Digital advertising will not get the respect it deserves in the marketing mix until media buyers and advertisers look at the value that it offers beyond the click and execute their campaigns accordingly.
The rise of digital is causing mayhem in the media buying market as media buyers grapple with its role in the marketing mix.
The digital advertising space is rife with confusion because many of the stats about the South African digital landscape are incomplete or inaccurate, and because agencies, brands and buyers do not understand its full value.
With the number of unique browsers (not users) in South Africa increasing from 9.5m to 20.3m between June 2011 and March 2013 according to Effective Measure, the online market is one that few brands can ignore. Yet digital ad spending patterns are still poorly understood.
Nielsen’s Ad Dynamix estimates digital accounts for circa R800 million (3%) of the circa R30 billion South African brands spend on advertising each year. Yet this stat is misleading because it does not take discounts on card rates into account – the higher level of discounting in digital makes it hard to make meaningful comparisons with spending on traditional media types.
What’s more, these stats are largely based on display advertising and do not take the full impact of search, social and mobile media spending into account. Discussions with agencies and advertisers lead me to estimate that digital advertising’s slice of total ad spend could actually be closer to 5%.
Why does this matter? One reason is that understating and underrating digital’s value leads to cut-throat discounting. One trend Kagiso Media is seeing, is that the number of advertisers, orders, the number of orders per advertiser, and average deal sizes have grown over the past three years, so too has discounting expectations from buyers.
Discounts are placing downward pressure on publishers’ inventory yield and forcing them to use disproportionate amounts of inventory to honour larger deal sizes. This means that publishers’ profitability and sustainability is under pressure, while advertisers battle to get access to prime inventory.
There are three things that online publishers would like to see from brands, advertisers and agencies but seldom receive:
· An appreciation that digital is about more than the clicks.
· A deeper understanding of what value clicks deliver – if clicks must be discussed at all.
· A better understanding of the value digital brings in terms of branding effects such as brand recall, awareness, favourability, and purchase intent.
To drive better value from digital spending, media buyers along with their publishing partners should spend time understanding engagement measurement metrics such as click-throughs, traffic, dwell time, and dwell rate, as well brand-building effects.
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Categories: Digital Advertising