Friday, July 22, 2016

5 Reasons Why Brands Don’t Spend (as much) on Digital Marketing

Having been in the digital industry for quite a while, I’ve seen growth of the industry in terms of services, available platforms as well capabilities in terms of analytics and automation. However, why is it that brands still haven’t shifted their advertising and marketing spend to embrace digital as a channel? Shouldn’t it be the norm now for brands to do so, given that the industry has advanced and matured over the years to the point where it is now no longer termed “new media” but “mainstream media”? Yet, most brands only dedicate a small portion of their total advertising budget to digital channels and campaigns. Here are some of the reasons this could be the case:

Where do you even start?

The digital landscape is fragmented. VERY fragmented. There are many components and parties that rely on each other to make things work. Creative agencies, media agencies, publishers, ad serving, tracking, etc. In fact, it’s so fragmented, that there are providers that provide overlapping services to one another, and it can be totally confusing for someone to grasp what each service provider really does. Just to give you an idea, here is an image from on the marketing technology landscape.

Marketing Technology Landscape -
(click here to view full image)

Believe me, I sometimes get confused as well after looking at this chart. For brands who want to invest in digital after seeing this, you can understand why there is confusion and doubt.

Don’t know the ingredients to make that sauce

Digital channels or media as a whole are made up of 4 main pillars: Display, Search, Social and Mobile advertising. Those are then fueled by content, which relies on optimization platforms and analytics to get the right balance. The question is, what is the right balance? How do you choose your digital media mix? How do you choose what platform to be on? What services to use? It’s like cooking. You first have to know the ingredients and cooking methods in order to make a particular dish. This is where the majority of brands rely on agencies to provide them consultancy on how to go about doing it. The challenge is always working with the right (and competent) agency, who knows your business well in order to recommend what you need to fulfill a business objective. But in my opinion, that in itself has its own set of challenges. (Read morehere)


Digital jargons are scary. There are so many metrics and measurements that are being used to the point that brands (and also agencies) sometimes do not really know what metrics they should be looking at. It doesn’t help that every year, that jargon list grows. Brand owners who do not know how to justify these metrics to stakeholders would tend to stay away, hence playing it safe by only investing to what they know (i.e. traditional media) – they fear the unknown. Again, the best way is to keep abreast with what’s happening in the digital marketing world. Agencies should play a bigger role here by educating brands through workshops and training, so that brands are constantly updated and know how to look at these metrics and make sense of it.

“I don’t want to know what I don’t know…”

In this case, it’s more like “I’m afraid of what I will know”. For digital, (almost) everything is trackable. Hence, for a brand owner, it could be something that may work against them. I once asked a client why they did not want to run a particular campaign on digital. They said it was too technical for them, and everything is trackable to which, should the campaign not do well, it would be hard for them to “hide” the evidence and justify to stakeholders! But then I asked, why do you think it would fail in the first place, given we have tools that can optimize the campaign? What if you can show your bosses that you can actually track and show proof of success? To which they became interested and asked me to explain more. The main thing here was more the case of the client not knowing the benefits of investing in digital. All it takes is a little education and effort to try it out to be able to understand its benefits.

Digital is expensive!

This is kind of a chicken and egg situation. Digital investments can initially cost a lot to start. With cost of creative development, cost of media, setting up of platforms, re-occurring cost for services, etc., you could also see why brands tend to sway away from this. However, most of these are initial one-time setup costs. For example, if you want to run multiple creative ads online using display advertising, you would initially have to pay a hefty fee for the design of dynamic ad templates. But once those dynamic ad templates are created, it doesn’t cost much to have multiple ads running off those templates. You could then update these creative in almost real-time whenever necessary. Which other traditional medium lets you do that? Similar to having a mobile application or building a website, the initial setup does seem expensive, but in the long run, the cost will justify the investment if you do it right.

1 comment:

  1. Hey, very nice site. I came across this on Google, and I am stoked that I did. I will definitely be coming back here more often. Wish I could add to the conversation and bring a bit more to the table, but am just taking in as much info as I can at the moment. Thanks for sharing.

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