki brands for over two years, observed that owners of Maruti are very attached to their cars. “In 2010, we ran a milege contest campaign online for Alto, and were overwhelmed by the response we got for the rally. That’s when we realised the potential of online advertising,” she said. Social media monitoring leads to many revelations especially complaints, or defects. They actively monitor this. “Over and above, we found it essential to constantly update our Facebook page content to draw more customer engagement,” she said.

In the FMCG space, the path is not so clear. According to industry estimates, Hindustan Unilever spends nearly 5% of its advertising spends on digital marketing and this is expected to rise . According to Sudhir Sitapati, GM, Skin Cleansing, “The main challenges are that scale is not large enough in digital marketing with respect to the women target group. Also, there aren’t enough examples of FMCG wins in digital.” Yet, they have to increase spends, as this is the medium of the future. They use Youtube and Facebook, widely. “We need to get a better understanding on the impact of digital among housewives,” he points out.

A senior marketing official from another leading FMCG brand indicated that a critical concern is the unorganized source of data for their digital campaigns. “It is still a learning process for us. Our agency is devising a tool to put all of the comparable data on one excel sheet, and organize it according to the brand. As of now, it is time consuming as the data comes in as and when the surveys are completed, and we have to collate it to make sense out of it,” he said.

It is essential to find simple ways to measure ROI amidst huge data and constantly evolving marketing tools. Innovation and effective measurement will keep evolving. Here are a few suggestions to ensure the right kind of data use:

1.Devise a single platform to compare data. Digital marketing efforts are often like comparing apples to oranges . The channels are more likely to be measured with metrics that cannot be compared with other channels.

2.Make sure your data is timely, actionable, linked at the customer-level. Online campaigns cannot work purely on the existing principles of today. Before a consumer survey is commissioned and an insight from it interpreted, the audience has moved to something new. How does a large organization compete with the darting nature of the online medium? Metrics to capture real-time insights should be used and quick action needs to be taken. The creative has to be strong, completely fresh, and different from what’s been done before and most importantly, engage the consumer. Yet, the viral which can catapult the success rate of the online campaign is the big X factor.

3.Share your data across your organization. This will reduce the disconnect people feel and enable better adoption of decisions based on data analyses.

4.Digital media owners should go beyond providing data. They need to research their own consumers better so advertisers know what to get from the digital medium. In turn, firms need to identify what data they need before launching a campaign.

5.Look at the internet as an e-commerce medium. The internet should be seen as a definite source of revenue in order to spend on the medium.

6.Finally, make multi-channel attribution a key component of the overall business strategy and not just the marketing strategy.