Published in Jul-Aug 2015
|Illustration by Creative Unit.|
There is an old adage in the ad world suggesting that although we know that 50% of ad budgets are effective, we don’t know which half. While media research has improved, I am not sure if we are getting closer to answering this question.
Planners are better able to optimise spend within selected media, but find it more challenging to optimise across channels. Some argue that spend is skewed towards media that provide more robust research and hence able to better justify decisions. Others question the integrity of the research and prefer to focus on judgment based models. This begs the question – is there truth in numbers or is our intuition the better option?
In either approach, the end goal is effective decision making. This includes doing the right things and doing things right. Currently, we are better equipped to make decisions in terms of the latter but still have insufficient data and analytic capabilities to do the former. This is not necessarily a Pakistan-only phenomenon. To some extent it mirrors challenges that are global in nature.
Back in the days when there were limited choices, our decision to consume content was driven by the choice of media. We would read the newspapers for news, watch TV primarily for entertainment, listen to music on the radio and see a few billboards peppered throughout the city. Now, we are almost channel agnostic in how we consume content. News is available through newspapers, TV, online and real time through mobile. People can watch their favourite drama on their tablet. The producers of content are no longer the usual suspects because ordinary people have become content creators too. Breaking news seems to appear faster on Twitter than on news channels. Entertainment content is pushed virally through Facebook.
In this complex multimedia environment, do the old ways of measurement still work? Will the ability to measure drive how planners allocate ad spend?
Until the advent of digital, TV has been the medium which offered the most data and research, not only in Pakistan but globally. People meters (Medialogic in Pakistan) provides an automated system with access to TV viewership data on a minute-by-minute basis. Further enhancement with the digitisation of TV with digital set-top boxes (PTCL Smart TV) gives even more robust information through Return Path Data (RView in Pakistan). The large subscriber base of digital set-top boxes also helps overcome the limitations of small sample sizes associated with the people meters.
Although the ability to track is certainly a plus-point for TV as an advertising medium, until now its popularity in widely distributing audio-visual content has been the key driving factor in attracting the lion’s share of ad spend. Since the advent of TV, no other traditional channel such as print, radio or OOH has significantly challenged the dominance of TV. However, online channels, including mobile, are slowly taking share from TV as the digital ecosystem becomes stronger. Part of the shift is because digital’s measurability is equal (if not more superior) to TV’s, but mostly because consumers are spending more time on it to search, socialise and consume content. Dailymotion, a video content website, is among the top five most popular websites in Pakistan; an estimated 10% of the 340 million monthly visits to dailymotion.com are from Pakistan.
By 2018, share of global ad spend online is expected to be equal to or surpass TV.
Currently, share of spend online in Pakistan is significantly lower compared to global ad spend. If internet spend is excluded, Pakistan’s distribution of ad spend among traditional channels looks quite similar to the allocation of global ad spend, the only difference being the distribution between the two broadcast channels – TV and radio.
Therefore, one could speculate that although better research in traditional channels is unlikely to create major shifts, it would make ad spend within those channels more efficient.
Digitisation, however, will have a far more profound impact in the future with regards to ad spend. As bandwidth grows, fuelled by cheaper pricing, digital set-top boxes will increase, more radio content will be streamed, news content will continue to find a following online and OOH will become more interactive. In such a scenario, ad serving for all channels could become centralised, using networks similar to Google Adwords for integrated planning and execution. The ability to target and measure response will be significantly more effective than the current measurement methodologies.
Despite all the expected advances from increased digitisation, the principal thinking behind media planning will not change. The basic parameters of reach, frequency and timing will continue to be relevant. However, instead of optimising on these parameters within a given media channel, the opportunity will be in looking across channels.
Even with current research, decision making can be more effective if the quality of the data improves through audits, and the level of analytics goes one step deeper. Groups with different demographic characteristics have very different media habits. They are typically split by younger versus older, male versus female, working versus not working, and richer versus poorer. For example, a segmented approach targeting higher income SECs because of their higher consumption habits, could tilt ad spend towards online channels, given that the top 20% income group in Pakistan accounts for more than 40% share of consumption. It would also not be a far stretch to assume that most, if not all, of the 20 million Facebook users and 13 million 3G/4G users fall within this top 20% income group. Therefore, a more effective strategy would be to target this group using Facebook’s more robust targeting. For example, Facebook ads can be targeted specifically to users from Pakistan between the ages of 18 and 34, who own a smartphone and are interested in cricket, with the option to cap a user’s number of exposures to the ad or pay only when someone clicks on the ad.
While improvements in media research have focused on tracking, advertisers need to up their game by investing in research and analytic modelling which correlates media tracking with sales.
It not only requires an understanding of the impact of media reach and frequency, but also evaluating the impact of creative and messaging. Such an analysis would be more likely to impact any shift in ad spend.
In conclusion, media tracking will help improve ad spend within selected media but is unlikely to cause any major shift in the distribution of spend across media. However, it is important to improve the quality of research to ensure better data integrity and sound methodologies, as higher a margin of error can waste a lot of money. In the near term, spend on TV will continue to grow but its overall share is likely to concede to digital spend. Lastly, there has to be an effort by advertisers to invest in more sophisticated data modelling to correlate tracking with sales.
The basic parameters of reach, frequency and timing will continue to drive planning. However, technology will continue to disrupt media usage and conventional advertising models for decision making. Advertisers and agencies will need to be agile to embrace changes quickly.
Amin Rammal is Director, Firebolt63, The Brand Crew and APR. email@example.com