Other articles in this edition
Chairman address, John Wells
Australian governments join global push to use medicinal cannabis to treat chronically-ill patients, Isabelle Walker
Funding success: helping 24,000 Aussie kids, Benjamin Haslem
The social media election, Timothy Mantiri
Election 2016, Julie Sibraa
Brexit: What next for the EU? The view from Brussels,Nathalie Rubin-Delanchy
Trump taps the disenchantment, Isabelle Walker
After many false dawns the economic sun may soon shine on Australia’s northern neighbour, Kathy Lindsay
The Shell Issue 8
Back to the future: Is it time for digital evangelists to take a cold shower?
It may be unfashionable but some old heads are starting to question if we have focussed too heavily on digital at the expense of ‘old-fashioned’ communications channels, writes Benjamin Haslem.
Have we become overly obsessed with digital at the expense of traditional communication channels?
Are public relations practitioners, marketers and advertisers so desperate to prove they are ahead of the curve that they focus on Facebook, Twitter, Instagram, SnapChat and other social media platforms and ignore radio; television and (yes they still exist) newspapers?
Is there a growing skills gap in the PR and advertising industries because younger consultants are too focused on digital at a time when ‘old’ media still holds most Australians’ attention?
And are we investing in digital comms with no real sense of what returns they are generating?
It seems it is dawning on advertisers that recent investments in digital platforms have not met expectations.
A recent report in the Wall Street Journal points to a surprising uplift in television advertising sales in the US, after two years of decline.
According to global media analytics company, Kantar Media, the United States’ biggest advertiser, Procter & Gamble, increased its TV advertising spend by 13 per cent in January this year compared with 12 months earlier. The trend continued in February.
As the WSJ’s Joe Flint and Suzanne Vranica report: “some advertisers who have made big bets on digital are coming back to TV because the return on their investment didn’t live up to expectations”.
“Marketers are concerned about digital advertising issues including fake web traffic generated by computerized ‘bots’ and the lack of consensus on how to judge when an ad is ‘viewable’.”
This recent development would come as no surprise to Chris Mitchell, the former editor-in-chief at The Australian newspaper.
Mitchell, one of Australia’s most experienced newspaper practitioners, argues advertisers need to check how much weight they give to digital over traditional media.
“… many advertisers are pumping large parts of their marketing budgets into digital products and, shiniest new thing of them all in the past couple of years, social platforms such as Facebook and Instagram,” Mitchell wrote in The Australian recently.
”What I know after 42 years in media is the only worthwhile ad is one that rings the cash register.”
Marketing professor at Melbourne Business School, Mark Ritson, argues that “most marketers have become completely obsessed with the brave new world of digital marketing at the expense of strategic fundamentals and the more traditional channels.
“This obsession has taken hold despite the actual data,” Ritson wrote recently in The Australian.
Ritson points out that 85 per cent of all video is still watched on a TV set in Australia.
“Not a phone. Not a laptop. A TV,” he writes.
And don’t fall for the argument that it’s all about the youth. The millennials born between 1980 and 2000.
According to OzTAM data, that cohort watched 59 per cent of its total video on TV. As Ritson points out “that still means they see four-times more video on their TV set than on their phone and three-times more than on their laptop”.
And when it comes to actually measuring how many eyes are latching on to your YouTube advertisement, web bots and other forms of web dupery means it is easier to gauge a ROI through traditional channels.
“Right around the world the hot topic in marketing is the lack of a standard measuring tool for digital advertising, especially for video views, where on Facebook and Instagram a view is three seconds,” argues Mitchell.
“How can that be compared with ads on free-to-air television?”
News Corp Australia’s Chief Commercial Officer, Sharb Farjami, is blunt and refreshingly honest: “I don’t know what’s working and what isn’t but a lot of nonsense is being talked”.
On the question of ROI in the digital space, the US-based Association of National Advertisers (ANA) CEO-president Bob Liodice doesn’t mince words: “many marketers are getting their money stolen”.
Digital advertising spending has reached 55 per cent of the total US ad spend, US$230 billion.
It’s growing at 14 per cent per annum, three times as fast as total spending.
The problem, says Liodice, is that only about half the digital investment actually reaches the publishers.
A recent ANA survey found US marketers lost US$7.2 billion to ad fraud in 2015, mostly from web bots, about $1 billion more than in 2014.
“Ad fraud awareness has improved but effective action is rare,” Liodice told a recent Advertising Financial Management Conference in Florida.
“It was estimated in 2015 that about US$22 billion of ad investments did not reach their intended targets, and that is expected to rise to US$41 billion.
“In Q2 2015, the ad blocking rate among the US online population was 16 per cent. It is extreme and it is growing fast.”
Not everyone agrees that there should be a retreat from digital.
Colgate-Palmolive is investing heavily in the space.
“A lot of our consumer engagement, particularly given the changing demographics in the world, is now with digital advertising,” Chairman-CEO Ian Cook said recently.
“Digital advertising is more efficient than the traditional print, television, radio, billboard type of advertising.”
Consumer products giant Clorox (think Brita jugs and Glad Wrap) is following the same path.
“We will, going forward, work with agencies that are agnostic to TV and that are going to be led by digital, and they’re going to help us take our brands to new heights in a world where digital and social rules,” Clorox CEO Benno Dorer said recently.
Other major brands betting on a big upswing in digital include: Home Depot; L’Oréal; Estée Lauder and Kimberly-Clark.
The issue of digital over legacy was a hot topic in Mumbrella’s recent survey of 1000 industry professionals, particularly how younger workers lack knowledge of the role traditional media plays.
Mumbrella’s marketing and advertising editor, Simon Canning, reported recently that industry leaders agreed “there was a skills gap growing, particularly in agencies where younger workers had little knowledge of legacy media such as newspapers, magazines and TV, skewing planning and buying towards digital channels, which they were more familiar with”.
Rachel Lonergan, head of strategy at boutique media agency, Foundation, told Mumbrella she visited many advertising agencies to talk about newspapers and was concerned by the lack of understanding younger people in media agencies had about mass traditional media.
“My observation was that the lack of knowledge in the five-years-and-under group in media agencies and creative agencies around traditional channels is pretty fatal,” Lonergan said.
“There is no sense of that scale in cohorts who see everything through that digital lens.”
Omnicom Media Group CEO (ANZ) Leigh Terry told Mumbrella that “the starting point was the key”.
“You have to start from a channel neutral position and consider all channels and dismiss them on the basis of relevance, cost and everything else,” Terry said.
Media agencies needed to make sure that staff, even if they were not consumers of traditional media channels themselves, were fully up to speed with them “because that’s your job”.
Farjami believes the digital debate is a matter of balance.
“Whilst trying new things is really important for a media industry, we should be clear about what accountability looks like. I think there is a bit of a swing back going on, a bit of rebalancing,” the News Corp Australia COO says.
Sebastian Rennie, chief investment officer of global media investment management group, GroupM, agrees.
Rennie told Fairfax Media that “it’s important that we find ways to introduce digital into the overall screen mix, because there’s definitely viewing happening there and it’s happening in increasing numbers each year, but I think you've also got to be careful that you don’t tip the balance too far”.
“There's no question TV still remains a lead media channel for us as an agency, but also for our advertisers and clients too.”
Nevertheless, it would be foolish to downplay digital platforms as channels of influence. Particularly in public relations, where chasing editorial coverage to assist a client is far more powerful than advertising.
The University of Canberra’s News and Media Research Centre released its second annual survey of news consumption in Australia recently. It is free online and well worth a read.
The survey of 2000 people found that just over half of respondents reported that social media was a popular source of news.
However, when asked for one main source of news only 18.5 per cent said social media or blogs; 37.6 per cent replied TV and 27.4 per cent said online news (40.7 per cent of 18-24 year olds and 27.5 per cent of 25-34 year olds said social media).
Radio news programs (39.6 per cent), printed newspapers (35.4 per cent) and websites of newspapers (32.5 per cent) were also widely used as sources of news.
Note the figure for newspapers: about one-third of media consumers are still reading printed newspapers. However, just 8.2 per cent said newspapers were their main source of news.
Asked which social media site they used for finding, reading, watching, sharing or discussing news, Facebook topped the lists: 45 per cent used Facebook for news. Only 15 per cent use YouTube for news; 8.2 per cent use Twitter and (interestingly) 4.1 per cent used the messaging app WhatsApp.
Rennie argues that marketing and PR practitioners need to understand how digital developments affects their clients.
However, it is not as simple as digital being best for acquisition and traditional mass media for building brands.
“It is important to get the balance right … but a lot of assumptions are being made ... and we don’t really have the data to back them up,” Rennie says. “But you can’t get away from the fact that media consumption patterns are changing and digital is changing the lives of consumers.”