Three Good Reasons Advertisers Should Be Spending More in Digital

My first boss once offered this gem of wisdom:  “numbers are your friend.”  By this, he meant that data and analysis could usually win the day in supporting your case and getting people to agree to what you were recommending.

Imagine my surprise when I first looked at a comparison of media consumption and ad spending on TV and on-line.  By the numbers, consumers spend about 1/5 the time on-line as they do watching their old favorite, TV. Yet advertising spend on-line is only 1/10 of TV ad spend.  What gives?

Advertisers are still reluctant to put their dollars into digital.  I see this phenomenon with advertisers large and small, sophisticated and unsophisticated.  And the barrier is often not Marketers themselves but senior management still rooted in a TV only paradigm.

Why advertise in digital?  Here are three good reasons why:

1. Market Mix Modeling Shows that It Works

Most CPG companies use market mix modeling to understand the single variable impact of each marketing element on sales.  This approach works especially well for larger campaigns where the sales response of even smaller spend items can be measured.

Many companies do market mix  modeling, including Nielsen (disclosure:  I work at Nielsen), and a number of them have a point of view on the efficacy of digital advertising spend.

In general, when we look at mix modeling results across many brands and campaigns, we see that the ROI (sales/investment) for on-line is higher than TV and all other major marketing elements.  So, digital advertising works.  

2. TV + Digital Is More Effective than Either Alone

Marketers have a strong belief that integrated cross-media campaigns should work better than a single media campaign.

Neuro-science helps us understand why.  The human brain processes information differently by media.  So brain activity and processing is different for TV and on-line.  And more brain space generally equals more impact.

Cross-platform measurement from Nielsen tells us that the same TV ad works better if a consumer has also seen the Digital version, even when adjusted for frequency.  Said differently, when it comes to TV + Digital, 1+1=3.  Investing in digital actually makes your TV advertising work harder for you — yet another good reason to invest in digital.

3. Digital Extends Reach at Lower Cost

One of the key reasons to extend a campaign across media is to extend reach. And digital is actually quite good at building campaign reach among difficult to reach TV viewers.

What’s less well know is that with smart planning, advertisers can usually extend campaign reach by adding digital to TV but at a lower total cost. That’s right:  you get more reach at lower total cost than TV alone.

Maybe my first boss was right after all. Numbers really are digital advertising’s friends. The numerical trifecta of higher ROI, improved TV performance, and greater reach at lower cost is a compelling rationale for moving more of your spend into the digital realm.

So, the next time your CEO challenges you on digital ad spend, just remember that “numbers are your friend.”