By Carl Carter, Head of Marketing Strategy & Effectiveness, IRI
Around Halloween the last year, my partner was scrolling through a video-on-demand website looking for a spooky movie to watch, when we were bombarded with a Halloween-themed candy advertisement. For several minutes I was the captive audience of a completely contextual advertisement and, quite honestly, it worked. I started to want the candy. I had to have the candy. Having such an engaged audience wouldn’t have been possible even a few years ago, before digital became as huge as it has. Media buyers know the landscape is changing but how to engage with it most effectively is still a guessing game for a lot of brands.
During IRI’s 2019 European Summit, I was joined by Loop Me’s MD APAC, Pete O’Mara-Kane, to discuss the type of media that brands are currently investing in and the uncertainty in advertising that’s making it harder to prove the impact of media on sales.
According to IRI data, between 2010 and 2018, the share of digital and out-of-home (OOH) spend grew while TV spend fluctuated. What’s most interesting, however, is the amount that was spent on AV (Broadcast TV and Video on Demand), which encompasses the digital formats of TV. This highlights the fragmentation of TV and demonstrates that TV spending hasn’t decreased nearly as much as we think, it’s just being distributed to different formats other than traditional.
Source: IRI Analytics projects – UK FMCG
How secure are brands in their current media investments?
Source: IRI Analytics projects – UK FMCG
If you’re feeling overwhelmed, you’re not alone. IRI data shows that brands aren’t sure where to spend their media budgets, due in part to the digital space evolving just as rapidly as traditional channels. Digital used to consist of only a few channels, including banner advertising and search, but has incorporated social, mobile online video and other small fractures. Even in its short existence, social already accounts for one-third of the media budget. But, despite digital’s quick rise, it isn’t here to save the day. Traditional media is still relevant. In fact, an IPA Touchpoints report found that adults spend around 62% of their time on traditional media versus 38% on digital.
Balancing the big box and little box
Brands are always in search of excellent performance with the least amount of wasted money, time and effort. With media spend, the goal is to strike a balance between being effective (big box) and being efficient (small box), thereby driving high volume sales with strong ROIs, without wasting too much effort and expense. However, it’s not always possible to find harmony between effectiveness and efficiency. Too much efficiency may result in not enough sales, and too much effectiveness likely means you aren’t being efficient enough. If you need to make a sacrifice between the two, choose efficiency. It may need to take a backseat to effectiveness so your brand can break into the market and grow market share.
Another point to consider is the amount of money you need to invest in order to see ROI. At IRI, we’ve seen that TV provides effectiveness and efficiency, but it commands the highest share of spend and viewership. Other channels like OOH, radio, and video on demand are relatively efficient compared to each other.
Test and Learn
The industry continues to get more and more fragmented, and consumers are already overwhelmed by the number of ads they see every day. The only way to discover the most efficient and effective solution is to regularly test and learn. It doesn’t cost as much as you may think, and the insights gleaned can help you get a much more granular picture of what’s truly happening. For example, how you target Gen Z may differ from how you target millennials but without testing and learning, it’s not clear whether each group requires personalization or success is dependent on some other factor. What is clear is that advertisers have questions that need to be answered, and big data combined with an ongoing test and learn approach can ultimately drive better sales results.
Do you want your advertising drive better sales results? Contact me at Carl.Carter@IRIworldwide.com to learn more.