The Today Show conversation about the Internet in this 1995 YouTube video seems ridiculous and today the idea of operating a business without an online presence could be considered malpractice.
But for many marketers, the shiny new thing that grew up with the World Wide Web – digital marketing — is beginning to rust just a little bit. Savvy marketers are reconsidering the value of more traditional media like television and radio.
Before all you die-hard digital devotees close your browser or leave me an ugly comment, hear me out.
Companies like Coca-Cola[i] and Procter & Gamble[ii] that have the resources to measure well the ROI and effectiveness of their campaigns are stirring up their marketing mix with increased emphasis on the top of the purchase funnel. Let’s talk about why. In short – ROI.
Coca-Cola global Chief Marketing Officer Marcos de Quinto noted that “Coca-Cola’s TV investment return[ed] $2.13 for every dollar spent on TV, compared with $1.26 for digital.” Moreover, a study conducted by Nielsen Catalina found that the average payback for a dollar invested in a broadcast radio campaign yielded $6.21[iii]. Smart marketers don’t need to drag in an accountant to see the benefits of integrating more broad-based media into their mix.
The Purchase Funnel
So how did marketers get here? Consider our friend – the purchase funnel and the accompanying over-simplified illustration.
Once upon a time marketers believed that a large number of consumers must first be made aware of their product in order to garner interest and consideration by a subset of consumers – their target market. Once target consumers considered a product, marketers could swoop in at the intent stage (often at a retailer’s shelf or online catalog) with attention-getting point-of-sale displays, special offers or incentives and close the deal.
The Promise and Problems of Digital Marketing
The promise with digital marketing was that brands could hone in on their target (e.g. 25 to 40-year-old, married, vegan, urban-dwelling, high earner, female dog owners) and speak to them directly through social media and/or targeted ads. By focusing in on the target, marketers could speak to consumers, one-on-one and simultaneously eliminate “waste” in their marketing spend. It doesn’t take an MBA to see the reasoning and logic to that strategy. Another great benefit to digital was the ability of marketers to measure and tweak their campaigns with analytics and other metrics of measurement. These same measurement tools allowed marketers to communicate with CEOs and CFOs in terms that were less ambiguous.
But here’s the problem. For all the money spent on digital, marketers were not seeing an increase in sales. Why? One reason is that consumers are simply not noticing and/or responding to digital advertising as hoped. Only 14% of consumers say they are aware of a brands’ digital ads and despite retargeting technology fewer still – only 10% – say they were influenced by them[iv]. This should not be surprising since the overall click-thru-rate for display ads is just 0.05% (5 clicks per 10,000 impressions)[v].
Another problem with targeted digital marketing? Not all consumers purchasing a product fit into the target. Consider this … although a beer manufacturer’s target is typically young males (21 to 34-year-olds), 70 percent of sales may be made by consumers outside of the target. The same applies to many other consumer goods and services. Ads served only to young men are unlikely to affect the purchasing decision of anyone outside of the demo. With this strategy, brand managers could target market their company right into bankruptcy.
Brand Marketers Reallocating Budgets
So now many marketers are moving dollars back up the funnel to reach more consumers with television (reaching 87% of the U.S. population/76% of millennials) and radio (reaching 93% of the U.S. population/92% of millennials)[vi]. Campaigns with broader reach are able to influence consumers inside and out of the target demo while also providing message frequency.
You say, “Okay Jeani. I hear you, but broadcast media is expensive. I can buy digital and reach consumers all over the country, but I don’t have a budget to buy broadcast media all over the country.”
There are many options available to brand managers for integrating radio into their marketing strategies. Some brands with deeper pockets may be able to support regional or national efforts, while brands with more modest budgets must prioritize their broadcast efforts in fewer localities. For some, broadcast media may be used to support retailer programs and product launches in specific markets rather than across many markets or the nation. Brand managers may also choose to use one or two well performing stations in a market rather than to engage many to blanket the area. Pulsing flights can also be an effective tool to stretch a budget.
As the largest media company in the U.S. (above Google and Facebook), iHeartMedia is a good place to start. With more than 850 owned and operated radio stations across 150 U.S. markets, syndicated radio shows (i.e. Ryan Seacrest, Delilah, Bobby Bones, Elvis Duran and dozens more) on 5,500 affiliates, Total Traffic & Weather Network (serving 200+ metropolitan areas), and the iHeartRadio app (110+ million registered users), there are radio options for most brands.
One Final Note
One final note. Broadcast media, like digital, is not a silver bullet. Almost all of the campaigns I design and execute for my clients include digital assets alongside their broadcast schedules. I recommend including digital with every broadcast campaign. They are meant to work together like BFFs – and they do. But that is a topic for another post on different day.
Jeani Stevens holds an MBA in marketing. A seasoned marketer and business development executive she currently works for iHeartMedia, Inc. in San Francisco, CA. Jeani and her team create and execute local, regional and national marketing campaigns exclusively for pet brands using a wide variety of marketing assets. Jeani can be reached at JeaniStevens@iHeartMedia.com.