Why advertising spend will shift as brands track sales, not clicks

Marketing budgets are on the up. According to the latest IPA Bellwether Report, a net balance of 8.7% of marketers said their budgets had increased in the first three months of this year; marking a huge improvement on the previous quarter's 0%. And digital was one of the top areas to see a boost in investment.

Of course, this is great news for the advertising industry. But, with increasingly big budgets being pumped into digital advertising, brands need to understand the impact it’s having on their business. Otherwise, how can they justify asking for even bigger budgets for future activity?

Out with the old and in with the new

For a long time, impressions and click through rates have been used as an indication of campaign success. But times are changing. I wouldn’t go as far as to say that the click through rate is dead – but these metrics certainly aren’t considered to be as valuable today as they once were.

It’s no longer enough to simply track whether a consumer has been served an ad, or even whether they’ve clicked on it. After all, what does this even mean? At best, it suggests potentially increased awareness and interest. At worst – for the more cynical in the industry – it could mean no more than an unnoticed ad or a case of fat fingers.

It’s time for advertisers to move beyond legacy metrics and consider those that genuinely impact business performance – from awareness and perception to engagement and sales. Yes, these have traditionally been harder to gauge. But as technology advances and data becomes richer and more sophisticated, they’re no longer just a pipe dream.

Connecting marketing with sales

As pressure mounts to demonstrate ROI, advertisers will inevitably shift spend to channels that not only drive performance – through audience insights, for example – but allow them to track tangible outcomes like sales.

eCommerce sites are the obvious choice, providing rich insights into everything from dwell time to average spend, which help brands learn about customers. And the more brands know about their users, the better they can engage with them – meaning their efforts will be rewarded with better results.

But very importantly, eCommerce sites also allow brands to make the critical link between their marketing activity and their sales. At eBay, for example, as well as measuring audience engagement with their ads, brands can track the sales that directly result from them. And as soon as you can put a pound sign against it, this changes marketing from a cost to an investment.

A re-education in measurement

Clearly, there is appetite to invest more in advertising and to see a significant return on that investment. But many marketers are still stuck in the dark ages when it comes to measurement – sticking to what they know, because it feels easy. But that doesn’t mean it’s right.

Instead of relying on the same old data points and metrics they’ve always used, it’s time for marketers to shift gear, challenge the status quo and consider new ways to gauge the impact of their marketing spend.

Brands have a responsibility to educate themselves on how best to measure campaigns, to help them reduce reliance on legacy metrics and demand true measurement from agencies, tech partners and publishers alike. But it’s ultimately up to us – as the platforms selling them ad space – to help them understand what’s possible.  

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

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