Role Of Digital In Media Mix: Understanding Digital Marketing And .
Role of Digital in Media Mix:Understanding Digital Marketingand Getting it Right
Why digital media matters?Digital media is taking theworld by stormDigital media is fast becoming a favoritewith marketers. By 2017, digital advertisingis estimated to be worth 171 Billion,accounting for more than a quarter ofglobal advertising spend. This representsa 70% increase from current levels1. In theUS, ad spend on the Internet overtook allmedia except broadcast television in 2011(see Figure 1).It is not without reason that digitaladvertising is growing so rapidly. Superiortargeting and tracking allow it to achievea higher ROI than traditional media. Forexample, when Havas Media1 launched aWeb/TV campaign for a food sector client,the Web-based campaign generated aROI of 170 against 100 for TV (see Figure2). This was despite the campaign’s heavyreliance on TV which accounted for 87%of the budget, while the remaining budgetwas invested in the Web.The TV campaign accounted for anincrease of 8% (33 tons) in sales. TheWeb campaign led to a 2% (8 tons)increase in sales, despite an investmentof little over one-tenth of the TV budget,leading to much higher ROI compared toTV.Adoption of digital mediahowever is still in its earlystagesMarketers are starting to get convincedof the benefits of digital. However, manyare unsure about the level of importanceto give to the medium. This hasprompted a cautious approach towardsdigital media wherein marketers test thewaters by investing a small proportion ofcampaign budget in digital media. Forinstance, 70% of campaigns carried outin 2011-2012 by Havas Media investedless than 10% of their budget in digitalmedia (see Figure 3).Amongst the biggest concerns formarketers is the lack of proper metricsthat will help them determine the rightmix between traditional and digital media.For instance, a survey conducted by theAssociation of National Advertisers in theUS indicated that over 62% of marketersfeel that the inability to prove ROI is a topconcern2. The next biggest challenge mostmarketers face is in integrating marketingcommunications across channels, giventhe proliferation of digital channels, e.g.social media, mobile and online video,websites, email marketing and onlineadvertising.Marketers are starting toget convinced of the benefitsof digital. However, manyare unsure about how muchimportance to give to themedium.Figure 1: Advertising Revenue Market Share by Media — 2011, billionsBroadcast Television * 39.6Internet 36.6Cable Television ** 32.5Magazines *** 22.8Newspaper 19.4Radio 16.1Out of Home 7.5Video Games 0.8Cinema 0.7* Broadcast Television includes Network, Syndicated and Spot television advertising revenue.** Cable Television includes National Cable Networks and Local Cable television advertising revenue.*** Magazine includes Consumer and Trade magazines.Source: IAB Internet Advertising Revenue Report1 Havas Media, the media strategy division of the Havas Group, is the largest media group in France.2
Figure 2: Digital media delivers higher ROI than traditional mediaAdditional salesInvestmentCampaign characteristics: Activity sector: Food sector13%13%20%20%(8T)(8T) Budget: 1.15 MillionTVWeb80%(33T)87% Target: 26-49 year olds Media mix: 87% TV investment and13% Web investment (video)Description:In a mixed TV/Web campaign, Web drives20% of additional sales with an investment of13% of the campaign budget. Web has ahigher RoI(170) than TV (100).WebRoI 170TVRoI 100Source: Havas Media/2MV, impact of multi-media campaigns on individual buying behaviors70% of campaigns carriedout in 2011-2012 investedless than 10% of theirbudget in digital media.The growing popularity of digital channelsis creating challenges for marketers inallocating budgets. Key among thesechallenges is the need to assess wherethey must put their advertising budgets—traditional or digital, the mix in which theyshould do so.digital media, as well as its contribution to amultimedia plan. In this paper, we highlightwhy marketers must pay close attentionto digital media and how it can help themachieve higher ROI by complementingtraditional advertising. We conclude witha set of actionable recommendations ongetting digital marketing right.Capgemini Consulting conducted ajoint study with Havas Media seekingto highlight some of the proven results ofMedia Budget Index (average budget 100)Figure 3: Dispersion of Havas Media campaigns by digital budget, 2012400350300250200150Average campaign budget100500%20%40%60%8000%Proportion of digital as a percentage of the total budgetSource: Havas Media3
How Can Digital ComplementTraditional Media?Digital media helps marketers to expandreach, target audience better, andreinforce brand communication (seeFigure 4).Figure 4: Advantages of digital over traditionalDigital ReinforcesCommunicationDigital expands reach ofbrand communicationDigital media helps marketers increasetheir target coverage. It achieves this byreaching out to the online population inaddition to those tuned in to traditionalmedia, including ‘Zero TV’ householdswhich are estimated at 5 million in theUS.Digital Expands ReachDigital Targets BetterSource: Capgemini Consulting AnalysisOur research indicatedthat when 20% of budgetis invested in onlinevideos, coverage increasesby an average of 5percentage points.Our research has shown that in caseswhere 20% of the campaign budget isinvested in online videos, the coverageof the campaign increases by 5percentage points as compared to acampaign with 100% budget allocationto traditional media (see Figure 5).Including digital media in a multi-channelmarketing plan increases the numberof exposures to the brand. Consumerscommunicatingthroughtraditionalmedia feel more engaged with the brandwith the addition of digital media. Thishelps drive overall brand salience andprovokes engagement.Total TV / Online Video campaign coverageFigure 5: Investment in digital drives coverage82%Campaign characteristics:80%78%78%76%76% Target: Housewives with childrenunder 15 575% Budget: 700,000 Media mix: TV/Video74%74%72%70%0%5%10%15%20%Share of Online video in the campaignCoverage rate of a 100% TV campaignCoverage rate of a mixed TV and Web campaignSource: Havas Media4 Activity sector: Fast MovingConsumer Goods79%25%
more time online makes them easier toreach via digital media.62% of smartphoneowners have researchedon their device afterseeing an offlineadvertisement.Our research with Havas Media clearlyproved it. For the AB population, acampaign that had a mix of 70% TV and30% digital investments saw the digitalROI higher by 20% than that of TV (seeFigure 6).Situation-based targetinghelps digital generatebetter responseDigital media is strong indemographic targeting,particularly for youngadults and uppersocio-professionalsRecent research shows that nearlyall ( 98%) affluent Americans use theInternet, with the time spent onlineaveraging more than 30 hours per week.Within this category, those aged 18 to29 years averaged more than 40 hoursa week online3. The propensity of peoplein these demographic profiles to spendBehavioral and contextual targetingallows digital to reach target audienceaccording to interest levels. This leadsto better engagement and response.Location-based targeting using GPS/location data is another effective wayto reach consumers. It ascertains theconsumer’s location and promotesnearby outlets. Research indicates thatmobile campaigns leveraging locationtargeting outperformed non-locationtargeted campaigns by a factor of twotimes4. Using location targeting withpast behavior data can effectively drivefootfalls. For instance, Uncle Bob’s selfstorage used location targeting in the USto reduce acquisition cost of customersand increase business. The campaignreduced customer acquisition costby one-third and trebled reservationvolumes (see Figure 7).For the AB population,a campaign that had amix of 70% TV and 30%digital investments sawthe digital ROI higher by20% than that of TV.Figure 6: Digital is significantly better than traditional media at targeting select demographicsCampaign characteristics:Investment Activity sector: Fast MovingConsumer GoodsAdditional sales Target: AB population33%(160T)30%70%67%330TTVWeb Budget: 1 Million Media mix: 70% of TV investments and 30% ofdigital investments (catch up TV, streamingvideo, banners)DescriptionTVTVRoI100RoI 100WebRoI 120In a campaign targeted at the AB population, 70%investment was made in TV and 30% in Web. TheTV campaign led to 6% increase in sales comparedto 3% for Web. This implies that Web yielded asignificantly higher ROI than TV, yielding higher salesper unit of investment (Web yielded additional salesof 5.3 tons for an investment of 1000 Euros vs. 4.7tons for TV).Source: Havas Media5
Figure 7: Location targeting helps reduce cost of customer acquisitionOne of the leading self-storage companies in the US with over 400 facilities in 25 StatesBuffalo, New YorkGoalsDecrease cost per acquisitionGrow reservation volume (online or phone)Grow move-in volumeResultsIncreased reservation volume by 361%Increased move-in volume by 345%Decreased cost per action by 34%ApproachTwo-tier desktop and mobile campaigns structureLocation targeted campaigns at the state, city, or radius levelNational campaigns with geo-modified keywordsLocation targeted headlines, display URLs, and landing pagesOptimizing via geographic reportsSource: Webmetro WebsiteDigital media reinforcesbrand communicationBrand communication is reinforcedwhen sent across multiple channels, asconsumers interact with print, online,mobile and broadcast outlets (see Figure8). For instance, a TV ad may directconsumers to the company’s website,where display ads and dedicated productpages on the site provide additionalinformation. Here, the digital channelreinforces the TV communicationand further builds upon it. A researchconducted in Finland showed that 62%of smartphone owners have researchedproducts on their device after seeing anoffline advertisement5. Research showsthat combining TV and online channels inadvertising campaigns has a significantlyhigher impact on brand image andpurchase intention as compared to usingeither in isolation6.In the next section, we take a look atsome steps that can help marketersachieve the most from digital media.Figure 8: Digital reinforces brand messagingOutdoorTVPrintRadioDigitalSource: Capgemini Consulting Analysis6
How to Get Digital Marketing Right?Identify saturation point intraditional advertisingIn any media, incremental advertisingbeyond a threshold becomes progressivelyless effective in achieving campaignobjectives. Beyond this threshold or‘saturation point’, the responses produced(sales, recruitment) do not justify the costinvolved. This is also known as ‘advertisingwear out’.One of the ways to avoid ‘advertisingwear out’ is to determine the ‘saturationpoint’ in traditional media and shiftfurther marketing spend to digital media.The ‘saturation point’ in traditional mediacan be measured through conventionalmodels such as Adstock, whichmeasures how response to advertisingbuilds and decays in consumer markets(see Figure 9).‘Saturation point’ can also be measuredby determining the ‘maximum effectivefrequency’, or the number of exposuresto an advertisement beyond which anyexposure will not generate a positiveresponse. This can be determinedby creating a model that considersfactors such as category clutter2, brandcredibility and product features. A highlycluttered category implies the need formore exposures due to the multiplicityof available choices. On the contrary,high brand credibility and innovativeproduct features will reduce the numberof exposures required due to high recallvalue.Let’s take the case of advertising in theconsumer packaged goods industry. TVbegins to have an effect after 2-3 contacts,but the saturation point is reached after8-10 contacts. The ROI of TV couldbe improved by slightly decreasing itsintensity once the saturation level hasbeen reached. The freed-up budget canbe invested in digital media, and cantherefore, improve the ROI of the overallcampaign (see Figure 10). The significantdifference between the TV and WebROIs can be explained by the fact thatTV is often pushed past its saturationthreshold, which significantly lowers itsROI (the ROI is more than halved vs. theoptimal intensity zone), while the modestWeb intensity places the media in itsmaximum effectiveness zone.Determine the correctallocation of digital inmedia mix‘Saturation point’ in traditional mediais a trigger for using digital media.However, marketers need to consider Target audience profile, i.e., theircomfort with and time they spend ondigital media. Effectiveness of digital media inreaching the target audience overtraditional media. Campaign budget andreaching the audiencecostof Response window, i.e., whether theresponse is required in the short/longtermCoca-Cola recently adopted the ‘7020-10’ approach to investing in creativecontent wherein 70% investmentwould be in low-risk “bread-and butter”content, 20% would be in innovatingaround ‘what works’ and 10% would bein high-risk content including untestedideas7. This represents the adaptationof a business resource managementmodel to communications management.However, this model can also be used fordeciding the media mix of a campaign.Figure 9: Measuring saturation point in advertising: AdstockDecayRateSaturation ThresholdUse digital in campaignswhere traditional mediahits saturation pointAdvertising beyond the saturation pointleads to poor or negative response.Digital can help improve ROI of theoverall campaign in such cases.multiple factors to determine the correctallocation of digital in the media mix (seeFigure 11). Some of these are as follows:Gross Rating PointDecay Rate: The rate at which the impact of an advertisement exposure on the consumer reduces over time.Gross Rating Point: The sum of individual telecast ratings of a program or advertiser commercial schedule.Source: Simon Broadbent - Journal of the Market Research Society, “One Way TV Advertisements Work”, 19792 Category clutter refers to the number of products available within the category.7
Figure 10: Impact of advertising on salesTVInternetOptimal pressure zoneOptimal pressure zone7%7%6%5%4%3%2%6%5%4%3%2%1%0%Current TV pressure650 Gross Rating Points0 1 2 3 4 5 6 7 8 9 10 11 12 13Number of TV contactsSource: Havas Media70% of the campaign budget can beinvested in ‘tried and tested’ channels,20% in social media and search enginemarketing, and another 10% in viralvideos. The choice of digital media canvary from company to company. Forinstance, a traditional manufacturingcompany may consider TV and printto be ‘tried and tested’, while for ane-commerce or online gaming company,social media could fall in the samecategory.Gain in salesGain in salesImpact of advertising on sales, by number of contacts with the target consumer (Campaign characteristics identical to previous case)1%0%Currentinternetpressure170 GrossRatingPoints0 1 2 3 4 5 6 7 8 9 10 11 12 13Number of internet contactsSome companies have gone one stepfurther and innovated using digitaltechnology. Nokia used cutting-edge4D projection mapping to launch Lumia800 where Millbank Tower, London, wasturned into ‘a series of startling animatedsequences’. This was accompanied bya live performance by musician andproducer Deadmau5. 145,000 peoplelogged in to watch the event live fromNokia’s Facebook page and its Facebookfan-base rose by 13% within two weeks.The brand’s awareness rose significantly,with discussions about the brand risingby two-thirds in the month immediatelyafter this launch. The official YouTube filmhas had nearly 4 million hits, with over1 million occurring within 4 days of theevent8.Focus on content andchannelMarketers need to develop ‘memorablecontent’ that consumers remember andshare with others, thus increasing theFigure 11: Factors affecting digital’s proportion in media mixA 70-20-10 approachbased on risk andinnovation wasadopted by Coca-Colafor apportioning itscommunication spend.Saturation pointin traditional mediaTarget audience profileCost per impressionReach of digital mediaDigital’s proportionin media mixRequired Impact –short/long termCampaign budgetSource: Capgemini Consulting3 Paid media refers to media purchased by the marketer such as display ads, paid search, and promoted tweets. Owned media refers to media owned by the marketersuch as corporate website and blogs, corporate social media profiles, permission marketing database, and mobile apps. Earned media refers to media earned by themarketer as a result of investment in paid and owned media.8
impact of advertising. Content also needsto be relevant to the delivery format. Forinstance, an existing TV commercial maynot work well on YouTube due to greaterdistractions and user’s ability to skip ads(5 seconds). Similarly, the print copy maynot be easy to reproduce on displaybanners due to constraints on bannersize and positioning.The choice of content should alsobe closely tied with choice of digitalchannel. Paid/viral video, display,social media, websites/micro sites andother digital media should be chosenbased on the campaign objectives andbudget. One of the ways to do that is tosegregate these media as paid, earnedand owned media3. The proportion ofpaid, owned and earned digital mediacan be determined based on time andbudget constraints. Owned and paidmedia are suitable for short time frames,while earned media is effective over alonger duration. Similarly, paid media isunsuitable for a low budget.Measure ROI with enhancedconversion modelsMarketers need to measure ROI for theinvestment they make in digital media.Current parameters for measuring ROIof digital media include click-throughrate and cost-per-thousand. Facebook‘likes’ and Twitter ‘follows’ are alsoused to justify investment, much like‘impressions’ and ‘Web traffic’.While it is relatively easy to find ‘whatconsumers did’, determining ‘why theydid it’ remains a challenge. For instance,consumers may be exposed to a displayad ten times on different websitesbefore they click on it. Out of every tenconsumers who visit the landing page,one may consider five products offeredby the company and buy one of them.Current measurement models willmeasure that the conversion rate forconsumers who are directed to the siteis 10%, and they will attribute the visitto the last display ad which was clickedby the consumers (last click attribution).However, this does not account for thecumulative effect of all the ads seenby the consumer. Also, the reasons forpreferring the purchased product overthe other considered products will notbe determined.Campaigns are created with a set ofbusiness objectives. These range from‘increase in sales’ to ‘increase in brandequity’ to ‘counter negative publicity’and so on. A campaign’s performanceshould be measured on the basis of itssuccess in meeting these objectives.Moreover, this performance should beoptimally attributed to the digital mediadeployed. This implies moving awayfrom traditional attribution models whereconversion is attributed to the ‘last click’,‘first click’ or ‘evenly distributed acrossclicks (linear)’, and creating a customizedmeasurement model.A good way to create a customizedmeasurement model is to look atthe ‘conversions’ or people whoseresponses are in line with campaignobjectives. Studying their digital trail willaid the understanding of what elementsof the campaign worked and what didnot work. The digital trail can be foundusing cookies that websites often installin consumers’ systems. Other factorssuch as social media mentions can alsobe considered while building such amodel.In summary, digital is a powerful mediumto engage with consumers. At thesame time, digital media is not a silverbullet to marketer challenges; it is acomplementary platform to traditionalmedia. Determining the right contributionof digital to the media mix will be criticalto the value generated for organizations.While it is relatively easyto find ‘what consumersdid’, determining ‘whythey did it’ remains achallenge.9
References1 Estimates based on figures from Magna Global, “Magna Global Advertising Forecast 2013”, December 20122 Association of National Advertisers, “ANA Survey Reveals Marketers Vying for New Media Validity”, July 20123 Mediapost, “Engage:Affluent - Annual Survey Reveals Growing Hunger For Content, Connectivity”, September 20114 Mobile Marketer, “Location targeting more than doubles performance of mobile ads: report”, February 20135 Google, “Our Mobile Planet”, May 20126 ThinkBox, “TV & Online: Better Together”, May 20087 Mediatel, “It works for Coca-Cola and Google and it can work for you too: the 70-20-10 rule”, November 20128 Driveproductions, “Nokia Lumia Live”, November 201110
AuthorsCapgemini ConsultingArnaud BouchardVice Presidentarnaud.bouchard@capgemini.comStanislas de RoysVice Presidentstanislas.deroys@capgemini.comDigital TransformationResearch Institutedtri.in@capgemini.comJerome Buvat (jerome.buvat@capgemini.com) and Amit Srivastava (amit.srivastava@capgemini.com) from theDigital Transformation Research Institute worked on this paper.Havas MediaThierry Fontainethierry.fontaine@fr.havasmedia.comArnaud Parentarnaud.parent@havasmedia.comAbout Havas MediaHavas Media, the largest media group in France, is the media strategy division of the Havas Group. With 3200 employees inover one hundred countries, Havas Media France includes the media consulting networks MPG and Euromedia, the interactivemarketing international network Havas Digital and Havas Sports & Entertainment, the agencies network dedicated to brand content(national and international production and distribution). 2MV, launched in 2009, is the Havas Media entity devoted to media andmarketing sales effectiveness and ROI measurement. 2MV proposes to French companies exclusive solutions designed to quantifyand improve their media and marketing ROI.About Capgemini and theCollaborative Business ExperienceCapgemini Consulting is the global strategy and transformationconsulting organization of the Capgemini Group, specializingin advising and supporting enterprises in significanttransformation, from innovative strategy to execution and withan unstinting focus on results. With the new digital economycreating significant disruptions and opportunities, our globalteam of over 3,600 talented individuals work with leadingcompanies and governments to master Digital Transformation,drawing on our understanding of the digital economy andour leadership in business transformation and organizationalchange.With more than 125,000 people in 44 countries, Capgeminiis one of the world’s foremost providers of consulting,technology and outsourcing services. The Group reported 2012global revenues of EUR 10.3 billion. Together with its clients,Capgemini creates and delivers business and technologysolutions that fi t their needs and drive the results they want. Adeeply multicultural organisation, Capgemini has developed itsown way of working, the Collaborative Business ExperienceTM,and draws on Rightshore , its worldwide delivery model.Learn more about us at www.uk.capgemini.comFind out more at:http://www.capgemini-consulting.com/Rightshore is a trademark belonging to CapgeminiCapgemini Consulting is the strategy and transformation consulting brand of Capgemini Group. The information contained in this document is proprietary. 2013 Capgemini. All rights reserved.
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