In the marketing and advertising space, 2020 was a year of transformation. The huge growth in online retail and e-commerce caused by the pandemic has prompted marketers to change their strategies and set aside more of their budget for digital channels. In fact, 76% of marketing professionals plan to increase the cost of online video advertising, while 70% seek to invest more in social media stories and 68% in social media shows.

However, increased levels of competition online increase the risk of overspending on the advertising budget. Therefore, digital marketers need to 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 wasted on ineffective channels and strategies, according to a global survey of marketers around the world in 2018. For most digital marketing teams, the root of the problem lies in the lack of effective insights to objectively assess their efforts and inform decision-making. . Research from ROI Hunter’s work with hundreds of billions of customers has shown that about 50% of dynamic advertising impressions usually go to only 1% of the products in the catalog. It is even more worrying that traders have no control which 1% of their products are promoted or even see which products receive it.

This problem is complicated by the fact that product data is often found in different silos in organizations. Marketers rarely have access to product margins or rates of return, and retailers are often unaware of the advertising costs behind each item. This lack of control and central visibility means that traders can only see part of the picture. As a result, advertising strategy and costs are often based on the best estimate of a limited set of data.

Use of product data

One of the ways digital marketers can eradicate speculation and improve the effectiveness of digital advertising strategies is to use data on the effectiveness of their products to inform promotional planning. By synchronizing product data across all channels, digital marketers can unlock many new insights to achieve greater productivity. For example, merchants can identify their bestsellers based on the amount of revenue or transactions and increase the promotion.

The simplest and most logical way to use this product performance data is with a product marketing platform (PMP). PMPs enable marketers to get an idea of ​​the effectiveness of individual products in 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 product-level performance data such as margin, revenue generated, advertising costs. in different channels or number of transactions.

Marketers can even use a custom source to link business data such as inventory levels and returns for even more advanced campaigns. With this data on product effectiveness from different channels, marketers can create highly dynamic product sets based on their specific goals. PMP creates a single source of truth, allowing digital marketers to automate, scale and increase the profitability of their digital promotions.

PMP also links this integrated data to campaign creation tools. Additional performance layers built on insights (Photoshop-style template editor and product video conversion tool) make implementing large-scale dynamic ads easier and more efficient, while the data behind those ads helps bring more -high return.

Outpacing the competition

With regulations restricting the use of customer data, digital marketers need to take action by providing more effective and targeted advertising through the right channels with the right product. The key to this is the use of product data. Without it, marketers will continue to spend excessively on the wrong products and spend less on those with potential.

Product data will ultimately transform digital advertising and promotional planning, enabling digital retailers to achieve better return on investment and allocate valuable budgets more efficiently. The first step to achieving this is to collect and compare product data from different performance information channels, and the most effective way to form this single source of truth is with a product marketing platform.

Interested in hearing how leading global brands discuss topics like this in person? Learn more about World Digital Marketing Forum (#DMWF) Europe, London, North America and Singapore.

Tags: budget, digital advertising

How marketers can reduce overspend in digital advertising

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