In this op-ed, the national head of investment at iProspect, Ken Lam, discusses balancing discounts and value with an effective media solution that drives great business outcomes for clients.
My boss recently said to me: “A good head of investment needs volume to have influence”. And whilst I believe that’s true for most, I have changed my view on this of late.
Yes, investment scale and volume are important to drive higher discounts and greater value for our clients, but I’d argue driving the most effective outcomes whilst ensuring a fair price for the right inventory is even more important to the success of our clients.
This is how I approach investment:
It’s not just about volume and discounts but rather maintaining a performance mindset to provide our clients with the right media solution that helps solve business problems, all with a fair price included.
We all spent the past 18 months with a close eye on the economy, wondering how much the ad market will slow or contract and how much impact it will have on our clients and their plans.
But the reality was that Australian total ad spend was only back -2.7 per cent in 2023 vs a record 2022, which was largely driven by YoY declines in Government and Retail spending, and don’t forget 2022 was a Federal Election Year. Whilst other major categories like Auto, Restaurants, and Travel have seen YoY growth despite the fact our discretionary spending has been sharply reducing (we can thank those pesky interest rate rises for that).
So, despite a less significant impact on the ad market, the economic uncertainty did make us all more reactive and think shorter term, with a greater focus on performance. SMI demonstrates this – there was a 32 per cent increase in demand fulfilment channels (Search, Social, Programmatic and Classifieds) across, across Fiscal Year 2023 vs FY21, whilst demand creation channels (TV, Out of Home, Radio and Print) only saw a moderate increase of 6 per cent over the same period which was driven by 43 per cent increase in Out of Home post Covid (and if you exclude Out of Home, these other channels saw a decline of -2 per cent equating to $92mil less over this time).
While the pandemic and the economic slowdown pushed the need to drive sales and conversion, the fact that more and more advertisers are favouring short-term performance driving channels over brand building or a full funnel approach is a cause for concern.
Especially in a converged media world where consumers are expected to find out about a product or service, research, read peer reviews and purchase; all in an instant.
It is no longer about looking at channels in silos but rather we need to look at holistic media solutions that influences consumer behaviours across the funnel. Yes, TV is the most effective at driving mass awareness quickly, but the same content is now consumed across streaming platforms and devices with the ability to segment and target more refined and segmented audiences, whilst new ad formats can drive them to websites or immediate action.
So why should I only talk to my TV reps about getting a bigger discount reflective of my client’s spend, and not ask them to help me with finding and converting audiences if my KPI is delivering a business outcome for my client, which they are more than capable of?
This is why unlocking media solutions that effect business outcomes is of fundamental importance to any media buyer, and why approaching investment with a performance mindset can help.
What media buyers need to be thinking about in 2024:
- Customers not audience: real-time customer understanding, loyalty and lifetime value should be the starting point to our target audience focus. Roy Morgan and audience profiling from claimed behaviour is great to complement but nothing tells the truth like deterministic data that shows actual customer intent and purchase behaviour.
- Full funnel experience: consumer pathways are more converged and fluid than ever before with technology enabling greater digital accessibility from content to brand engagement. Yet, many advertisers are still strictly focused on short-term sales and performance driving channels whilst the conversion gateways of every digital placement are collapsing the purchase funnel in ways that allow for potential discovery of a product to purchase in an instant. Investment should be omni-channel and across the full funnel, to make sure that each touchpoint is a step to converting a new potential customer.
- Measure accountability: media must be more accountable. Any investment in media should be attributed to a business outcome. Whilst media metrics are important to measure delivery and value, think beyond discounts and bonus and into what effect your investment is having on your client’s marketing objectives.
So yes, whilst a good head of investment needs volume to have influence, a better one understands the importance of balancing discounts and value with an effective media solution that drives great business outcomes for their clients.
Ken Lam is the national head of investment at iProspect.
