When P&G cut way back on digital advertising … and nothing changed.

If you suspect that digital advertising might well include a big dose of “blue smoke and mirrors,” you aren’t the only one who thinks this way.

In fact, Marc Pritchard, chief brand officer of Procter & Gamble, felt much the same thing. Back in early 2017, Pritchard complained to the industry about what appeared to him to be an unacceptable degree of waste in the digital advertising supply chain.

Among his concerns was the lack of transparency between advertisers and digital agencies, as well as the myriad ad-tech vendors that seemed to be adding more complexity that was disconnected to any defined value.

Pritchard was also concerned about the prevalence of bot traffic and the dangers to brand safety posed by risky content.

Holding the purse strings of one of the largest digital advertising budgets on the planet, Pritchard was in a uniquely strong position to exert changes in how digital advertising campaigns are handled.

And yet, even with this threat, the response from the industry didn’t go much beyond mild alarm and a bit of lip-service.

So, P&G‘s CBO put some juice behind his warning, cutting more than $100 million in the company’s digital ad spend between April and July of 2017. Pritchard noted at the time that this reduction in ad spending was designed to reduce waste.

After cutting the $100 million in ad dollars – representing a 20% reduction in P&G’s digital ad spend – what changed was … exactly nothing.

That is correct: no negative impact on ROI at all.

In fact, P&G actually experienced a ~10% increase in the overall reach of its remaining advertising campaigns.

How to explain this counterintuitive result?  Spending less but reaching more consumers occurred because extra efficiencies were harnessed by carefully pruning ineffective inventory and reallocating the remaining budget to higher-quality placements.

Imitation being the sincerest form of flattery, another major consumer packaged goods company – Unilever – soon followed suit, reducing its own digital advertising spend by a whopping 50%.

Its move garnered the same result: no discernible ill effects on ROI resulted from the dramatic cuts.

The experiences of these two companies have poked several gigantic holes in a number of “truisms” about digital advertising.  Here’s what we’ve learned:

  • Ad spending doesn’t drive value when it isn’t tied to quality metrics like viewable inventory.
  • “Quality” is something that can be controlled by taking steps like moving platforms.
  • Measuring the quantity of impressions isn’t as important as the quality of those impressions.
  • “Scale” isn’t king. Advertisers don’t need to have super-large budgets in order to drive meaningful results in the digital sphere.

Indeed, P&G and Unilever have proven that a media strategy that focuses on context and quality rather than brute force can get a lot done for significantly less outlay.

Programmatic ad buying in the B-to-B sector: The adoption rate grinds to a halt.

Each year, Dun & Bradstreet publishes its Data-Driven Marketing & Advertising Outlook report.  The report’s findings are based on a survey of marketers in the business-to-business sector.  Among the questions asked of marketers is about the advertising tactics they utilize in support of their sales and business objectives.

A look at D&B’s annual outlook reports over the past several years, an interesting trend has emerged: The adoption rate of B-to-B companies being involved in programmatic ad buying has plateaued at somewhat below 65% of firms.

In fact, you have to go back to 2015 in D&B’s reports to find the proportion of companies involved in programmatic advertising running significantly below where it is now.

That being said, those firms that are involved in programmatic ad buying are planning on allocating additional funds to the effort. The most recent survey finds that ~60% of the respondents involved in programmatic advertising plan to increase their spending in 2019.  That includes ~20% who plan to allocate a significant dollar increase of 25% or greater.

Another interesting finding from the 2018 survey is that there appears to be slightly less interest in display and video programmatic ad placements – although display remains the most commonly run ad type.

Where heightened interest lies includes one category that should come as no surprise – mobile advertising – as well as several that might be more unexpected. Social media advertising seems like it wouldn’t be a very significant part of most B-to-B ad buyers’ bag of tricks, but two-thirds of respondents reported that programmatic advertising in that sector will be increasing.

Another interesting development is that ~17% of the respondents reported that they’re stepping up their programmatic buying for TV advertising – which may be an interesting portent of the future.

Lastly, the survey revealed little change in the types of challenges respondents face about programmatic ad buying – namely, how to target the right audiences more effectively, how to measure results, and the need for better technical and operational knowledge for those charged with overseeing programmatic ad efforts inside their companies.

More information and findings from the 2018 D&B report can be viewed here.

“Same old, same old”: Retailers are sending the same e-mails to the same people.

As with so many aspects of marketing these days, data segmentation is key to the success of retailers’ sales efforts.

E-marketing may well be the most cost-effective method for reaching customers and driving business, but a recent analysis by Gartner of retail e-marketing activities shows that many retailers are employing tactics that are neither well-targeted … nor particularly compelling.

The Gartner analysis was performed earlier this year and published in a report titled Discount Emails — The New Playbook.  The analysis covered more than 98,000 e-mail campaigns conducted by 100 national retail brands.

Trumpeting discounts is one of the oldest tactics in marketing, of course, so it comes as little surprise that those sales messages are pervasive in e-marketing as well.

In fact, Gartner finds that more than half of all e-mail campaigns by retailers feature discounts in their subject lines.  Those discount messages are typically sent to nearly 40% of the retailers’ e-mail list — meaning that discount messaging targets broad segments of customers.

Gartner finds that those discount offers generate a ~16% open rate, on average.

Contrast this with retargeting and remarketing e-mails. They make up a much smaller fraction of the e-mail volume, but pull much higher open rates (around 31%).  Abandoned shopping cart e-mails generate an even higher average open rate of 32%.

“Welcome” e-mails tend to do well, too — in the 25% to 30% open rate range.

Gartner’s conclusion is as follows:

“Brands that employ less frequent, but timely, relevant e-mails triggered by customer site engagement or transaction outperform their peers.”

Gartner also found that the average national retail brand has more than 25% of its e-mail database overlapping with other national retailer e-lists, making it even more important for brands to differentiate the language of their e-mail subject lines and to engage in more data-driven e-mail targeting in order for their marketing to stand out from the pack.

Let’s see if the national retail brands get better at this over the coming year.

Are there fewer (but more relevant) ads in our future?

A new theory in the MarComm field is the notion that the future of advertising is one where people are confronted by less advertising – but the ads that are presented to them will be more relevant to their interests.

I’m pretty sure about the second part of that … but not so sure about the first bit.

Certainly, “fewer, more relevant ads” don’t appear to be what’s happening at the moment.

Think about the plethora of digital screens these days – not just smartphones and tablets and such, but also the ones on gasoline station pumps, in taxis, on airline seatbacks, in kiosks and on the sides of buildings – and it’s pretty clear that many more ads are being displayed to more people in more places than ever before.

Of course, many of these ads are selling products or services that are of little or no interest to most of us. Some people respond by blocking ads on their own personal devices, doing what they can to mitigate the onslaught.

As well, people seem to like the idea of commercial-free TV to the degree that quite a few are willing to pay for video-streaming services like Netflix and Amazon Prime Video that provide content to them without all of those pesky ads embedded within.

It’s also true that advertising and media platforms are becoming ever “smarter” and more data-driven, giving them the ability to replace mass-reach ads with ones that are customized to some degree so that different people see different ads. It isn’t a stretch from there to the notion that because these ads will yield better results for media platforms, total ad loads can be reduced while still increasing consumer engagement.

This idea is leading some people to predict that in the coming few years, consumers will experience significant change in how many ads they see and how relevant they’re likely to be.

In response to that, I have two counter-thoughts. The first is that with all of the buying choices that people have today — more than ever before — brand loyalty is being eroded.  And with less brand loyalty, advertisers need to stress “recency” – being the last message a consumer sees before purchasing a particular product or service.  This leads to the compulsion for advertisers to “be everywhere all the time” so that theirs is the last message the consumer sees before taking action.  It’s hardly in line with “fewer, more relevant” ads, unfortunately.

The other issue pertains to the basic economics of advertising. Fewer ads will happen only if their increased relevance is accompanied by a commensurate increase in their price.  I don’t see that happening anytime soon either, unfortunately.

Besides, heightened ad “relevance” isn’t really enough to overcome the issue of audience aversion and avoidance. On that score, fundamental attitudes have never changed:  The consumer’s relationship with advertising has always resided somewhere between “passive ennui” and “managed hostility.”

Today, of course, consumers can do more to “manage their hostility” to advertising than ever before, creating even more of a challenge on the ad revenue front.

What do you think? Are we indeed moving to an era of “fewer, more relevant” ads … or will we continue to deal with merely a more contemporary version of “all advertising, all the time?”  Please share your thoughts with other readers below.

Blogging and social media in B-to-B marketing: Continually falling short.

As a MarComm specialist and head of a marketing firm for several decades, I’ve worked with my share of marketing tactics — the tried-and-true ones as well as the “next new things.”

Along those lines, working with numerous B-to-B companies in their attempts to turn social media and blogging into significant sources of new business, the track records have been more often ones of failure than of success.

I think the issue boils down to something pretty fundamental: Unlike consumer products, where customers can fall deeply “in love” with particular brands, or at the very least develop feelings of brand affinity, in the world of business products and services, the brand dynamics are seldom “emotional.”

The reality is, business buyers are looking for products and services that will solve their problems and also provide all-important CYA peace of mind. Few B-to-B buyers are truly “excited” about these purchases, and they aren’t personally “invested” in the brands in question, either.

Instead, they’re looking for solutions that work. Ones that deliver on a checklist of criteria, and ones that don’t risk unpleasant developments down the road.

In such a world, the notion that buyers are waiting around to read the and interact with the next blog article or social media post that’s published by a supplier is fanciful at best.

News flash: The target audience doesn’t care about things like that.  Business buyers don’t have time in their busy schedules to read the posts.  The few times they will is when they need to satisfy a business need and are looking for information to help them make an informed buying decision.

But of course, it’s precisely then when content needs to be easily findable on the web. Brands that have published deeper and more relevant content than their competitors are going to be the ones that show up on search engine results pages (SERPs), because those are the websites the search engines reward with higher rankings based on the perceived “relevance” of the web pages in question.

This view of B-to-B audience dynamics isn’t just my personal one; survey research of B-to-B buyers reveals similar attitudes.  For instance, market research and communication firm KoMarketing publishes an annual B2B Web Usability Report, and the findings they uncover are consistent:

  • Most B-to-B buyers don’t think a blog adds much to a supplier’s credibility as a company.
  • As for social media activity, three-fourths of buyers find such platforms irrelevant to their interests and concerns.

So, what is it that buyers are seeking?

It’s more “actionable” data such as sales contact information (who to call), a list of customers a supplier serves (addressing the credibility factor), plus customer testimonials, case studies and similar reports that help buyers “see” themselves in the experiences of other customers.

That’s pretty much it.

Which brings us back to blog posts in the B-to-B realm. Informative articles that center on customer testimonials and before/after case studies provide the best of everything:  content that buyers will actually find useful, along with the “relevance” and “robust activity” that search bots are seeking in making their quasi-mysterious calculations on how high to rank a particular web page on SERP pages.

It dovetails with my typical advice to business clients:

  • Don’t publish blog posts because you expect people to read them like they would a newsfeed. Publish them for relevance and visibility when your prospect is actually seeking out information and insights — which could be months or even years after you publish the post.
  • Make sure each blog article addresses “problem –> solution” topics centered on the challenges your customers are most likely to face.
  • Twitter or Facebook? Unless your marketing have plenty of time on their hands and nothing better to do, don’t bother with these social platforms at all — because the payoff is so mediocre.

What about you? Are your B-to-B marketing experiences different?  If so, please share your perspectives in the comment section for the benefit of other readers.

Celebrity endorsements run out of steam.

“Paid product endorsements are meaningless. I want to learn about the product from experts who are advocating for it – not just some random person who happens to have a job that makes them well-known.” 

— Consumer panel participant, ExpertVoice, May 2018.

The next time you see a celebrity spokesperson speaking about a product or a service … don’t think much of it.

Chances are, the celebrity isn’t doing a whole lot to increase a company’s sales or enhance its brand image.

We have affirmation of this trend in a report issued in June 2018 by marketing firm ExpertVoice, which recently investigated a Census-weighted audience of ~500 U.S. consumers on the issue of who consumers trust for recommendations on what to buy.

The findings confirm that while celebrity endorsements do raise awareness, typically it fails to move the needle in terms of sales. In fact, just ~4% of the participants in the ExpertVoice research study reported that they trust celebrity endorsements.  (And even that percentage is juiced by professional athletes who are more influential than other celebrities.)

As for the reason for the lack of trust, more than half of the respondents noted that their greatest concern is the monetary compensation given to the people from the brands they’re endorsing. Consumers are wise to the practice – and they reject the notion that the endorser has anything other than self-dealing in mind.

By way of comparison, here are how celebrities stack up against others when it comes to influencing consumer purchases:

  • Trust recommendations from friends/family members: ~83% of respondents
  • … from a professional expert (e.g., instructor or coach): ~54%
  • … from a co-worker: ~52%
  • … from a retail salesperson: ~42%
  • … from a professional athlete: ~6%
  • … from any other kind of celebrity: ~2%

A big takeaway from the ExpertVoice research is that more people are influenced by individuals who are making recommendations based on actual experiences with the products in question. Moreover, if it’s people they know they know personally, they’re even likelier to be swayed by their opinions.

In a crowded marketplace full of many purchase choices, consumers are looking for trusted recommendations. That means something a lot more authentic than a celebrity endorser.  Considering the amount of money companies and brands have historically had to pony up for celebrity pitches, it seems an opportune time for marketers to be looking at alternative methods to influence their audiences.

Click here for more information regarding the ExpertVoice research findings.

GDPR: What’s the big whoop?

This past week, the European Union’s General Data Protection Regulation (GDPR) initiative kicked in. But what does it mean for businesses that operate in the EU region?

And what are the prospects for GDPR-like privacy coming to the USA anytime soon?

First off, let’s review what’s covered by the GDPR initiative. The GDPR includes the following rights for individuals:

  1. The right to be informed
  2. The right of access
  3. The right to rectification
  4. The right to be forgotten
  5. The right to restrict processing
  6. The right to data portability
  7. The right to object
  8. Rights in relation to automated decision making and profiling

The “right to be forgotten” means data subjects can request their information to be erased. The right to “data portability” is also a new factor.  Data subjects now have the right to have data transferred to a third-party service provider in machine-readable format.  However, this right arises only when personal data is provided and processed on the basis of consent, or when necessary to perform a contract.

Privacy impact assessments and “privacy by design” are now legally required in certain circumstances under GDPR, too. Businesses are obliged to carry out data protection impact assessments for new technologies.  “Privacy by design” involves accounting for privacy risk when designing a new product or service, rather than treating it as an afterthought.

Implications for Marketers

A recent study investigated how much customer data will still be usable after GDPR provisions are implemented. Research was done involving more than 30 companies that have already gone through the process of making their data completely GDPR-compliant.

The sobering finding:  Nearly 45% of EU audience data is being lost due to GDPR provisions.  One of the biggest changes is that cookie IDs disappear, which is the basis behind so much programmatic and other data-driven advertising both in Europe and in the United States.

Doug Stevenson, CEO of Vibrant Media, the contextual advertising agency that conducted the study, had this to say about the implications:

“Publishers will need to rapidly fill their inventory with ‘pro-privacy’ solutions that do not require consent, such as contextual advertising, native [advertising] opportunities and non-personalized ads.”

New platforms are emerging to help publishers manage customer consent for “privacy by design,” but the situation is sure to become more challenging in the ensuing months and years as compliance tracking the regulatory authorities ramps up.

It appears that some companies are being a little less proactive than is advisable. A recent study by compliance consulting firm CompliancePoint shows that a large contingent of companies, simply put, aren’t ready for GDPR.

As for why they aren’t, nearly half report that they’re taking a “wait and see” attitude to determine what sorts of enforcement actions ensue against scofflaws. Some marketers admit that their companies aren’t ready due to their own lack of understanding of GDPR issues, while quite a few others claim simply that they’re unconcerned.

I suspect we’re going to get a much better understanding of the implications of GDPR over the coming year or so. It’ll be good to check back on the status of implementation and enforcement measure by this time next year.