Cross Media: How Significant is the Opportunity?

In this third release from the roundtable series, the analysts offer their insights into the question of the size and scope of the much-discussed Internet-centric cross media marketing opportunity.

The analysts at a glance

Jim Nail, Senior Analyst, Forrester Research: Nail covers Internet marketing and advertising for Forrester Research, where his current research focuses on the role of the Internet in the overall media mix. Nail’s other areas of expertise include ad serving, targeting and tracking technologies, advertising formats, promotional tools, and email and media strategy.

David Hallerman, Senior Marketing Analyst, eMarketer: Hallerman is responsible for eMarketer’s widely-discussed annual Online Advertising report, which details the growth of the online advertising industry, emerging issues in the space, and the continuing convergence of online and offline marketing channels.

Rudy Grahn, Senior Analyst, Jupiter Research: Grahn covers online advertising for Jupiter Research, where he is a featured speaker at Jupiter’s annual Jupiter/IAB Online Advertising Forum, and focuses on online campaign measurement, analysis, and optimization, data management, and media buying and planning.

avant|marketer: There has been much talk over the last six months urging marketers that they must begin to see Internet advertising not as a standalone channel, but as the “active ingredient” in the overall marketing mix - one that serves to hold together and improve the effectiveness of the other channels in that mix. This whole discussion has gotten very general, with the research being released suggesting a wide range of different strategies. Based on your analysis of this varied discussion, when it comes to cross media marketing, where are the biggest emerging opportunities for the marketer, from an ROI standpoint?

Jim Nail (Forrester Research): The real opportunity isn’t in weighing which medium is better or is more efficient, or which has a higher ROI than another, individually - but instead, in optimizing the total mix.

There are two considerations with regards to optimizing mix that marketers need to get on top of. First, as the IAB Cross Media studies have begun to show, marketers often overspend on TV, so that the last dollars build more frequency than reach and so have lower impact than if they allocated the money to other media. In fact, Forrester proposed a concept called “impact points” to evaluate the efficiency of spending in one medium versus another to get the allocation right.

The second key to optimizing the mix is to link each medium to optimize consumers’ progress through the learning/decision process around the brand. Research has shown that online ads that are linked to offline ads thematically and graphically are more effective ... in other words, the online ad reinforces the messaging the offline ad planted in the consumer’s brain. And then, of course, the online ad can take the consumer beyond awareness into consideration, preference and even purchase, which is another critical synergy. Certainly, only a few consumers at any given moment in time are motivated and have the time to click through and engage with the brand. But they are incredibly valuable. So I believe every online ad should have a clickthrough, though clickthrough shouldn’t the primary metric for the online medium.

David Hallerman (eMarketer): It’s quite easy to agree that companies should increasingly incorporate cross-channel marketing into their media mix - but not just because it’s a way to optimize limited budgets. The fact is, as more and more people multitask, their daily diet of media changes, and the best ways to reach them are across channels. So just as the target audience might be going online and watching TV at the same time, multi-media marketing becomes an effective way to capture their fractured attention at each step of the way.

Certainly, companies market cross-channel today, but just as with permission email two years ago, the practice is not yet mainstream. The caveat here is shaping a cross-media campaign to take best advantage of each medium, not just repurposing TV commercials, say, to run on Internet screens. Ultimately, marketers are best serving themselves when they find a way to make the Internet portion of their cross-channel efforts work in some interactive way to win the hearts and minds of their customers. This interactivity can, of course, be more than the clickthroughs, as Jim suggests, while retaining the thematic and graphical connections to offline ads that he also mentions. For example, Mercedes-Benz has a series of online ads that lets the user “uncover” various features of a specific make and model, look at the car from various angles, and so on. While this ad looks similar to the static magazine ads from the same campaign, the interactive element makes it more memorable and draws in the customer even more.

avant|marketer: Some brand managers’ reaction to the recent data on cross media marketing is that it’s trite, since working towards creating a consistent message across media has always been fundamental to good marketing. But if recent research is correct, the need to do Internet-centric cross media marketing stems from a host of new factors - some of which Jim alluded to. That said, how should major brands ratchet down on a particular cross-media marketing strategy? What questions should they be asking themselves? Walk us through what their thinking should be here.

Rudy Grahn (Jupiter Research): The Internet is maturing very rapidly ... as a result, I’m not sure we’re far enough along to know what the best practices are going to be; we are not at a point yet where consumer usage has normalized. Think about Television. The number of people that go out and buy a Television is not a huge factor anymore in the success of TV advertising. There are few people without TVs, and everyone pretty much knows how they want to use it.

With the Internet, how many people buy computers, how much time they spend online, and how they access the Internet are all still prime factors that will influence how much activity takes place on a given website, and thereby impact advertising effectiveness. This will lessen over time, but we are still seeing 50%+ growth year over year in average minutes spent per month for a typical user. As Bob Dylan said, “the wheel’s still in spin.”

The best a marketer can do is test. I write syndicated research for a living and I’m a strong believer in its ability to help marketers make decisions, but I would suggest that there is no better set of data available to a marketer than their own results. Start by benchmarking how your own mix works, not worrying over averages and hard-and-fast rules. The averages don’t mean anything ... yet.

Jim Nail (Forrester Research): In my view, marketers who consider today’s talk about integrated marketing trite haven’t grasped an important change that digital marketing has brought to the definition. Since the early 80’s when I was at Ogilvy & Mather, “integrated marketing” has been defined as having a consistent message in all media and across the different marketing disciplines of advertising, direct marketing and promotion. With the advent of digital, integrated marketing must do two additional things: it must provide virtual experiences of the brand online, and media planning must consciously think about how to use the different media to move consumers through the awareness/consideration/preference/purchase process. Simply pushing more of the same messages across more media just overloads consumers. The new model of integrated marketing gives consumers a message [in a traditional media channel] that invites or lures them to interact with the brand, then gives them an experience which brings that benefit to life, and leads them to develop a longer-term relationship with the brand.

The rise in importance of integrated marketing is about more than just the changing media consumption habits David mentioned earlier, though that is part of it. It’s even more fundamentally about how consumers interact with a brand or a product category. Wells Fargo has developed an excellent email alert program for mortgage refinancers based on two insights into consumer behavior: First, that there is a short window when consumers consider refinancing and, second, that until the new rate is sufficiently below a consumer’s current rate, the consumer isn’t interested. So when someone signs up for this program, Wells Fargo keeps them on the list for only 3 months (with the option to re-subscribe) and the consumer only gets an email when rates hit the trigger he sets. This delivers a brand experience that says, “Wells Fargo understands and is here to help,” and engages the consumer in a relationship around the refinance process. Now they need to connect this more to their offline advertising, so that when they advertise “today’s great rate” they also say “waiting for a lower rate? Sign up and we’ll let you know when rates drop.”

avant|marketer: Let’s talk about tracking. As the cross media question looms larger and larger for many brands, some serious issues have surfaced surrounding the trackability of cross media consumer activities. How does the marketer go about effectively tracking the sales that result offline from online brand exposure, let alone to a specific channel such as email or the web site, and vice versa, online transactions resulting from offline exposure?

Jim Nail (Forrester Research): As the media mix gets more complicated, marketers are going to have to give up chasing the chimera of “closed-loop tracking”. By its nature, tracking that this ad, led to that call which resulted in this sale ignores the contributions of any other element of the mix. In branding the rule of thumb is that it takes 3 or 4 impressions to get the message across, so does that mean that only the last impression was successful? Of course not. But that’s what this sort of reasoning implies.

Instead, marketers are going to have to learn a new skill Forrester calls “correlative measurement”, looking at media mixes and spends at a higher level and correlating that activity to sales, leads or other measurable results. Using this technique with deliberate tests of different mixes has begun to shed light on what combinations of media show synergistic effects. Agencies like Digitas, Beyond Interactive, and Carat-MMA have done some very good work in this area.

avant|marketer: There is a fair amount of talk among industry insiders that technology is soon going to facilitate all of this correlative measurement in a much more automated, off-the-shelf way than is presently possible? Already a number of firms have released early solutions claiming to enable this. What are some the technologies you are watching in this area right now, and what promise do these really hold out for the marketer?

Jim Nail (Forrester Research): I’ve been watching Veridiem for a long time. They’ve been way ahead of the market, but they’re now getting some good clients and experience. Aprimo and Unica are moving in this direction since their campaign management solutions automatically grab a lot of the data needed for this kind of analysis. The promise these hold is in this area of consolidating and organizing the data that already exists in companies. It has been striking to me that when I talk to marketers about correlative measurement, they say, “We don’t have the data we would need to do that,” and the market mix modeling companies say, “Companies have all the information they need. Once we go in and look for it, we find it.” This data gathering, cleansing, organizing phase currently is long and costly but the tools will help cut it.

avant|marketer: To what extent can investments in such large-scale tracking and measurement programs as these produce ROI for the marketer? Are these programs truly cost-efficient, at this early stage?

Jim Nail (Forrester Research): Marketers simply need to walk their talk. I never hear any marketer disagree with the old adage that half their budget is wasted. So if you have a $5 million budget and it costs $200,000 to do this measurement to make better spending decisions on the $2.5 million you are currently wasting, that is a pretty good payback.