Traditionally, the lion’s share of online ad spend has ended up in the pockets of two of the biggest marketing services in the world, Google and Facebook. Google Display ads, which are targeted according to web content, theme and client preferences, and Facebook ads, targeted through location, demographic and profile information, have always had above-average marketing clout, since the two services boast such a colossal reach between them.
With businesses struggling to make ends meet under the constant threat of government shutdown, and with their customers feeling wary and cash-strapped, the recent IPA Bellwether report for Q3 has found that marketing budgets remain under pressure. Businesses reported lower budgets in each of the seven monitored marketing categories due to reduced cash flow, leading to sharp declines in ad spending across all monitored categories. As for the coming months, the latest Advertising Association/WARC Expenditure Report predicts that revenues will fall 10.5% year-on-year, while UK ad spend will fall by 6.7%.
It will therefore be important, as the pandemic drags on, for businesses to try and achieve extra good results from their advertising efforts, to make up some of their losses, while spending less than they would usually expect to. Since online advertising usually eats up a sizable chunk of the marketing budget, looking for ways to cut this share is a good place to start the economy drive. After all, a recent Gartner CMO Spend Survey found that CMOs spend nearly a quarter of their marketing budget on digital advertising, with 78% predicting that they will spend more on digital advertising in 2021, while 69% predict that they will spend more on paid search.
Why are Google and Facebook such important advertising outlets?
The reason costs of online advertising are so high, as previously mentioned, is due to the power of certain popular marketplaces. Facebook has 2.7 billion monthly active users, making it the biggest social media network in the world, while Google Display Network has over 2 million sites and reaches 90% of the people using the internet, serving more than a trillion impressions to over 1 billion users every month. So, it’s very hard for marketers to ignore these giants, a fact that empowers Google and Facebook to name their price.
Now, with so many people stuck at home, these two technology giants have become more dominant than ever, as customers who would normally prefer to frequent brick-and-mortar stores have fled from the high street in droves and become patrons of online stores instead. In fact, new research from ParcelHero has suggested that online spending in the UK will outstrip high street sales for the first time this Christmas. Online advertising has thus become the only reliable way of attracting customers’ attention, with billboards, station or tube advertising and in-store displays going largely unheeded, with the result that costs are rising at a great rate.
It will therefore be tough for businesses to make the necessary cuts, while still maintaining visibility in an unusually crowded online market. But one way to reduce spend on Facebook and Google will be to make the most of company data, to maximize the impact of each Facebook or Google ad, so that the same or better revenue can be achieved using less ads.
How brands are improving their advertising efficiency
Like many retailers, one of BlueVenn’s upmarket retail customers, which holds data on 27 million customers, has long used Google and Facebook for advertising and acquisition. Also like many brands, they have known that this advertising could be more efficient. Our new Omnichannel Marketing Excellence report found that, out of 235 organizations that responded from all over the world, just 30% had a coordinated, strategic approach to content or inbound marketing across all (paid, earned and owned) media channels. That means 70% of the respondents had no such capabilities, with 49% reporting they had no way to synchronize and coordinate online and offline customer acquisition activity either.
Advertising costs are a substantial but necessary expense, and these unprecedented times have spurred our customer on to rethink how it works with Google and Facebook, and how it can better use first party data and multichannel customer transaction records to create more targeted audiences for ad campaigns. However, Google and Facebook, for all their advertising clout, are “walled gardens” when it comes to integration. While they work well to execute campaigns, messages and advertising within their own siloed systems, they don’t exchange data, beyond conversion information, with other platforms to facilitate the creation of cross-channel campaigns.
Granular segmentation, to enable the selection of audiences who are most likely interested in a particular message or product, is not their business. Instead, their advertising relies on reaching the largest number of people possible. Marketers can manually import information to Google and Facebook, but it’s hard for them to then refine those audiences (for example, to suppress customers who have recently made a purchase for the advertised offer).
Bringing together siloed customer data, including all purchase information (online and offline), is BlueVenn’s bread and butter, so our customer invited BlueVenn to find a solution to help it manage its advertising audiences. The result is a connector to both Google and Facebook, which allows our customer to use BlueVenn’s segmentation and audience building capabilities to synchronize an audience with the ad platforms. It enables the creation of hyper-targeted, look-a-like anonymous audiences for acquisition, or to serve ads to in support of cross-channel campaigns, as well as the suppression of customers in near real-time, based on transactions and other variables.
This increases the chance of achieving a good ROI, since the right message is served up to the right audience, improving the odds of a purchase whilst also cutting the size of the audience being advertised to. Less money spent on campaigns means more profit gained with each new transaction (leading to sizable efficiency savings within ad budgets)!
Whatever they claim, not every conversion is attributable to the advert
A good example of misplaced attribution is when purchasers use a loyalty card to verify a purchase in-store, or when an online purchase is completed later, for example through a mobile app or mail order, rather than at the first click of an advert.
After all, most conversions occur outside of the advertising space, as relatively few people click on an advert and buy immediately. However, due to the “walled gardens” already mentioned in this blog, if Google and Facebook don’t know about an offline conversion, or do not understand any additional channels leading to an online purchase, then they will either fail to attribute offline success to an ad, or will over-emphasize their own online conversion successes. Often, people prefer to go away and research a product once their awareness is raised, so being able to prove a purchase, independently of a Google link or a social impression, can be a distinct advantage and lead to better attribution of sales.
Being able to track all conversions, from all online and offline sources, means BlueVenn allows our customers to exclude these purchasers individually from the target audience for further campaigns. Furthermore, more accurate multi-touch attribution can be achieved within the CDP, rather than through the ad platforms. Not only does this lead to greater savings, since a person who has just bought is very unlikely to want to buy the same product again straight away, but also avoids peppering customers with unnecessary adverts that do not provide a great customer experience. A CDP ensures the marketing team has a better understanding of how to allocate advertising and wider marketing budget in the right areas.
A unique opportunity for marketers needing to maximize their advertising budget
BlueVenn can now combine these connectors to segment audiences for Facebook and Google, as well as remove people who convert, and provide the necessary attribution models to support marketing decisions. Our ability to synchronize all marketing channels, online or offline, into one interface, enables marketers to deliver truly omnichannel offers and customer experiences. Powered by a Single Customer View, our marketing hub gives marketers the chance to benefit from accurate conversion attribution and optimize their advertising spend accordingly.
If you’re looking to optimize your ad spend and want to enjoy the same benefits as our customers, you can register for the next live webinar demo to see BlueVenn in action, or request a personal demonstration that focuses on your individual requirements from a Customer Data Platform.
Register for the next live demonstration of the BlueVenn Customer Data Platform & omnichannel marketing hub
- Unifying data to create a Single Customer View.
- Improving customer intelligence with data analytics.
- Using machine learning and Next Best Action.
- Segmentation and RFM modeling.
- Omnichannel customer journey optimization.
- Multi-touch attribution.