The 2013 Nielsen Outlook: Ripen's Takeaway

Nielsen just released their online advertising performance outlook for 2013. A good portion of it is not surprising; mobile, social media, and video will see an increase in advertising spend; marketers are hungry for better metrics to measure performance; brand advertising will see an increase. But, as always, there’s a subjective interpretation to this data. Today our Marketing Director David Rekuc weighs in with his views on the data.

Stat: 48% of brand marketers will shift dollars from TV to online video

According to comScore, online video ads reached an all time high of 13.2 billion in April of 2013, with 1.8 billion unique viewers. With nearly a third of the globe watching video online, it’s no surprise that brands are sinking more money into online video. Ok, that makes sense. People continue to move their viewing online, so the money is going to follow it.

More money is being sunk into online video, but what’s wrong here?

Despite money being sunk into the relatively new medium, marketers are still confused about how to measure its success. And they are certainly confused about how to make mid-campaign changes based on data. Unlike paid search or other direct response channels, it’s difficult to draw a clear line to online video’s effect on the company’s revenue. This could be why 52% of marketers are still hesitant to increase spending in a medium they don’t understand and have trouble measuring.

So, why have results been less than stunning in online video?

Quite simply because most advertisers are ignoring the tools at their disposal and they’re not forcing the medium to evolve. They’re ignoring the targeting available on the web and are determined to focus on antiquated methods of targeting. Frequency capping and ad rotation is an afterthought, if considered at all, and engagement is almost always ignored.

Stat: 69% of marketers will increase ad spend in mobile advertising

I think the more shocking headline would read “31% of marketers plan to not increase ad spend in mobile advertising.” It’s estimated that by the end of this year, there will be more mobile devices on Earth than people. Even without changing the scope of your campaigns, you will spend more in mobile advertising.

Another component of the rise in mobile ad spend is Google’s most recent Adwords update. The move to Enhanced Campaigns means that Google has made it easier for advertisers to spend more on mobile search ads. As part of the move to Enhanced Campaigns, advertisers can no longer control a bid on a tablet separate from a desktop. Wait, did I read that right? Yes, you did. As of right now advertisers are literally being forced to pay the same for a click on tablets as they are on desktops.

The 31% who do not plan to increase mobile ad spend is what’s disconcerting. With this influx of mobile devices and massive rise in mobile page views, why are marketers resisting the change? Quite simply: it is really hard to measure. Many companies suffer from a common problem: conversions that come from mobile are completed on a different device or in a store.

Those that truly strive to understand where they’re making money on mobile and where they’re throwing ad dollars down a trash chute will capitalize on the shift in marketing mediums. As with most things in business, the volatility and uncertainty of the new medium also represents opportunity.

Stat: 70% said they will increase ad spend in social media

Interesting, very interesting indeed. So, where does this newfound faith in social media advertising stem from? A lot of it is showing up because of an evolution of the medium itself. Facebook introduced FBX, which makes its ad inventory accessible to 3rd party bidding tools, allowing for new forms of targeting to emerge. Twitter’s promoted posts are becoming more and more widespread. LinkedIn’s self-serve ad inventory now includes ad spots in its feed (a much more desirable location than previously). The more attractive ad space and more robust targeting is what’s pulling in the money for social media.

FBX is definitely a big deal

The Facebook Exchange (FBX) allows 3rd party real-time-bidding platforms to serve ads on Facebook. So, what does this mean and why is it changing where marketers are spending money? Real-time-bidding platforms have grown in popularity because they can leverage nearly any data in real time to make ad purchases. The most popular being audience retargeting, which cookies users when they visit a site, then serves them an ad based on the fact that they have a cookie. The combination of Facebook’s high quality ad inventory, frequency of visits to their site, and this newfound context is what’s causing a valuable intersection for marketers.

I find it funny that the same technology that’s propelling Facebook’s ad growth is largely ignored in the world of video. Yes, there are definitely companies that take advantage of retargeting with video, but not nearly as widespread as it ought to be.

What all of this means in ecommerce

Social: The increase in social media ad spend is very significant in the world of ecommerce. As we just discussed, marketers now have the ability to retarget those who have viewed a product(s) on Facebook in real-time. There are direct marketing applications for this and can definitely drive incremental revenue for the savvy advertiser. There are also opportunities to re-engage with your existing customer by inviting them to like your Facebook page or engage with a like-gated app. However, make sure you use your newfound power wisely, advertising on social media is an interruptive form of marketing (outbound marketing) and your customers won’t appreciate you being overly invasive.

Mobile: Ignoring the growth of mobile is a sure-fire way to run your digital enterprise into the ground. It’s growing, and rapidly. You not only need a strategy for how you’re going to use the medium, but also a strategy for how you intend to measure it in meaningful ways.

Video: Online video is continuing to grow, which is a good thing for the smaller advertiser. It means that the best advertising medium in the history of the world is now available on a CPM basis without minimums (at least a portion of it is). The general misuse of the medium also represents quite a bit of opportunity for those that are determined to understand it and use it properly. Video will continue to grow and will become a more and more important medium for ecommerce sites as well; solving the online video puzzle now will give you a leg up on your competition when they finally realize what they’ve been ignoring.

Ok, now it’s on you. What are your concerns for ecommerce marketing, what do you struggle to measure, and where do you see your advertising dollars going in the future?

Ripen Services:

A constant flow of data means continual changes to how we advertise online. To stay on top of the game, trust your brand with the ecommerce marketing services at Ripen. With experts in social media management, paid search, and analytics, we’ll make the most of your advertising investment.


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