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Reallocating marketing budgets to drive growth


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From Infocus Mekong Research

Published in: Marketing
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Reallocating marketing budgets to drive growth

  1. 1. Reallocating marketing budgets todrive growth The Google story beginsin1995 at Stanford University, Google wasfoundedbyLarryPage and Sergey Brinwhile theywere Ph.D.studentsatStanfordUniversity,California. OnSeptember1997 they registered the domainname Facebookwaslaunchedonby Mark Zuckerberg andEduardo Saverinon February2004 while bothof themwere studentsatthe Universityof Harvard. Today,these twogiants capture 25% of the global advertisingspendand61% share of global online advertising. By2018, according to mediaagencyMagna, forecaststhatdigital mediawilltake 44 percent of all ad moneyspentgloballyin2018 reaching50 percentby2020. Source: Statista
  2. 2. IS VIETNAM FOLLOWING THE GLOBAL TREND? Is Vietnambehavingthe same as the restof the world? Simple answer, NO,TV adspendisstill triple the size of on-line spend, comparedtothe restof the world. TODAY’S VIETNAM DIGITAL BEHAVIOR IS HIGHLIGHTED BY…  Average 2.5 hours / day spentontheirmobile phones  70% of the mobile phones are smart phones by 2018  67% internetpenetrations  85% of internetusersusedmobile togoonline  60% plusof the smartphonesare inrural areas  7th largestnumberof active Facebook usersglobally  5th highestusage of Youtube globally As seenabove,the issue isdefinitelynotreach,asVietnamese are on-line /onmobile andoften.So, whatis drivingthe disparitybetweenone-line audiencesandAdvertisingspend? A simple searchforthe answeris to lookat Vietnam’s neighbortothe North,China,todaythe world’s biggestconsumerof digital everything. THE EVOLUTION OF CHINA’SDIGITAL AD BOOM 2004-2012 Back in 2014 Chinawasa mirrorimage of Vietnamintermsof advertisingspend.However, TV advertisingwasnotworkingasbefore,due tofragmentationandthe increase of on-lineactivities,But TV had a maturedsystemof reach& frequency(GRP),allowingadvertiserstobetterunderstands their returnon investment,whichDigitaldidnot>Hence investmentwaslimitedonDigital because the was no wayto understandhowimpactful thisnew formatof advertisingwas. Hence crossmediainvestment was a guessinggame andnotoptimized,drivingthe continuedspendonTV THE BREAKTHROUGH SOLUTION 651 832 1,259 1,511 1,722 1,840 1,865 16 23 31 87 199 376 601 2011 2012 2013 2014 2015 2016 2017f TV Radio Newspapers Magazines Outdoor Internet Source: GroupM –This Year Next Year Report (Vietnam –Sep 2017)
  3. 3. In 2009, Miaozhen (China’sDigital AdMonitoringCurrency)suggestedamore complete &practical way to understanddigital advertising,bydevelopingaconsistentmeasurable systembetween TV andDigital viascientificplanning, whichwasbasedontwokeypoints.  We cannotignore the fact that like TV,whenonlineadisexposed,people getsome impressions of a brand  Because onlysofewwill click,we cannotignore non-clickers Aftermassive datacollaborationMiaozhen,MillwardBrownandLightspeed,the conceptof IGRPwas born inChina,aheadof the rest of the worldin2010. Today,due to Miaozhens’sdigital,systems,the ChinaMarket digital spendnowoutweightsTV andhasthe largestdigital adspendglobally. GOOD NEWSFOR VIETNAM In Vietnam,we are nowable toprovide advertiserswith the same advantagesChinaexperiencedto drive digital growth…  Optimizationandplanningsoftware(X-Reach) tomaximize campaignreach /frequency while minimizingcampaignspend  Provide youwithinandout of target resultbypublisher/channel,drivingpublisherstobecome more transparentand effective ontheirplacement  Provide datanormsto compare your campaignversusthe market  Maximize yourmarketingmix betweenTV anddigital tooptimize youroverallcampaignspend and reach  The onlyholisticsolutionscoveringall digital devicesincludingMobile BUDGET ALLOCATION
  4. 4. Budgetallocationshould be placedbasedon yourmediaobjectives,eithertogain higherreach or a higherfrequency.X-Reachallowsyoutoplotandsimulate yourdesiredimpacttooptimize youroverall campaignstrategybefore youspendanymoney,byeitherAchievingfixedreachwithlowerbudget or Achievingthe Max reachwithinafixedbudget Example Thisnewcampaignshouldreach 50% of Femalesfrom20 to 44 years witha frequencyof 3+ times. The nextstepfor yourmediaagency wouldbe togo the planningtool andcome back withan exercise similartowhatwe see below Source: Miaozhen Systems CAMPAIGNRESULTS  There are 4 optionsto have a 50% reachwitha 3+ frequency  We can see differentoptionsintermsof investmentinGRP’s  NextStepisto inputthe Scorecardsand understandthe best option Source: Miaozhen Systems As witnessedabove, Option4,witha mix of 300 GRP’s on TV and140 iGRP,can achieve the 50% reach required.
  5. 5. Eventhere isa duplicationof 8%meaningyouwouldreachtheminbothplatformsit givesusthe best budget.Afterunderstandinghowtoallocate the moneythe nextstepwouldbe totrack andunderstand the performance of yourcampaign. Thischart can helpyouunderstandif yourobjectiveswere achieved ornot, isthe reach curve of your campaignvs initial planorvsindustry,itshouldlooksimilartothis WHAT WE HAVE LEARN *) The campaigndid notachieve the objectivesasplanned *) The performance of the campaignwasbelow marketnorms *) The campaignonlyreaches 30% of the populationwith3+ THE FINAL SOLUTIUON So,why isVietnambehavingsodifferentlythanthe restof the world,whenitcomesto digital media spendvsactual audience behavior. The simple answeristhatbefore 2018 mostadvertisershadnoideathat all theyrequire tomaximize theirdigital spend,isalready available inVietnamtodayviaInfocusMekongResearchandthe Miaozhen adMonitorngand Planningsolutions. By identifyingyourRoIondigital adspend,like China,10yearsago, he marketwill change andjointhe restof the worldsoon,where 50% of ad spendisDigital. 0% 10% 20% 30% 40% 50% 60% 70% 80% 1+ 2+ 3+ 4+ 5+ 6+ 7+ 8+ 9+ 10+ Reach% Brand X Market Norm
  6. 6. KEY QUESTIONS TO CONSIDER THE BEST TOOL TO TRACK YOUR CAMPAIGN Q1. Is there a Third-partybiasfree measurementsystemavailableinVietnam. (asthisisbyfar the safest and mostcost-effective meanstounderstandingyourdigital ROI,the same waytodaythe industryuses a third-partymeasurementTV Audience Measurement) Q.2 Which companycoversall potential devices (PC,Mobile,WebandApp),especiallymobile asMobile isthe future of Digital? Q3. What Data normsexisttocompare my performance? Q4. What companyhas the largestreach intermsof coveringmultiple mediachannels?(Example Local and internationalAdNetworks,GDN,Youtube, Facebook.Unfortunately,nobodycantrackFacebook nowadaysinVietnam.) Q5. Which clientstothese companiesworkwith?Experiencecounts Q6. Ask forsome sample reportsof whattheyhave done. RicardoGlenn Digital MediaDirector IFM/ MiaozhenSystems