In the marketing and advertising space, 2020 was a year of transformation. The huge growth of online retail and e-commerce brought about by the pandemic has forced marketing professionals to change their strategies and dedicate most of their budget to digital channels. In fact, 76% marketing professionals plan to increase spending on online video ads, while 70% want to invest more in social media stories and 68% in social media feeds.
Increased levels of online competition, however, increase the risk of overspending on advertising budgets. Therefore, digital retailers must take steps to ensure that highly targeted ads are delivered through the right channels to reduce unnecessary costs.
Understanding the problem
Average from 26% Budgets are spent on inefficient channels and strategies, according to a 2018 global survey of marketing experts around the world. For most digital marketing teams, the root of the problem lies in a lack of effective insights to objectively assess their efforts and inform decision-making. A study of Hunter’s ROI work with hundreds of clients with billions of funds spent found that about 50% of dynamic advertising impressions typically go to just 1% of products in the catalog. What is even more worrying, traders have no control which 1% of their products are promoted, or even visibility in which products they get.
This problem is exacerbated by the fact that product data is often found in different silos in different organizations. Merchants rarely have access to product margins or return rates, and merchants often don’t know how much they spend on ads behind each item. This lack of control and central visibility means that retailers can only see part of the picture. As a result, advertising and spending strategies are often based on best estimates from limited data sets.
Exploitation of product data
One way digital retailers can eradicate speculation and improve the effectiveness of digital advertising strategies is to use performance data of their products to inform about promotional planning. By synchronizing product data from all of their channels, digital retailers can unlock a host of new insights to drive better performance. For example, merchants can identify their best-selling products based on the amount of revenue or transactions and increase promotion.
The simplest and most logical way to use this product performance data is through the Product Marketing Platform (PMP). PMPs empower retailers with insight into the performance of individual products through their channels. Unlike more well-known customer data platforms, which focus on collecting and integrating user-level data, product marketing platforms focus on collecting and integrating product-level performance data such as margin, generated revenue, spending on ads in different channels or number of transactions.
Marketing professionals can even use a custom source to link business data such as inventory levels and returns for even more advanced campaigns. With this multi-channel product performance data, retailers are able to create highly dynamic product sets based on their specific goals. PMP creates one source of truth, enabling digital retailers to automate, scale and increase the profitability of their digital promotions.
PMP also links this integrated data to campaign creation tools. Additional execution layers built on top of insight (a photoshop-style template editor and image-converting tool) make implementing dynamic ads much easier and more efficient, while the data behind those ads helps deliver higher returns.
Maintaining an advantage over the competition
In addition to regulations restricting the use of customer data, digital retailers must take action by delivering more effective and targeted advertising on the right channels with the right product. The key to achieving this is to use product information. Without it, retailers will continue to spend too much on the wrong products and spend too little on those with potential.
Product data will ultimately transform digital advertising and promotional planning, enabling digital marketers to achieve better return on investment and allocate valuable budgets more efficiently. The first step towards achieving this is to collect and compare product data across different channels to inform about performance, and the most effective way to form this unique source of truth is a product marketing platform.
Are you interested in the world’s leading brands personally discussing such topics? Learn more about World Digital Marketing Forum (#DMWF) Europe, London, North America and Singapore.