#DigitalMarketingAsia: Are you suffering from data addiction?

With the acceleration in digitalisation, marketers are placing increased focus on data-driven campaigns, and might even find themselves becoming too reliant on collected data. In fact, according to Bastiaan de Clercq (pictured), head of digital and media, FrieslandCampina Malaysia, one might even say marketers have “gotten addicted” to all the data they are able to get, as they increasingly invest more in direct-response digital campaigns.

Speaking at MARKETING-INTERACTIVE’s virtual conference Digital Marketing Asia, de Clercq explained that due to the abundance of data companies can collect out there, some may fall into the vicious cycle of getting instant feedback from their digital campaign efforts, and using it to optimise their digital campaigns even more. In turn, these companies focus less on their offline and other marketing strategies.

“It's very tempting to over-invest time in digital and campaigns because of the wealth of data we have there,” de Clercq added.

This focus on direct-response campaigns is also “short-sighted” of marketers, according to de Clercq, as such campaigns tend to be a short-term marketing strategy to drive sales. Instead of depending on investing in direct-response campaigns, de Clercq said it is essential for companies to play the long-term game and invest in brand building.

According to a 2017 study done by McKinsey, companies that followed a long-term strategy had 47% more full-time growth and 36% higher earnings, when compared to those who did not. Additionally, de Clercq said the Institute of Practitioners in Advertising (IPA) also found that long-term campaigns were three times more efficient than short-term campaigns, and three times more likely to drive market share improvement and 60% more likely to drive profit.

Brand building then comes into play as it influences consumers’ behaviour not only for today, but also for tomorrow and the day after.

Companies not only need to shout out what they have to offer, they also need to drive awareness of their brand and remain top of mind of consumers.

By investing in branding, companies build memory structures among their consumers that will bias purchase behaviour in the future. Such brand-building efforts will then create that mental availability within these memory structures, so that consumers can easily recall the brand. “If consumers think about your category, you need to make sure your brand is the first one that pops up,” de Clercq said.

Balance is key

However, he is quick to caution companies not to over-invest in branding. When brands over-invest, it will typically lead to a low conversion-to-purchase rate, where consumers are aware of the brand, but have even less desire to purchase the products. Furthermore, de Clercq added that companies would run the risk of inducing ad fatigue among the consumers, where consumers get bored of the same repeated ads, rendering the ads no longer efficient.

Therefore, finding the right balance between long-term and short-term strategy is vital. “Smart marketers build a brand over the long term and activate efficiently on the short term,” de Clercq said. As a rule of thumb, de Clercq advises to follow the 60/40 rule: investing 60% of the budget in branding, and 40% in short-term campaigns.

Additionally, de Clercq said both long-term and short-term strategies should enhance each other. He advises against using the same campaign to achieve both brand building and sales conversion. “If you try to do both, you do neither and won’t do a good job,” he added. This is because there is a fundamental difference in objectives and dynamics between the two types of strategies. Although every campaign does have brand-building and direct-response elements, branding campaigns tend to have a long-term emotional message that looks at a broader reach. On the opposite side, direct-response campaigns tend to be a more targeted media to drive short-term purchases. While a branding campaign creates that mental availability in consumers, a direct-response campaign activates it and pushes consumers to make the purchase.

Measurement of campaigns

There are different measurement tools to determine the level of efficiency of both short-term and long-term branding campaigns. Two major approaches that de Clerq mentioned are the marketing mix modeling, which provides a top-down analysis using aggregated data over weeks and months, and the attribution model, which is a bottom-up, channel-specific approach that looks at different specific touchpoints.

While the attribution model can provide a visible path to purchase for the companies, it only looks at online channels, leaving out the measuring of offline campaigns and advertising, according to de Clercq. Meanwhile, the marketing mix modeling uses aggregated data across offline and online, and might not be able to provide accurate data sets if companies want to zoom in on a particular channel.

When determining which model is more suitable, de Clercq said companies need to take into consideration the nature of their business. If the business only sells offline, he advised to prioritise the marketing mix modeling, and only use attribution model for online activities such as lead generation. Similarly, if the business is only selling online, it can consider prioritising the attribution model, and only use marketing mix model if the company starts advertising offline.

Having said that, not all online businesses should focus on the attribution modeling. It is very important to take into consideration the industry that the company is in. For example, eCommerce companies themselves need to determine if they are in a high-involvement category or if they offering more of an impulse product, and test model works for them better.

Although the attribution model seems to be what companies should incline towards, given that the COVID-19 pandemic has forced more consumers to move online, de Clercq reminded marketers not to neglect data from offline channels.

“Let’s not forget that in many countries, especially Malaysia, television consumption has also increased due to the pandemic. So yes, a lot of activities are happening online more, but it does not mean companies cannot curate the trigger offline,” he added. In fact, many companies may have invested too aggressively in digital during this time, and forgot about sales conversion opportunities through television.  

When deciding which measurement approach to use, de Clercq also said that companies should take into account that attribution model is easier to implement. Companies can use standard models from platforms such as Google, where the only variants they need to decide is the type of model they want based on, such as last click or time decay. On the other hand, the marketing mix model involves more statistical work, which may require data scientists to be engaged. 

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