CMOs Say Digital Marketing Is Most Effective: Nielsen Study - Broadcasting & Cable

CMOs Say Digital Marketing Is Most Effective: Nielsen Study

Most plan to increase spending on digital and analytics
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Chief marketing officers give digital advertising higher marks for being effective than traditional media, including television, according to a new study by Nielsen.  

But while the world seems awash in data, few of the CMOs were confident in their ability to actually measure return on investment for their advertising. Some 81% of CMOs agreed that media owners should be held accountable for campaign performance.

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"Digital ad spending has eclipsed traditional channels and we expect that trend to continue,” Nielsen said in the report.

When forecasting the next 12 months, 82% of respondents expect to increase their digital media spend as a percentage of their total advertising budget. 

Respondents expect, on average, a 49% increase in digital media budgets in the next 12 months--a big number to consider during this upfront season. And some respondents reported even higher increases.  

By comparison, only 30% of respondents plan to invest more in traditional media channels in the near term.

More than 51% of respondents rated linear television as either highly or extremely important. A full 30% of respondents rated TV as “extremely important.” No other traditional channel reached 10%.

But only 13% said TV was extremely effective. By contrast, 31% called social media and search extremely effective, with 27% saying mobile is extremely effective. Programmatic was seen as extremely effective by 21%.

Nielsen, NYC Tech Hub (lobby)

Nielsen's NYC Tech Hub

“Our research suggests that while traditional media isn’t perceived as being as highly effective as digital, it’s important to understand that measures of effectiveness are relative,” Nielsen said. “Campaign objectives should be aligned with the media types proven to best support specific campaign performance goals. As many of our interviews with CMOs pointed out, the traditional channels evaluated here align well with mid- and upper-funnel brand building, which is critical to increasing the size of the prospective new customer pie.”

The CMOs said they were most concerned with improving media efficiency by limiting advertising waste across the digital ecosystem. The top three capabilities they chose to make this happen were: reach and frequency measurement (82% rated it the most important capability), ad viewability (73%), and data management platforms (62%).

“There is good news here for media agencies, as 43% of respondents plan to increase spending with their agencies over the next 12 months. This is likely due to their confidence in the agencies’ ability to deliver a strong return on investment, as reported by 84% of respondents,” Nielsen said.

In terms of measurement, only one in four marketers reported high levels of confidence in their ability to measure the ROI of their media spend, regardless of type, or their trade spend. “Not surprisingly, 79% expect to increase their investment in marketing analytics and attribution in the next 12 months,” the report said.

“Since the advent of the internet, fueled by available high-speed broadband and ignited by the proliferation of smartphones, marketers have more access to consumers than ever before. We are awash in data and should be living in a nirvana of actionable insights,” said Eric Solomon, Nielsen Watch senior VP, marketing and strategy, the report’s author.

“The reality, however, seems disconnected from this promise," he continued. "Over the last 18 months, some of the largest and most influential advertisers in the world have spoken up about their concerns with digital advertising, calling the supply chain 'broken' and pointing to high incidence of fraud and lack of brand safety."

In Nielsen’s first survey of CMOs, “we came away with a sense that we are in the midst of a slow but inevitable change — an evolution, not a revolution," Solomon added. "Marketers are leaning into the data, tools and capabilities available today. And while they do not always deliver as hoped, their willingness to invest and experiment — while incorporating the tried and true — continues."

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