Many Marketers Are Under More Pressure Than Ever to Prove Effectiveness of Ad Spend

January 27, 2021

TheTradeDesk Pressure to Prove Effectiveness of Ad Spend Jan2021Since the events of 2020, more than 4 in 10 marketers are having to justify expenses that were never questioned before. This is according to a recent report [download page] from The Trade Desk.

The pandemic has affected every industry in a variety of ways, but the 200 companies surveyed indicate how marketers are experiencing changes to their ad spend after a turbulent 2020. A whopping 84% of respondents shared that when thinking about the ongoing effects of the pandemic, they are under more pressure (48%) or more pressure than ever (36%) to prove the effectiveness of their advertising spend.

In fact, more than 4 in 10 (43%) have had to justify investments/expenses that were never questioned before, while half are finding that the marketing KPIs they have been using for years are now being challenged. And, a full 80% have had their planning or budgeting process impacted significantly by COVID.

Data-Driven Advertising

Some of the changes being experienced by marketers are manifesting as a shift toward data-driven campaigns. More than one-quarter (27%) expect 51-70% of their media mix to shift to data-driven advertising in the next year, and more than 4 in 10 (45%) think data-driven advertising will account for 26-50% of their media mix.

By and large, marketers are turning to data-driven campaigns for flexibility and measurement capability, with respondents strongly influenced by benefits such as the ability to use real-time insights to improve in-flight campaign performance (50%) as well as better measurement capabilities and thus easier-proved effectiveness (55%).

Furthermore, marketers are shifting toward data-driven advertising as a result of a move away from user-generated content – some 56% shared that they intend to shift spend in this way.

According to respondents, ad spend is changing in other ways, too. A plurality of respondents are maintaining spend in areas like linear TV (38%), streaming audio (41%), radio (36%), and digital out-of-home (44%) as opposed to increasing or decreasing spend, but when it comes to connected TV the largest share (44%) are planning to boost their spending.

Ad Metrics

With the goal of effective measurement for advertising, marketers cited a number of capabilities as very or somewhat important. Equally important were areas such as being able to export data across marketing platforms (88%), objectivity and transparent measurement i.e no black-box solutions (88%), media-specific ROI (88%) and cross-channel reach and frequency metrics (88%).

Thanks to advances in data-driven measurement it would appear that marketers are finding it easier to connect their ad spend to success metrics, with nearly 6 in 10 (57%) saying that they were able to connect digital ad spend to brand awareness very well.

Fortunately, this is translating into a confidence in reporting success metrics to senior management or CFOs. More than 8 in 10 are somewhat (47%) or very (36%) confident in reporting return on investment/return of ad spend, with an equal share saying the same about reporting channel-specific metrics like impressions, CTR, CPG and GRP (somewhat: 45%; very: 38%).

Read the full report here.

About the Data: Findings are based on a September 2020 survey of marketers at 200 major advertising agencies and brands in North America with more than 500 employees and whose marketing budgets range from $50,000 to more than $5 million.

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