Maximizing Media ROI
Head of Insights
Wavemaker is a next generation agency that sits at the intersection of media, content and technology.
Media ROI faces scrutiny in tightening China market
Brand building pays off in higher conversion rates
Advertisers are paying attention to media ROI more than ever before because competition is becoming fiercer, the rate of economic growth is slowing, and the media landscape is becoming more complicated. Advertisers are placing more importance on results-oriented KPIs like conversion and sales, and less importance on brand-related factors.
While it is true that focusing on business KPIs may bring a spike in business, it is not a long-term solution. We have begun to see evidence of this short-sighted approach, with instances in which sales volume has declined because brand building has been neglected. In China’s car market, for example, the impact of performance media (like auto vertical platforms) on the sales volume has begun to decline.
Brands eventually will learn the benefit of balancing the need for immediate sales with the need to build brand value long-term. But it can be a costly lesson. To accelerate learning, we recommend these three principles for maximizing media ROI:
- // INTANGIBLE vs. TANGIBLE.
First, define the meaningful KPI and measurement metrics. There are mainly two types: intangible and tangible. Intangible KPIs/ metrics are branding related. And tangible ones are performance related, like conversions and sales, and behavior change. The ultimate rule is this: intangible metrics are always more important than the tangible ones, especially when the market is overwhelmed with brands and products. Intangible metrics build brand equity, a positive bias that influences purchasing.
Through Wavemaker’s proprietary study, Wavemaker MOMENTUM, we found that 50 percent of consumers globally have strong bias towards brands in the Priming Stage (The Priming Stage is daily life, when consumers are not actively in the market to buy). And 50 percent of consumers with a strong bias will convert to purchase in the Active Stage (The Active Stage is when consumers are a looking to make a purchase, gathering information, shopping, making a decision). Purchase conversion is six times higher for people with a strong brand bias.
// PLANNING vs. MEASUREMENT
Planning is important, but it is less important than a systematic measurement solution. Because only through a comprehensive system to monitor, test, and learn is it possible to find the most relevant indicators related to market growth, and to optimize media investment along the whole consumer journey.
For every campaign, is necessary to measure KPIs from multiple perspectives (both intangible and tangible) to gain insights about what media investments drive immediate sales results and what kind of media investments drive long-term brand building and business growth.
At wavemaker, we are already providing clients with such systematic solutions. We see how important it is to calibrate KPIs and brand matrix metrics for different categories, brands, businesses, and market development stages. For each campaign we identify the critical indicators that will achieve maximum marketing impact.
- // NARROW FOCUS vs. WIDE REACH
Less is more. Everyone knows this truth. But it requires making choices, which is difficult. Focusing investment, rather than spreading it thin, is much more impactful. Still many marketers have difficulty making the requisite choices.
It’s stressful to narrow the focus, especially when many peers are trying new media formats and platforms, spreading out their investment “to be safe.” Procurement costs add more pressure. But with a limited media budget, focusing is more important than reaching too broadly.
Especially in today’s tight-budget environment, marketers must be brave enough to make difficult choices; to be more focused, perhaps, but buy the most meaningful media to maximize long-term impact.