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AudienceScience® Research: Advertisers lack transparency needed to prove Digital ROI

by on November 14, 2013 in Advertising, Digital Marketing, Lead story, Media, Metrics, Mobile/Tablet, Online Advertising, Online Video, Research, Tech

New research results revealed by digital marketing technology company AudienceScience® demonstrate that senior marketers across Europe feel ill equipped to measure the return on investment they make from their digital marketing spend – hindered by the fact that the majority of client marketers are given little insight by their agencies into where their digital budget goes.

With the study showing that 50% of European advertisers also expect to invest more in digital over the next 18 months, results also demonstrate that marketers have a clear desire for greater transparency across all media buys if they want to reduce waste and improve effectiveness.

These new insights into digital advertising come from a survey AudienceScience carried out with BSB Media and The Vision Network as an additional part of the first annual International Media Image Survey (I-MIS) – run in conjunction with the International Advertising Association, Warc and Loudmouth PR.

 

Mark Connolly, Managing Director EU & APAC at AudienceScience, comments, “Global digital advertising is now a $117 billion industry, but the speed of its growth means that it has evolved in an overly complex way. Our research shows that advertisers lack the tools and transparency they need to make the most of their digital budget.  Only by adopting enterprise technology that ensures transparency and control will advertisers be able to cut out wastage and achieve improved ROI from digital advertising.”

Key findings include:

Advertisers remain uncertain of the ROI of digital: The survey shows that, while 35% of advertisers surveyed believe that digital media is proven to provide ROI, 40% of advertisers believe that they have not yet found a good way to determine digital media ROI.  In addition, 17% outsource all digital decisions to their agency.

Advertisers lack detailed insight on digital media budget allocation: The vast majority (63%) of advertisers reported either no insight at all, or only high level reports from their agencies.  This leaves only a third of advertisers who get full transparency into all costs (including third-party fees) associated with the digital media spend.

Advertisers significantly underestimate costs associated with fees and media arbitrage: Earnings records from publicly traded intermediaries show that fees can be in excess of 40% per vendor.  However, the research suggests that many advertisers are unaware of this.  42% of advertisers believe that less than 10% of their media spend goes to fees and vendor margins from media arbitrage and only two percent of advertisers believe that more than half of their media budgets go to fees, not working media.

Transparency is the most effective way to manage digital media waste: 40% of advertisers believe that the single most effective way to manage digital media waste is to use a tool that provides transparency in their digital media spend – a tool that enables them to track how their budget is spent across all inventory sources and provides them with more granular control of ad placement.  27% of advertisers also believe that bringing control in-house – as opposed to outsourcing all tasks to agencies and other partners – would be most effective for eliminating waste and creating transparency.

The survey results have been used to create an in-depth AudienceScience whitepaper on the European digital advertising marketplace which can be downloaded for free here.  In addition, AudienceScience will be hosting a webinar before the end of the year when Michael Greene, Director of Research at AudienceScience, and also Belinda Barker, Managing Director of BSB Media, will talk through the key findings in greater depth and discuss their implications for the digital marketing industry.

Interviews were conducted by InSites Consulting in Spring 2013 with over 300 network media agencies and advertisers with international responsibilities (240 agencies, 64 clients), and were administered via an online questionnaire.

 

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