Chief marketing officers expect to increase spending on digital advertising over the next year, with this type being seen as more effective than traditional media channels, according to new data from Nielsen.
Nielsen’s first annual CMO report found that a full 82 percent of respondents expect to up their digital media budgets by an average of 49 percent as a percentage of their total advertising spend in the next 12 months.
In comparison, only 30 percent of marketers intend to invest more in traditional media – despite 51 percent of respondents ranking linear TV as “very” or “extremely” important. Nielsen found 44 percent of respondents anticipate a decrease in traditional media budgets.
“Digital ad spend has eclipsed traditional channels and we expect that trend to continue,” Nielsen said in the report.
OTT TV/connected TV is not seen very favorably by marketers yet and was the lowest ranked digital channel, with fewer than 8 percent of respondents considering it “extremely” important. According to the report, nearly a quarter of participants ranked OTT TV/CTV as “not so” important or “not at all” in regards to their current media strategy. These figures could change, Nielsen pointed out, as the channel becomes more well established.
When it comes to effectiveness, 13 percent of respondents ranked linear TV as extremely effective, compared to 31 percent for social media, 27 percent for mobile and 21 percent for programmatic channels.
One issue that CMOs seem to face regardless of media channel is a strong confidence in the ability to accurately quantify ROI. A large majority of respondents expressed at least some level of confidence for ROI for traditional channels (59 percent) and significantly higher for digital media (74 percent). However, when it came to being “extremely confident” in quantifying ROI, the numbers dropped significantly to only 4 percent and 5 percent for digital and traditional media, respectively.
Only one in four marketers reported high levels of confidence in measuring the ROI of their media spend regardless of type. Tied into that, Nielsen found 79 percent expect to increase their investment in marketing analytics and attribution in the next 12 months.
As for the discrepancy of perceived ROI measurement capabilities between traditional and digital channels, Nielsen indicated it could be due to traditional media often seen as a “reach medium.”
“It’s further from the point-of-sale and arguably harder to connect directly to a purchase,” Nielsen noted. “Traditional media remains critical, as many marketers have attested, to brand building and it’s associated top-of-funnel marketing metrics including brand awareness, recall and favorability.”