Whether advertisers should spend on online or offline channels has been a heated debate for many years now. In recent years, it would seem that digital media has really started to tip the scales and as you can see from the chart below, 2015 was the defining year where more money was spent on online advertising than offline spend in the UK for the very first time. The trend has continued since then and at the start of 2018 we can see that there is a 60:40 split between online and offline advertising.
But the really big question is whether this rapid growth in digital ad spend is justified? Brightblue Consulting has analysed the effectiveness of online and offline media for 7 years and the findings are quite surprising.
So why have retailers changed their advertising spending habits? Well, account managers like being in control and online media offers just that. Advertisers can gather real-time feedback such as comments by customers and adjust the campaign accordingly almost instantaneously. Whereas making a change to an offline campaign is often a lengthy process.
With online media, marketers have the ability to target their exact target audience, by demographic, location and even time of day. Its relatively cheaper than its offline counterpart since both its production cost and execution cost is significantly lower. It’s also much easier to set up an online campaign for your average marketer as the process is a lot simpler.
Offline media, however, is known to have a lot more barriers. To launch a TV campaign for example, you would often need the help of a third-party company in the form of a media agency to buy the ad space and in some cases, you would also need a creative agency to produce the content if the media agency does not offer this.
But offline has its advantages too. One of the main benefits to offline media is its relative longevity of impact and reach. For example, let’s imagine you are scrolling on your Facebook newsfeed, seeing what your friends got up to over the weekend. You might or might not even see the display banner ad for a denim jacket on the side of the feed and if you do click on the ad, your attention can easily be swayed when you get a Facebook notification. In contrast, you can probably recall what the John Lewis Christmas TV ad was like a few years ago.
It’s also possible that the impact of online media advertising is overestimated. Someone might search up ‘denim jacket’ on Google and go on to buy it through a Pay-per-click campaign, where advertisers pay to get more visibility on a search engine, but the motivation for searching ‘denim jacket’ in the first place could have been from seeing it on a TV advert.
Offline advertising also offers tremendous reach. You can reach millions of people from a TV advert whereas the online reach is much smaller in comparison. By conducting online media, you are often alienating a proportion of the population that aren’t using the internet such as the elderly and children. The success of digital media is also contingent on having reliably trackable data, with more and more cybersecurity threats, bots crawling the internet (potentially making you pay for non-human clicks and views) and human errors in setting up a tracking system, this is becoming more of an issue.
What Brightblue Consulting has found through working with clients with different proportions of online and offline spend is that bigger clients tend to benefit more from offline advertising simply because the reach is massive. However, for smaller companies, online media might be a better choice if you have a limited budget and want to hit your target audience more efficiently. In particular, online retargeting campaigns, where advertisers target customers who have shown an initial interest in the product i.e. people who have bounced off your page previously, tends to perform very well. However, retargeting can only work if your brand is known, or at least visible, in the first place and you can only target a small pool of people.
The chances are if you fit the mould for an advertiser target audience and they run multiple online campaigns, you might be targeted across several online channels, but seeing the ad for a denim jacket that you didn’t want first time around isn’t going to make you buy the second time. This is one type of wastage that occurs in online media, another is cannibalisation, when an online channel steals a view or a click from another online channel. The most common example would be SEO and PPC. You might search for your favourite brand but click on the PPC advert on the top of the search results as opposed to where they would appear naturally. In essence, these two online channels are directly competing with each other and online advertisers end up paying more.
Both online and offline advertising have pros and cons. And the most successful campaigns will strike a balance between the two depending on size of the company and the objective. In our experience working with clients at Brightblue Consulting, we find that on average big brands get the best bang for their buck when they reverse the trend and spend 58% on offline media and 42% on online media. So, if you’re a retailer looking to drive footfall – or even build up online sales you probably shouldn’t be putting all your eggs in the digital advertising basket.