In marketing and advertising, 2020 has been a year of transformation. The huge growth in online retail and e-commerce caused by the pandemic has led marketers to change their strategies and spend more of their budget on digital channels. In reality, 76% of marketers plan to increase their spend on online video ads, while 70% are looking to invest more in social media stories and 68% in social media feeds.
Increased levels of online competition, however, increase the risk of advertising overspending. Therefore, digital marketers must take steps to ensure that highly targeted advertisements are delivered through the right channels to reduce unnecessary costs.
Understand the problem
Average 26% budgets are wasted on ineffective channels and strategies, according to a 2018 global survey of marketers. For most digital marketing teams, the root of the problem is a lack of actionable insights to assess objectively their efforts and inform decision-making. Research of ROI Hunter’s work with hundreds of clients with billions in spend found that roughly 50% of dynamic ad impressions typically go to just 1% of catalog products. More worryingly, marketers have no control over who 1% of their products are promoted, or even visibility on products that receive it.
This problem is compounded by the fact that product data frequently resides in disparate silos across organizations. Marketers rarely have access to product margins or return rates, and merchandisers often don’t know the ad spend behind each item. This lack of control and central visibility means marketers can only see part of the picture. Therefore, ad strategy and spend is often based on a best guess from limited data sets.
Use of product data
One of the ways digital marketers can take the guesswork out and improve the effectiveness of digital advertising strategies is to use their product performance data to inform promotional planning. By synchronizing product data across all of their channels, digital marketers can unlock a wealth of new insights to improve performance. For example, marketers can identify their top-selling products based on the amount of revenue or transactions, and speed up promotion.
The easiest and most logical way to use this product performance data is through a product marketing platform (PMP). PMPs allow marketers to gain insight into how individual products are performing across their channels. Unlike more well-known customer data platforms, which focus on collecting and integrating customer-level data, product marketing platforms focus on collecting and integrating performance data at the customer level. of the product such as the margin, the revenue generated, the advertising expenditure in different channels or the number of transactions. .
Marketers can even use a custom source to connect business data like inventory levels and returns for even more advanced campaigns. With this cross-channel product performance data, marketers are able to create highly dynamic product sets based on their specific goals. A PMP creates a single source of truth, enabling digital marketers to automate, scale, and increase the profitability of their digital promotions.
A PMP also connects this embedded data to campaign creation tools. Additional execution layers built on top of the information (a Photoshop-style template editor and a tool to turn images into product videos) make deploying dynamic ads at scale simpler and more efficient, while the data behind these ads help bring in higher returns.
Stay ahead of the competition
With regulations limiting the use of customer data, digital marketers need to take action by delivering more effective and targeted ads to the right channels with the right product. The key to achieving this is the use of product data. Without it, marketers will continue to overspend on the wrong products and underspend on the ones with potential.
Product data will ultimately transform digital advertising and promotional planning, enabling digital marketers to achieve greater ROI and allocate valuable budget more efficiently. The first step to doing this is collecting and compiling cross-channel product data to inform performance, and the most effective way to train this single source of truth is with a product marketing platform.
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