Say yes to digital, but with caution

The critical debate surrounding digitalization initiated by the German Media Congress in January in Frankfurt almost seems like a journey back in time. Since then, an increasing number of marketing managers from reputable companies such as Deutsche Telekom and Philips have plead for more prudence with regard to adapting digital technologies in marketing and investing in digital advertising. Are conventional forms of advertising about to experience a comeback?

No, they are not calling for a dogmatic return to print or TV advertising. Neither are they declaring war on digital transformation in general. Nevertheless, the most recent sceptical statements on digitalization  made, for example, by Hans-Christian Schwingen, Chief Brand Officer of Deutsche Telekom, have a surprising resonance among professionals. As the brand manager of Europe’s largest telecommunications provider has explained, too much budget is being allocated to digital advertising and communication measures without verifying their efficacy and their ROI. As an example, he called out video advertising on Facebook, in which many marketers invest massive budgets without effectively reaching their target groups. After all, as Schwingen explains, most Facebook users (85 Percent) stop watching the video clips after just a few seconds.

Industry experts see another weakness in the lack of transparency of the actual effects of digital advertising. CMO of Procter & Gamble, Marc Pritchard, therefore suggested a four-point transparency review for the digital industry at this year’s annual International Advertising Bureau (IAB) conference. It covers topics such as standardized assessment and testing of the visibility of digital communication, transparent agency agreements and measures to combat click fraud (source: Horizont 6/2017 “Werdet erwachsen”).

Digital frustration versus digital inebriation

Studies like the one carried out by the University of Leipzig’s Institute for Strategic Communication entitled “Medium-sized company communication in 2016 – study on the professionalization, digitalization and management of corporate communication
 show that this criticism is justified. Almost 60 percent of the medium-sized companies surveyed described their communication as highly digitalized. Only 10.7 percent, however, align the increasing digitalization with a broader strategy.

Although advertising budgets are still clearly dominated by conventional forms of advertising such as TV, newspapers and magazines, at the beginning of 2017 according to Statista , they were declining in relation to investments in digital advertising. Hans-Christian Schwingen calls this trend “digital drunkenness” and Thomas Schönen, Head of Integrated Brand & Communications at Philips for the DACH region has called it “digital inebriation “. What impact is this criticism having on digital advertising budgets?

Are print and TV making a comeback in the advertising market?

That’s probably a bit extreme, but there is currently a trend toward returning to traditional print and TV media in the advertising budgets of large companies. For Jürgen Scharrer, Chief Reporter at Horizont, this is no surprise in times of fake news, non-transparent traffic reports and click fraud, as well as extremely low awareness levels for banner ads and videos. In his opinion, traditional journalism is now also regaining importance for society and politics, especially now that a not inconsiderable number of people are obtaining information about world events exclusively via Facebook . Moreover, with traditional media brands and targeted planning, advertisers are not running the risk that their ads will end up on fake news sites. They also avoid the risk that their ads will be displayed on politically controversial platforms via programmatic advertising, thus bringing their company and brand into disrepute. The main reason that the TV market share is strongly increasing again in the USA is the unbroken high reach of this channel and, especially with large brand campaigns, the proven effect.

More analysis, less activism

Also in the trade fair industry, sound judgement is required with regard to the interaction between suitable marketing channels. New technical possibilities – beacons, augmented and virtual reality, to name just a few – have a lot of potential. But, in the end, they should first be tested to determine whether they achieve the desired effect. Less aimless activism with regard to everything digital and more analysis and transparency that take a sober view of results such as ROI and reach are required when it comes to distributing advertising and communication budgets across conventional and digital channels.

The result will probably not be surprising and serve to slow the general requiem for conventional marketing disciplines. Ultimately, the right mix of digital and traditional communications decides whether or not you reach your target groups. Focus should always be placed on the individual communication task and not only the distribution path thereof. It is therefore no big surprise that trade fairs as the central marketplaces continue to have an unbroken importance in the marketing budgets of many companies.

For more information about important Digital trends 2017 also read our articles the most important digital trends 2017, Usability test for the new Navigator-App: A good result, and our interview Mobility 4.0 – study on digital transformation in mobility & logistics.

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