There are major obstacles to using brand awareness as a marketing objective
Over the past decade marketers have relied on quantity based measurements as a proxy for campaign performance. The volume of impressions, clicks and likes indicates that people see the ads and find them relevant and compelling.
But with the increase of ad blocking and bot frauds, as well as demand for more data transparency, evidence suggest that traditional metrics do a poor job is measuring sales, engagement and, ultimately, ROI. A study from the IAB and Ernst & Young confirmed this trend, estimating that $8.2 Billion are lost as a result of traffic frauds, bots frauds, ad block and other threats.
Specifically, the IAB found the following major reasons (the full report is in PDF form here):
- $4.2 billion is lost due to “non-human traffic”
- $1.1 billion is lost due to “malvertising-related activities”
- $2.4 billion is lost due to “infringed content”
Therefore, the marketing industry needs to find a new measurement for its audience quality, in particular for brand awareness campaigns, where the quality of the audience and ROI are often hard to measure. In this article we will answer these questions:
- 1. Why advertisers are still investing marketing money on brand awareness?
- 2. Is there a direct link between awareness and ROI?
- 3. If there isn’t, how do marketers justify the spend on awareness?
- 4. Is brand awareness it still an option today?
No one sees your impressions
The “non-human traffic” part originates from the fact that few people do not understand the true definition of an “impression.” The term does not refer to one human being seeing an advertisement one time. In reality, it is one web browser making one request to be served with one advertisement from one ad network. That’s all.
We might start from the very beginning and define what brand awareness is in the first place:
“The extent to which a brand is recognized by potential customers, and is correctly associated with a particular product”.
According to this definition, brand awareness is just a form of advertising that reminds the audience of the values this brands wants to be recalled for. We all agree that the way brands position themselves into the minds of consumers are key to the success of a company.
But this does not guarantee that any human will see an impression.
Vanity metrics: no direct impact on ROI
Measuring brand awareness divides marketing. It is viewed by some as a pointless exercise, an accumulation of vanity metrics that bears no relation to marketing ROI.
For a company to justify the marketing budget, success has to be determined by the number of sales and average basket value (for ecommerce), by conversion rates and CPAs (AdWords), by the ranking (SEO) or by financial metrics (margins, profit, revenue). Thanks to the advanced analytics tools, we have got access to all types of customers’ data and we know where our money is gone. Like someone says “what you cannot measure, you cannot improve”. This is true, if I know that my AdWords campaigns have a lower than average conversion rate, I can take actions and improve them. If I know than my affiliate is making 20% less sales than last month, I can find out why and then give recommendations for improvements.
The other school of thought, advocated by Bryan Sharp, contends that one of the strongest drivers in making consumers buy is simply the ability to recall that product. Sharp states that brand recall is improved with a consistent and ubiquitous logo and tagline, by celebrity endorsements and traditional mass marketing.
This helps to explain why brands push so much money into sponsorship: by partnering with another global brand they increase their exposure to a wider audience.
Think about Chevrolet sponsoring Manchester United. This doesn’t mean that every Manchester United fan has to run to a car dealer and buy a Chevrolet just because Chevrolet is the sponsor of MU team. Nobody expects this to happen, yet the car manufacturer pays MU $71 Million USD per year for the privilege.
As the CEO of Chevrolet says: “Manchester gives us access to a worldwide audience, even here in the US, which is rare”.
Online the same phenomenon can be observed. According to a survey by emarketer.com, 88% of companies use Social Media for brand awareness online. If we look at what metrics these companies use for measuring these are the findings:
- 94% use awareness of a company/ product
- 79% amount of media exposure generated
- 63% use lead generation
From these data it emerges that none of those companies use sales or ROI for measuring a brand awareness campaign. Yet there are expectations people will buy what it has been promoted through sponsorship. Still there isn’t any evidence that awareness contributed to ROI, let alone measuring how much money it generated.
So there is pressure and the need to measure exactly how much brand awareness is producing in terms of ROI and this is something marketers find very hard to do, especially online. While there are some measurements that help understand the impact of brand awareness on digital marketing, it’s still very difficult to come up with a great way of measuring it.
Not all audiences are created equal
Even if marketers were able to measure a direct effect of brand awareness campaigns to sales, they would be still very far from assessing the financial impact of awareness. The reasons are explained here. To be able to get to a sale, digital marketers need access to a target audience that might be interested. And this is how marketers justify their budget spend for online brand awareness campaigns. If marketers can safely say that brand awareness gives access to an interested audience, then they cover their own backs and brand awareness becomes a no brainer. This is as far as marketers can go.
But there is a critical point to understand: not all audiences are created equal.
While ROI is easily measured with direct marketing, online sales, lead generations campaigns, with brand awareness you only create “awareness” and this doesn’t guarantee you anything. This might not bring you any single sale. People don’t buy Chevrolet just because the CEO pays $71 Million to MU every year. Even so, how many cars would people need to buy just for Chevrolet to break even? Since a Chevrolet costs on average $25,000 USD, to be able to make $71 Million, the car manufacturer should sell 2,840 cars a year as a direct effect of sponsorship just to break even.
Let alone the fact that we don’t know how big is the MU audience in the US for Chevrolet or how massive is the audience in the UK and in any other parts of the world where MU is expected to show the sponsor on their t-shirts. We will never know if 2,840 cars can even be sold because we don’t know how big our audience is and how interested it is in Chevrolet cars.
As you can see generating a profit from your awareness campaigns can be very difficult. From the moment in which you launch the product to the market to get brand awareness, to the moment in which you see the first sale, months can go by. And even so, you might not have any clue from where this sale is coming from or why is coming, whether it’s a result of your brand awareness campaign or other campaigns.
Would these risks be taken and accepted for other marketing channels, especially online? Would marketers spend $71 Million on AdWords per year on brand awareness?
Trying to avoid publishers’ fraud
Some digital marketing professionals started to create frameworks to identify and measure the quality of an audience, to allow marketers to become aware of what they spend their marketing budget. The framework looks at various perspectives of the audience: how is the audience data collected, is it reliable? How fresh is it? How much does it cost? And how does it perform?
The answers given in the framework confirm something about audience data that we already know: that audience that is proprietary (collected from the efforts of the company, through newsletter for example), that audience that deliberately gives the permission to be used for marketing purposes is, at the same time, the most expensive and the best converting into sales.
Now with this in mind, how can be marketers 100% sure that they spend their marketing money on the best audience out there? Beside the fact that the framework might offer good guidelines, it still doesn’t solve the issue of predicting how an audience, that is not proprietary or ready to be pushed a marketing message, will react to a new product.
The risk of generating zero ROI remains still. Other marketers have found mathematical formulas to calculate the perfect CPM, that one that gives the best ROI for a marketing campaign. They call it qaCPM (quality cost per mille) which, as opposed to quantity, will promise to capture quality of an audience by the volumes and relevance of most probable buyers.
Possible solutions to the problem
In conclusion, brand awareness both on digital devices and offline presents too many risks associated to ROI, quality of audience, measurement. It’s almost impossible to understand the impact of brand awareness on sales, it’s very difficult to measure the quality of an audience that we have access to due to issues like ad block, bot frauds and due to the rising demand of more data transparency. Yet marketers and companies spend millions every year of brand awareness and use vanity measures to justify their spends.
The missing link between awareness and ROI is something marketers cannot forget, it’s critical factor to take into consideration, it affects negatively the campaign success. In my opinion, brand awareness cannot be considered an option today. If we want to reduce the risks of being exposed to a not receptive audience, even a fraud audience, we need to rely on other metrics to calculate the financial impact of brand awareness, “brand recall” is simply not good enough. We cannot yet compare brand awareness campaigns to CPC, Affiliates, SEO and Email marketing campaigns. The latest are much more reliable, they measure sales, not exposure or brand recall. In light of these issues, advertisers can apply the following tactics:
- Start doing more CPL and CPA campaigns. The risk of being exposed to traffic fraud is reduced.
- Block countries with high fraud rates. China, Venezuela, Ukraine, Singapore are showing high traffic fraud rates, according to Ad Week
- Start tracking Ad Block users on websites using Google Tag Manager