Digital bobby-dazzlers put ROI and data quality in dark

Marketers are so hypnotised by the glare of the latest “shiny” digital channels that they are ploughing more and more adspend into the next big thing – as well as prioritising creative over data quality – without even finding out whether their activity will work or not.

That is the damning conclusion of The Age of Dissonance Report from Nielsen, which studied the psychology of the modern-day marketer and asked them how they perceive the effectiveness of digital channels compared with traditional media and what their priorities are when it comes to campaign execution.

The analysis finds that novelty plays a huge role in marketers’ confidence, and newer channels tend to get the benefit of the doubt, even when measurement and a channel’s perceived effectiveness are not necessarily aligned.

Moreover, a digital channel that is perceived to be effective invites more spending even when that effectiveness cannot be readily verified, a factor which Nielsen says is “a scary proposition when millions of dollars could be at stake”.

When it comes to marketers’ perceptions of paid channels, paid search and social media are at the top of the list (for just under 80% of respondents), and they are joined this year by the video category.

For all the other channels, less than half of all respondents consider them effective. Nielsen insists this is no great surprise for digital channels where advertising is a relatively new development (such as podcasts, streaming audio or native advertising).

However, the perceived effectiveness of certain channels is not necessarily tied to marketers’ confidence in their ability to measure ROI. Among digital channels, email comes out as the digital channel that marketers have the most confidence in (with 67% of respondents being very confident that they know how to measure its ROI), followed by search (63%) and display (53%). Nielsen says the results reflect the fact that these are the digital channels that have been around the longest.

Yet social media and video do not fare as well as they did on the effectiveness scale: marketers evidently have a lot of faith in these relatively new digital channels and tend to call them effective without being absolutely confident in their ability to measure ROI.

In fact, when Nielsen analysed the correlation between a channel’s perceived effectiveness and a marketer’s decision to invest more money into it over the next 12 months, it found that they are willing to continue to invest in a digital channel even if that channel’s performance is lackluster.

The story is very different for traditional media, with the vast majority of marketers not expecting to increase their spend across linear TV, radio or print. Consciously or not, marketers seem to want traditional channels to perform better.

As the report states: “Those channels have been around for much longer, and their effectiveness is not a guarantee that budgets will increase.”

Another worrying finding is that marketers are ignoring data quality issues. For the majority, the top priorities are targeting and reaching an audience with the best creative possible, (53% of respondents), followed by ad creative (37%) and audience reach (31%). Only just over a quarter (28%) believe data quality is a priority.

The report states: “Brands seem to value data quality even less so than agencies do. This could become a problem in the long term. Companies typically have access to much more data about their brands than their agencies do (first-party customer data, partner data, multi-campaign performance data, historical trends, etc).

“The quality of that data is paramount. The fact that brands rank the importance of data quality last is alarming. Without accurate data, marketers must question the validity of any insight.

It concludes: “This is a sign that the industry must invest more heavily in educating front line marketers on the value of their data assets.”

The full report is available to download from the Nielsen website>