In the marketing and advertising space, 2020 was a transformational year. The huge growth in online retail and ecommerce brought about by the pandemic led marketing professionals to alter their strategies and dedicate more of their budget to digital channels. In fact, 76% of professionals in the marketing field are planning to increase spend on online video ads, while 70% are looking to invest more in social media stories and 68% on social media feeds.
The increased levels of competition online are, however, raising the risk of advertising budget overspend. Therefore digital marketers need to take steps to ensure that highly-targeted ads are delivered via the right channels to keep unnecessary costs down.
Understanding the problem
An average of 26% of budgets are wasted on ineffective channels and strategies, according to a worldwide survey of marketers worldwide in 2018. For most digital marketing teams, the root of the problem lies in a lack of actionable insights to objectively evaluate their efforts and inform decision making. Research from ROI Hunter’s work with hundreds of clients with billions in spend has found that around 50% of dynamic advertising impressions are typically going to just 1% of products in the catalogue. Even more worrisome, marketers don’t have control of which 1% of their products get promoted, or even visibility into which products receive it.
This issue is compounded by the fact that product data is frequently found in disparate silos across organisations. Marketers rarely have access to product margins or return rates, and merchandisers don’t often know the ad spend behind each item. This lack of control and central visibility means marketers are only able to see part of the picture. As a result, advertising strategy and spend is often based on a best estimate from limited data sets.
Leveraging product data
One way that digital marketers can eradicate guesswork and improve the effectiveness of digital advertising strategies is to use their product performance data to inform promotional planning. By syncing product data from across their channels, digital marketers can unlock a wealth of new insights to drive greater performance. For example, marketers can identify their bestseller products based on the amount of revenue or transactions, and ramp up promotion.
The most simple and logical way to utilise this product performance data is with a Product Marketing Platform (PMP). PMPs empower marketers with insight into the performance of individual products across their channels. Unlike the more well-known customer data platforms, which focus on collecting and integrating customer-level data, product marketing platforms focus on collecting and integrating product-level performance data like margin, generated revenue, ad spend in different channels, or number of transactions.
Marketers can even use a custom source to connect business data like stock levels and returns for even more advanced campaigns. With this cross-channel product performance data, marketers are able to create highly dynamic product sets based around their specific goals. A PMP creates a single source of truth, enabling digital marketers to automate, scale, and increase the profitability of their digital promotions.
A PMP also connects this integrated data to campaign creation tools. Additional layers of execution built on top of the insights (a photoshop-style template editor, and a tool to turn images into product videos) makes the deployment of dynamic ads on a large scale simpler and more effective, while the data behind those ads helps bring in higher returns.
Keeping ahead of the competition
With regulations limiting the use of customer data, digital marketers need to take action by delivering more effective and targeted advertisements across the right channels with the right product. The key to making this happen is the use of product data. Without it, marketers will continue to overspend on the wrong products and underspend on those with potential.
Product data will ultimately transform digital advertising and promotional planning, enabling digital marketers to attain a better return on investment and allocate precious budget more efficiently. The first step to achieving this is the collection and collation of cross-channel product data to inform performance, and the most effective way to form this single source of truth is with a Product Marketing Platform.
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