More than a century ago the American retail pioneer John Wanamaker was quoted as saying ‘Half the money I spend on advertising is wasted; the trouble is I don’t know which half,’ and the same is true today. But another consideration is that many global advertisers do not have full visibility of how much they are spending, much less what is the most effective.
Global media investment is a big business. Despite the turbulence of recent years, 2021 ended positively, with total global advertising spend increasing and hitting $763 billion.
While we can view this with optimism, new challenges are on the horizon and brands must continue to ask themselves: is an increasing spend delivering an effective return? Back in 2018, industry giants P&G and Unilever slashed their digital media spend following a focus on spend transparency revealing previous levels of spend in digital was largely wasteful (if we define wasteful as adverts not being seen by actual people – let alone a defined target audience). Yet the result was unexpected: there was little perceptible change in their media performance. Even the world’s biggest global advertisers struggle to manage the myriad of different media data sources that surround their billions of media spend.
It is estimated that brands could be wasting as much as 40% of their entire media spend. Data sits all over the world, in many spaces and many different platforms. Given the reams of data available to brands, it feels impossible that such large sums of money might be being wasted. But it is very hard indeed to accurately understand the detail within this – if brands do not know how much, or where, they are spending money in the first place.
There is a simple reason for the lack of transparency here – and it is a human reason. A lack of knowledge running hand in hand with an avoidance in taking responsibility for that lack of knowledge, has created an uneasy status quo. No one likes to admit they don’t know the answer to a critical question they should be able to answer – especially something seemingly so simple (“to the closest million, how much am I spending on media each year?”). Yet as an industry we seem to have given ourselves permission and instead, simply accepted that we are bad at it.
Face the facts
Any media person should be able to tell their CMO how much they are spending, yet it is common for them not be able to answer this question. Even if this same person is willing to put aside the guesswork and drill into the figures, it can take weeks to get hold of and then combine, with any semblance of accuracy, the spreadsheets scattered across the world, to gain the insight needed.
For brands, the reality is media planning and buying is a local activity so for the global, or even regional team, the data sits in hundreds of different systems globally and will have been touched by thousands of different people. Pulling all this together is incredibly time consuming and labour intensive – it is little wonder many simply guess, and calculate spend to the nearest million.
Despite being an industry so tightly tied to the power of digital, advertising is one of the last to harness the power of technology fully when it comes to media data and having a single source of data truth.
Grasping the nettle
The first step to gaining visibility on true media spend is to admit you do not have it (yet). There is an industry wide embarrassment over media spend opacity, and so as a result, it gets swept under the rug.
The second step is conducting a media data audit. Not only is it imperative to know what data is held, but also why it is being held. Does it serve a purpose? Or is it being held ‘just in case’? Shedding superfluous data can help brands achieve their objectives – whether this is a faster turnaround in marketing mix modelling (MMM) or discovering at greater pace, if agencies are genuinely delivering against their media investment guarantees.
It is at this point that that brands can start to think about what software they might use to get what they need. The key is remembering software is a tool that must fit your needs – you can have the best hammer in the world, but if you want to put in a screw it’s useless.
The same applies to media data management systems. There may be an impressive number of features available, with extraordinary granular insight, but not all of these features may be relevant to the specific goals a brand is looking to achieve.
The best software solutions can be tailored to show what brands really need to know, and what they would like to know, giving them a clearer view of all their data in order to find extra value. The advice of a neutral adviser can be invaluable when choosing software features.
Finally, brands need to recognise that local markets work in different ways. Teams spread over the globe can work on different systems, using different taxonomies in a different language. Trying to create standardised ways of working across global teams always leads to greater confusion; creating clear and reliable data starts by building global solutions on local foundations.
Global brands cannot compete in today’s market with millions of pounds of their media spend going unaccounted for; as an industry, we have to shed the fear of the unknown. The aim of all brands should be to construct a single source of media truth – a data source that can be trusted by all stakeholders. This data should be a company’s most valuable asset, and ensuring timely access, ownership and portability will help construct the full picture of all media investments. Only with this clear line of vision can brands begin to make better business decisions.
Marianne Yallop is global head of client services at Redmill Solutions.