Consider that it was barely ten years ago that Binet and Field published The Long and the Short of it and proposed their famous 60:40 rule—that is, to maximize marketing effects and returns over time, 60% of a media budget should be allocated to brand marketing and 40% to performance marketing. Yet according to results from our 2024 Annual Marketing Report, 70% of marketers plan to increase performance marketing spend this year at the expense of brand building. What gives?

Short-term pressures

Companies today are under enormous pressure to deliver short-term results. Market conditions can change on a dime: a nimble new competitor entering the market; a new spike in inflation; geopolitical uncertainties; issues with the supply chain; or simply modern consumers being modern consumers and latching onto a new trend. It’s only natural for marketing leaders to want to capitalize on the opportunity right in front of them.

The logical choice then is to focus their efforts on the bottom of the funnel. There, they can target consumers near the moment of purchase, tailor their messages for immediate action and quickly see if their media spend is paying off. Between search, display, social, retail media, podcasts or even CTV, advertisers now have many more options to trigger short-term conversions than ever before. 

But there are two major pitfalls to watch out for:

1. The first is to forget that when a shopper clicks on a Buy Now button, it’s the result of a long string of touchpoints with the brand, not just the last impression. Too many marketers still attribute sales to that last impression, for simplicity’s sake. This leads to a vicious circle where brands end up neglecting top-funnel activities to build their brand, and spending more to convert fewer prospects at the bottom of the funnel.
2. The second is to assume that the long-term health of the company will take care of itself. In Binet and Field’s words, “Long-term effects are not simply an accumulation of short-term effects.” The same applies to outcomes. You won’t see long-term results by amassing short-term wins. What’s more, short-term pressure will only get more intense over time for companies that don’t invest in long-term effects.

Perceived effectiveness

There’s another possibility to consider: That today’s enthusiasm for performance marketing comes from the perception that channels typically used for it are inherently more effective.

Nielsen’s Annual Marketing Report shows that marketers deem social media, search and online display and video to be the most effective digital channels in their quiver. Nearly 80% of them perceive social media to be extremely or very effective, for instance, and 72% give the same appreciation to search. Marketers don’t typically associate TV with performance marketing. Yet, when we analyze how TV fares across hundreds of marketing mix modeling studies, we find that it’s one of the only channels that performs equally well at the top and bottom of the funnel.

The point is not to cast doubt on this or that channel or to put any of them on a pedestal. All campaigns and brands are different and every channel has its strengths and weaknesses. But it is important to recognize that there can be a wide gap between the perception of performance and actual performance. The fact that a channel is addressable, relatively easy to measure and perceived to be effective doesn’t automatically make it good for performance marketing.

Measurement drives strategy

When asking if you’re investing in performance marketing for the right reasons, you want to make sure budget decisions are informed by strategic considerations and not by what is feasible, or what you believe might be feasible.

That’s why holistic measurement is so critical. Most channels are strong in either performance or brand messaging, but rarely in both. And you can only determine the right mix of brand and performance for your marketing needs if you have a clear picture of your media effectiveness across the entire funnel. In today’s complex media ecosystem, cross-channel KPIs and measurement capabilities should be a top priority, yet only 38% of marketers measure traditional and digital marketing together. There’s clearly a lot of room for improvement.

An encouraging sign is that 77% of marketers interviewed for our 2024 Global Annual Marketing Survey are planning to increase spend on newer channels (like CTV and influencer marketing) this year. Experimenting with new channels is a great way to add new marketing capabilities and keep up with consumers—as long as they’re measured consistently with the rest of the marketing mix.

There’s a right mix of brand and performance for your business. Just make sure you base your decision on hard data and not just perceptions.

For more insights into how to maximize campaign spend across the marketing funnel, read Nielsen’s 2024 Annual Marketing Report. 

The post Are you investing in performance marketing for the right reasons? appeared first on Nielsen.

Marketing metrics must reflect business impact

This is not the first time in history that marketers have been pressed to prove the impact of their work, far from it. The increase in the amount of data, growing number of sources of data, rise in synthetic data, and expectations around your ability to show the business relevance of data have skyrocketed. 

This means going beyond ‘data-driven’ decisions when building your ROI strategy. You must have the right data at every step of the customer journey. And just because metrics are easy to capture, that does not mean they are the right metrics to use. Instead, they should be those that are tied to market performance and are incrementally valuable to one another. 

Bridge the gap between outcomes and tactics

Nielsen’s latest Annual Marketing Report found that global marketers’ top priorities for 2024 are long-term and full-funnel ROI. However, 70% of these same marketers said they plan to increase their performance marketing spend and reduce their brand-building investments. 

There is a clear gap in the goals marketers have and the tactics they’re using to get there. I believe a misunderstanding of metrics is at the heart of it. If you are measuring ROI only by what’s happening to the bottom line, you may be missing the bigger picture. Being too focused on short-term returns is proven to hurt your ability to improve revenue numbers down the road. Because just as consumers and users have a path they follow, your ROI has a journey, too. 

Map your ROI journey

You can get to a destination without directions, but it takes a lot more time and effort. The same is true with outcomes; they’re consistently successful when you have a comprehensive plan. But the plan is changing. 

For much of the last decade, performance has been tracked at the channel level. Did we hit our impression targets? Did we shrink the costs per click? Did we improve our bounce rate? 

This approach fails on two fronts: 

1. It confuses engagement for impact
2. It doesn’t reflect the consumer journey

ROI can’t be tracked by a range of data points at the channel level. True full-funnel ROI starts by aligning on objectives, defining KPIs from the outset, mirroring the paths consumers take and understanding how everything works together to achieve an outcome. 

From the first point of contact to refining the reach and frequency strategy and on through the point of purchase and beyond, you have to map not only the consumer actions but the impact along the way in order to see what’s genuinely working at every touchpoint. 

For example, top of funnel and bottom of funnel KPIs can often appear to be at odds. Perhaps the keyword search volume is high, but it’s not translating to pageviews. This is too narrow of a view. Instead, look at the bigger, cross-platform picture. Is the lead volume up? How are those leads contributing to the pipeline? By zooming out to look at the bigger picture, a more consistent story should emerge. 

Plotting your ROI journey must happen before anything else, because you can’t always retroactively measure outcomes. If you don’t plan to measure KPIs like Brand Lift and Sales from the beginning, you won’t be able to measure them at all. And even when you can do retroactive-looking metrics, it can be a prohibitively large effort for most teams. 

Know and report the right metrics

When trying to determine what metrics reveal impact, I’ve found this question to be a helpful litmus test: Will the results be compelling to your CFO?  

It’s not uncommon for marketers to stay focused on metrics like impressions, frequency, clicks and downloads. While valuable, they rarely translate for CFOs. Relevancy is what matters to Finance, and it’s up to marketers to draw the connecting line for them. 

This doesn’t mean you need to stop tracking things like likes, clicks and listens;  they’re a valuable gut check. But they shouldn’t be the foundation for strategic reporting. 

This has been a particularly challenging season for the advertising industry. We’ve all had to contend with change coming from every possible direction. As paths to purchase continue to fork, impact continues to be a guiding light. As long as you know where to find it.  

For more insights on how to sharpen your ROI strategy, download the Nielsen’s 2024 Annual Marketing Report. 

The post ‘Data driven’ is no longer enough for your ROI strategy appeared first on Nielsen.

To them, impressions and engagement metrics are a means to an end. What they really want to know is whether their marketing investments are making a difference at the cash register. Of course, not everything has to be a sale or acquisition, but there should always be impact. 

Here are five CFO-approved key performance indicators (KPI) that will show impact, unlock budget and impress everyone at the next board meeting.

Cost per lead

Divide your marketing spend by the total number of leads you received. This can be done at the campaign level or for a set period of time, like a month, quarter or year. 

It’s a great metric because it draws a direct connection between marketing and purchase interest, and it’s very easy to understand for non-marketers. It’s also very healthy for the rest of your measurement efforts because it requires you to pay special attention to attribution: What platforms exactly contributed to your leads? In what proportions? At what cost?

Lead conversions

How many of your leads actually converted? It can be expressed as a rate (conversions / leads), a raw total over a given time period, or by extension as sales per lead. 

It forces you to give some thought to what lead time is reasonable for your industry (a conversion three months after an initial lead might be reasonable for auto or insurance brands, but perhaps not for snacks or pizza delivery) and how it might differ by channel and brand messaging, which is an important consideration for media allocation.

Return on ad spend (ROAS)

ROAS is the revenue brought in by a campaign divided by its cost. It’s a crucial metric because it goes to the heart of the ROI question: How much of your sales can be attributed to your marketing efforts, versus business as usual? 

Many consumers would have purchased from you without advertising. External factors like seasonality, weather, or macroeconomic variables might have played a role too, positively or negatively. ROAS is an invitation to look into media mix modeling.

Long-term ROI

Where is the cutoff between short-term and  long-term effects for your company’s products and services? Don’t blindly accept the 2X multiplier you might have seen in industry publications, or fall victim to the myth that performance campaigns only have short-term effects, and branding campaigns long-term effects. 

Every campaign follows a different curve of diminishing returns, based on factors like product category, messaging, competitors, target audiences, or the mix of platforms and ad formats you used. You can only optimize your campaigns if you understand their full effect over the long term.

Brand equity

This is a broad name for metrics like brand awareness, consideration, attitudes, favorability and relevance. It is also a KPI that needs qualifying. While not directly tied to sales outcomes, brand equity can have a positive impact on several things CFOs care about deeply. 

We’ve studied thousands of campaigns over the years, across dozens of industries, and we’ve found that the correlation between upper funnel brand metrics and marketing efficiency can be very strong: overall, we found that a 1-point gain in brand metrics like awareness and consideration typically drives a 1% increase in sales. Additionally, brand equity can influence your ability to retain clients, grow prospects and drive shareholder value. 

For more insights on how to sharpen your ROI strategy, download Nielsen’s 2024 Annual Marketing Report. 

The post Outcomes-minded metrics: The marketing KPIs your CFO cares about appeared first on Nielsen.

Live Webinar

Full-Funnel Outcomes: How to Measure Impact Across the Changing Customer Journey

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Live Webinar

Full-Funnel Outcomes: How to Measure Impact Across the Changing Customer Journey

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Learn more about…

Reach and frequency’s impact on outcomes 

Busting your ROI out of silos

The metrics that matter most, and why

72%

of global marketers expect bigger ad budgets this year, up from 64% in 2023

2/3

of media budgets are going toward digital channels—with CTV,  search and retail media driving the biggest increases

38%

of global marketers evaluate holistic ROI by measuring traditional and digital marketing efforts together

The post Full-Funnel Outcomes: How to Measure Impact Across the Changing Customer Journey appeared first on Nielsen.

Data source: 2024 Nielsen Global Marketer Survey

The post 2024 Annual Marketing Report appeared first on Nielsen.

Webinar

Navigating AI in
Marketing Mix Modeling:
Risk and Rewards

Discover how Artificial Intelligence is reshaping the marketing
measurement landscape and learn how to leverage that power
to optimize your Marketing Mix Modeling approach.

Watch the webinar

Webinar

Navigating AI in
Marketing Mix Modeling:
Risk and Rewards

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Learn more about…

The evolving AI trends in recent years and how perceptions have shifted, along with potential new opportunities

The pitfalls associated with AI if incorrectly applied within Marketing Mix Modeling

The essential framework for effective AI in marketing measurement  

More resources

Unleashing the Power
of Creator Content

Nielsen + Whalar: Predictive ROI accurately estimates what creators bring to the Mix

Read the case study

CPG Marketing Mix Modeling Meta Analysis

Nielsen + TikTok: MMM accurately measures the impact of TikTok advertising

Read the case study

Why long-term marketing drives business longevity

Understand which tactical investments produce the best returns in the long run

Read the insights

The post Navigating AI in Marketing Mix Modeling: Risk and Rewards appeared first on Nielsen.

Case study

Unleashing the Power of Creator Content

Nielsen + Whalar: Predictive ROI accurately estimates what creators bring to the Mix

Contact us

Case study

Unleashing the Power of Creator Content

Nielsen + Whalar: Predictive ROI accurately estimates what creators bring to the Mix

Contact us

Introduction

Measure the effectiveness of creator-specific campaigns

Whalar, a leading global creator company, specializes in unlocking the power of creators for brands in their marketing strategies. Whalar commissioned Nielsen to measure the incrementality and ROI of their creator-specific campaigns.

Objective

Quantify results quickly to maximize investments

The objective was to swiftly and accurately quantify expected ROI and Sales Impacts, with the end goal of optimizing media plans to maximize ROI potential from creator investments.

Challenge

Harness the power of Marketing Mix Modeling

Whalar sought a solution versatile enough to cover various categories, countries and brands of all sizes. Not only did they want to harness the power of a traditional Marketing Mix Modeling (MMM) study, but they also required a highly accurate source for insight into optimization prior to campaign launch.

Solution

Use predictive analytics to identify optimization opportunities

Nielsen introduced Predictive ROI (PROI), an advanced solution designed to provide rapid and cost-effective ROI insights, even for emerging media types like creator content. PROI harnessed the power of Compass Planner, Nielsen’s premier MMM normative database, employing media saturation curves and campaign data from prior MMM analyses to forecast ROI and gauge effectiveness.

By leveraging Nielsen’s unparalleled MMM benchmarks and utilizing the synergistic predictive tool, Whalar empowered clients to gain immediate visibility into the anticipated ROI of their media plans and uncover opportunities for optimization, all before the campaign launch.

Key findings

Key findings

$2.63

Strong ROAS

While the ROAS across the 6 measured campaigns ranged from $1.5 – $4.5, the average ROAS across the campaigns was $2.63.

9%

ROAS comparison

The average ROAS across the campaigns ($2.63) was only 9% different compared to total platform ROAS ($2.43) measured via a prior executed MMM. This reaffirmed earlier research by Nielsen, connecting the comparability of PROI results to MMM.

25%

Underinvestment in content creator campaigns

Historical execution levels were approximately 25% of saturation levels, indicating an underinvestment in content creator campaigns within advertiser marketing plans.

20%

Key performance drivers

Weeks on air and optimal weekly impressions emerged as pivotal drivers of campaign performance. An optimization scenario implemented on one of the campaigns revealed that doubling weekly support while maintaining the same number of weeks on air could increase ROAS by approximately 20%.

Results

Optimize quickly to maximize campaign performance

The study results presented a significant opportunity for advertisers to enhance their ROIs by optimizing weekly paid media weight levels and the length of time on air, as well as reallocating resources to maximize the potential of their creator marketing campaigns.

How it works

PROI, Nielsen’s leading advanced media performance measurement solution, enabled Whalar to engage in sophisticated budget allocation and planning through the use of machine learning algorithms to estimate the outcome of media plans for their advertisers’ brands in their markets. PROI unveiled an unmatched global scale with benchmarks across 5K+ models, 25K+ curves, and hundreds of categories in 50+ countries. Its advanced modeling capabilities and validation ensure accuracy and reliability, even with less data granularity, for Whalar’s multifaceted campaign.

Conclusion

Improve campaign effectiveness with Nielsen’s predictive analytics

Nielsen’s PROI solution demonstrated its effectiveness in providing rapid and cost-effective ROI insights for creator marketing campaigns. By leveraging MMM principles and historical data, the study shed light on the untapped potential of content creator campaigns, presenting advertisers with actionable recommendations to optimize their investments.

The biggest challenge facing the Creator Economy is determining the impact on ROI, quickly, and at scale. Since MMM isn’t always an option, Nielsen’s PROI solution is perfect for Whalar’s brand partners. It employs methodology by tapping into Nielsen’s vast MMM database to highlight the significant impact of Whalar’s creator campaigns.

Gaz Alushi | Whalar
President of Measurement and Analytics

Want to talk with our team of experts?

Contact us

Want to talk with our team of experts?

Contact us

Want to talk with our team of experts?

Contact us

The post Unleashing the power of creator content appeared first on Nielsen.

As one of Europe’s leading operators and a world leader in converged broadband, video and mobile communications, Liberty Global needed an entertainment metadata powerhouse to help create its next-generation entertainment platform, Horizon 4, as it rolled out across 85 million subscribers. Nielsen’s Gracenote first partnered on metadata for Liberty Global’s UK business, Virgin Media, in 2010, and has gone on to power metadata solutions across the operator’s markets, completing its support for Horizon 4 in early 2023. 

Download the case study to learn how Liberty Global and Gracenote are aggregating metadata to deliver the next chapter in immersive, content-led visual experiences. 

The post Liberty Global’s metadata journey to super-aggregation with Gracenote appeared first on Nielsen.

There is no shortchanging the complexity of today’s media industry, or the impact that the ever-expanding range of choice has on effective cross-media measurement. That complexity, however, doesn’t grant marketers any leeway when it comes to delivering on business objectives. In reality, we know that increased complexity simply amplifies accountability.

And managing complexity isn’t enough. Marketers need to find ways to keep things simple, streamlined and clear—oftentimes with reduced budgets and fewer resources. Marketers are on the hook to deliver for their businesses and justify their investments along the way. In that way, the complexity of today’s media landscape has become both a unique and a universal challenge.

The proliferation and growth of new media channels presents one of the most pressing difficulties in the quest for effective cross-media measurement, especially as audiences increase their connected TV (CTV)¹ usage, which provides access to streaming services. Streaming may be the most top-of-mind today, but the future of cross-media measurement will need to be adaptive to many new channels as they emerge.

Today, however, marketers know that streaming is where the audience is, and they’re adjusting their marketing plans accordingly. In fact, the survey supporting the 2023 Nielsen Annual Marketing Report found that 45% of ad budgets globally, on average, are shifting to CTV channels. The flipside, however, is that marketers don’t yet see the value in their CTV spending, as only 49% of marketers say CTV is either very or extremely effective.

Given the appeal of streaming with audiences, it makes sense that marketers are leaning in—even though the perceived effectiveness is currently low. When any new channel gains audiences, marketers need to balance between spending where they know the audience is and the risk associated with learning what they need to know to prove their investment there.

But measuring audiences across the streaming landscape won’t be marketers’ last hurdle. It’s simply the one they’re facing now. Widespread connectivity will continue opening the doors to new options, all of which will have their own measurement needs. That’s where the real cross-media measurement challenge is.

Tools and solutions that measure engagement at the channel level have never been able to provide marketers with a holistic view of how individual people are engaging across all channels. Historically, the road to cross-media measurement has relied on marketers’ ability to aggregate channel measurement and then surmise what a complete consumer journey looked like. Channel proliferation and increasing privacy regulations make that an increasingly tall order, and sentiment from global marketers reflects the increasing difficulty: Only 50%, on average, say they’re extremely or very confident in their ability to measure for full-funnel ROI across channels.

Confidence aside, marketers know they need to address the challenge, as 71% overwhelmingly acknowledge the importance of arriving at a single view of audience engagement across channels (i.e., comparable, deduplicated measurement).

If marketers truly desire that single view of audience engagement across every touchpoint, they’ll need to abandon any tool or solution that isn’t complementary from a data perspective. Marketers should consider leveraging as few tools as possible to arrive at that single view of audience engagement. Undoubtedly, a shift like this could be unsettling for many. But as marketing dollars span an increasing number of channels, disparate datasets from channel-specific tools will require an increasing amount of manual reconciling.

With confidence in arriving at full-funnel ROI measurement at relatively low levels today, an increasingly rich media landscape in the years ahead suggests the need for transformative thinking based on data and solutions that are both trusted and channel agnostic. With audiences adding and seamlessly switching from channel to channel, it makes sense that measurement should be able to do the same.

For additional insight, download the 2023 Nielsen Annual Marketing Report.

Note

Connected TV (CTV) refers to any television that is connected to the internet. The most common use case is to stream video content.

The post Audiences transcend marketing channels; measurement can do the same appeared first on Nielsen.

Marketers aren’t confident in channel-level measurement

Across traditional and digital media, marketers have 15 different channels¹ at their disposal. Despite this fragmentation, just under 70% of the global marketers surveyed for the 2023 Nielsen Annual Marketing Report believe they have the right marketing technology to measure the aggregate returns on their investment. The flipside, however, is that their stated confidence in ROI measurement at the individual channel level is much lower—which stands in stark contrast to their full-funnel marketing confidence.

The gap between holistic and channel-level confidence highlights a primary flaw in leveraging channel-specific marketing tools to assess overall marketing effectiveness. Arriving at a single metric for reach and frequency across channels is incredibly difficult, and sentiment from global marketers underscores the inherent complexities, especially across many of the digital channels that marketers are investing more in.

Even when believing in their martech, global marketers acknowledge the problem, with only 54%, on average, expressing confidence in their full-funnel media measurement capabilities (i.e., end-to-end measurement). Confidence is slightly higher in EMEA and slightly lower in Asia-Pacific.

Given the challenges associated with cross-media ROI measurement, such as quality audience data and reduced use of existing marketing technology, 52% of global marketers, on average, are currently solely focused on reach and frequency metrics.

Multiple tools widen process gaps and information silos

To keep up with the growing media options, many marketers report using an array of tools and solutions to measure their campaign performance. This isn’t surprising, but it can complicate the road to holistic measurement. The more tools you work with, the more datasets your systems—and people—have to be ready to ingest. And each one takes time. Add to that the historically different methodologies for linear and digital measurement and it’s clear to see the need and difficulty of arriving at comparable, deduplicated metrics. Globally, 62% of marketers, on average, use multiple measurement tools for their cross-media measurement. Comparatively, just 34% report using one.

Globally, marketers know how important comparable metrics are in understanding the effectiveness of their ad spending. Amid an increasingly rich media landscape that will continue to offer new experiences in the years ahead, marketers should consider tools, solutions and metrics that are media-agnostic to achieve their long-term measurement—and business—objectives. Without a comprehensive view of the audience, marketers won’t have a complete view of campaign performance.

For additional insights, download the 2023 Nielsen Annual Marketing Report.

Note

¹ Traditional: Radio, linear TV, print, direct mail, OOH, cinema. Digital: Email, search, social media, podcast, digital display, digital video, OTT/CTV, streaming audio, native ads.

The post Channel overload is hurting full-funnel marketing effectiveness and ROI confidence appeared first on Nielsen.