Despite a three times increase in the share of digital marketing spends over the last five years by Indian organisations, the measurement practices have not able to keep pace. Hence, organisations are leaving significant value on the table, a report unveiled by Boston Consulting Group (BCG), in collaboration with Meta, said. “The journey of customer is very complex, it’s very hard to track which digital marketing campaign is creating what kind of impact. The ability for measurement on how and which campaign will create real and true business impact is far behind from where it needs to be,” Shaveen Garg, managing director and partner, BCG told BrandWagon Online.
As per the report, there has been a 12%-34% jump in the share of digital in the total marketing budget in less than five years. In addition, digital, the fastest growing marketing channel in India, is expected to overtake TV soon. In digital-first organisations across industries, digital is already the key channel, driven by performance spend, the report added.
According to Pratham Hegde, director and head, Measurement, Facebook India, multiple reasons have caused the disparity between growth in digital marketing spend and progress of marketing measurement. Firstly, the digital landscape has evolved very fast, turning into a complex ecosystem, Hedge said. The products and tools that are required in this complex ecosystem are being built but have not kept pace, he noted. Along with that, the ecosystem is itself changing with a lot of focus on privacy, a movement towards more aggregated delayed data, he added further.
The new report also shows how inadequate measurement is affecting the ROI of marketers. 65% higher cost of acquisition is being incurred due to poor measurement. Measurement is an after thought for many advertisers as 70% organisations underinvest in the segment. Only five percent of organisations have quality data that can enable key business decisions, the report added further.
A higher focus on measurement as a strategic priority can unlock significant value with 60% sales uplift, 10x return on ad spends and 25% increase in gross margin, the report said. For the purpose of this study, BCG and Meta collaborated with marketing measurement specialists including Adobe, Analytic Edge, AppsFlyer, Cartesian Consulting, Nielsen, and RainMan Consulting as well as 18 digital-first organisations from India across five key industries including financial services, edtech, e-commerce, travel, media or OTT.
To measure efficacy, it is important to capture what is an incremental effect an organisation is getting from a particular digital marketing campaign, BCG’s Garg said. “Ability to measure that incremental benefit is the best way for you to know where someone needs to invest or not. There is not a single method to measure incrementality, there should be a mix of models,” he noted.
“Advertisers should invest in running experiments on how their media works to be able to understand the true incremental impact that it has on business. In order to do this, what companies need to do is build these capabilities, invest in data and technology, because it is a very data-backed methodology. It is also important to promote test and learn culture,” Garg stated.