Month: April 2022

Pilots need real-time information to tell them how well their aircraft is performing and whether it’s on course to arrive on time or earlier, using airspeed indicators, altitude indicators, altimeters and more. The end goal is landing in their desired location. In-flight information is knowing and optimizing, while in flight, their means of getting there. Marketers, on the other hand, often don’t have the tools they need to understand in-flight performance and are forced to focus on the landing. 

In a data-driven marketing era, leveraging in-flight indicators to optimize your campaign in near real time is key to achieving campaign results and a positive ROI. On-target audience metrics are a key in-flight indicator of performance. In fact, Nielsen recently conducted an analysis to validate that if you deliver the right ad to the right audience, you will improve your ROI, confirming that audience metrics are an early indicator of campaign performance. The validation follows basic marketing reasoning, given that advertisers and agencies have been preaching this sentiment for years. 

Better reach = better outcomes

In our analysis, we conducted research across 15 brands and 82 campaigns and found that audience-based reach metrics are a clear and proven indicator of outcome metrics (ROI and effectiveness). We determined this by aligning in-flight reach metrics from Digital Ad Ratings (DAR) with outcome metrics from Nielsen Attribution. 

Across those brands and campaigns we found a strong relationship (R-squared of 0.68) between audience-based reach metrics and sales outcomes. Said plainly, we found that 68% of the variance in outcomes across the 15 brands could be explained by the performance of a corresponding reach metric.

Take the blinded advertiser example in the chart. Each bubble represents data for one vendor, for one month, on one campaign. The X-axis displays the Tracked Ads Index, which is an index of the percentage of ads served to a target audience versus the population size. 

The calculation for the Tracked Ads Index is as follows: 

• If you serve 4% of your ads to an audience that is 4% of the population that equates to a 100 index, fair share.  
• 2% of the ads would be undeserving this audience and a 50 index. 
• 8% of the ads would be overserving and a 200 index.  

ROI is on the Y-axis. The particular example is from an advertiser that saw results with various partners reaching its target audience.

The graph below shows three distinct performance groupings:

• The group in the bottom left represents partners who poorly reached their target audience.  
• The group in the middle represents partners who were slightly better than random in reaching the target audience.
• The group in the top right represents partners who focused on reaching the target audience. 

In this example, how did audience performance affect ROI? The cluster in the lower left (vendor/campaign/month data) represents an underdelivered audience, generating an average ROI of $0.25 for every $1 spend. The majority of the activity is in the middle of the chart, generating an average ROI of $1, but ROI did trend higher as the index increased. The cluster in the upper right represents the impact of delivering more ads to the targeted audience, which led to an increased ROI of $2.60 per $1 spent.

Knowing how you got there

So, what does this mean? Much as a pilot can use an altitude indicator to understand orientation with respect to the Earth’s horizon, marketers can use DAR metrics to indicate future outcomes performance. These metrics can also help marketers fine-tune their audiences, as was the case in this example. This particular advertiser previously used a variety of targets in the past, including a focus on much younger demographics. This analysis showed that focusing on the target audience while monitoring and optimizing performance in-flight leads to higher ROI for this brand.

It isn’t enough to simply know that you arrived at your destination, or that your campaign was successful. Marketers need to know how they got there and how to monitor their performance along the way with in-flight indicators if they plan to repeat and potentially improve their performance in the future.

Channel fragmentation and increasing media options provide consumers with an abundance of choice, but they present a hurdle for marketers that rely on traditional mass reach channels to increase brand awareness. And just as we’ve seen in previous years, the marketers surveyed for Nielsen’s 2022 Annual Marketing Report say building brand awareness is their top objective for the year ahead. Similarly, their top business priority is new customer acquisition.

While there is no discounting the importance of reaching the largest audience possible, doing so today requires increasingly more planning and strategy than it did when our media choices were far more finite—and marketers could use a handful of channels to meet their mass reach needs.

To achieve their top objectives, marketers need to reach large prospective customer groups. Amid a readily fragmenting media landscape, however, they need to approach mass reach differently than they did when it was easier to define what it means to “watch TV.” That being said, the need to drive brand awareness has never been greater.

In addition to the prevalence of choice and access, some traditional sources of brand equity are less apparent than before the pandemic simply because of reduced visibility. With many consumers shopping less regularly at physical stores, for example, the frequency of seeing a product on a shelf or a sign in a store window has declined.

In today’s world, it’s a risky proposition to take non-marketing sources of equity for granted. These examples also elevate the importance of staying top-of-mind with consumers when a sale is at stake.

To do this, global marketers continue to lean into social media, with 64% of respondents for this year’s marketing report saying it’s their most effective paid channel. And in light of recent successes on platforms like TikTok and Instagram, it’s easy to see why the sentiment—and related spending—is growing. 

Notably, global marketers plan to increase their social media budgets more than any other channel over the next year.  The projected average increase globally (53%), however, would be higher if it weren’t for marketers in Europe, Middle East and Africa (EMEA), as they intend to increase their social media spending less than marketers elsewhere (31%).

While global marketers continue to spend on social media, search and email, these channels aren’t typically ideal mass reach options. There is, however, no discounting the growing reach of online video and connected TV—and marketers are increasing their spend accordingly. Importantly, they want to ensure that their spend is reaching the right audiences—real people making real choices. In December 2021, for example, YouTube reached 135 million people on TV screens alone¹. YouTube is also a growing force in the streaming space, as Americans streamed 177.3 billion minutes of video² on the platform in January 2022. 

Reaching new consumers isn’t what it used to be, and the last 2.5 years have permanently changed consumer behaviors. Traditional mass reach channels like traditional TV and radio are still critical in any marketer’s media mix, but they’re no longer the only options for reaching large audiences en masse. 

For additional insights, download our 2022 Annual Marketing Report.

Notes

1. Nielsen Streaming Platform Ratings
2. The Gauge, February 2022