Today, brands have more opportunities than ever to connect with consumers through a growing number of channels, including emerging media, in-person, digital and e-commerce. In line with the growth of different touchpoints, global digital media spend has grown by 42% in 2022 and the share of e-commerce sales by 61% compared to 2018 – mainly accelerated by the COVID-19 pandemic and shifts in consumer behavior. This comes at a time when this new generation of consumers, Generation Z (people born between 1997 and 2012), spends the most time online of any generation.
Surprisingly, offline sales are equally as strong. According to eMarketer, even post-pandemic, more than eight out of ten sales worldwide took place in brick-and-mortar stores. Brands that focus solely on e-commerce success miss out on $0.20 of opportunity for every $1 spent. So, how can brands better optimize their investments in this omnichannel world?
The Omnichannel Impacts of Marketing Investments
While digital is clearly on an upwards trajectory and should not be neglected by brands, winning with digital requires a holistic understanding of its performance relative to the omnichannel reality of customers’ purchasing habits today and in the future. The chart below shows an example of how much of a sales impact different marketing channels have online and offline.
To continue to build out a successful omnichannel strategy, marketers need to understand how to best maximize their ad spend in today’s environment to create value for their company. As outlined in our ROI Genome Report, there are a few key considerations and media principles to follow:
- Understanding and embracing emerging media: Emerging media channels such as streaming video and digital audio (e.g. podcasts), deliver above average ROIs, yet their share of marketing spend remains low. These marketing activities, which effectively drive both online and offline sales channels, can be scaled further.
- Leveraging conversion channel synergies: Retail media ads can be a highly effective omnichannel tactic that can drive sales both on and off your individual retail channel. For example, retailer-specific ads (e.g., Amazon) lift sales both on and off Amazon (the intended platform) and have a significant halo impact on D2C and other retail channel sales.
- Connecting the short and long-term brand impacts of marketing: ROI from brand marketing is consistently higher than performance marketing. Additionally, increases or decreases in brand marketing investment have a direct impact on performance marketing ROI. As proven by 20+ years in ROI Genome research, brands should continue or even increase investment in brand
- Layering and stacking marketing activities: One of the reasons marketing’s performance should not be analyzed in isolation is that media channels work together and complement one another. As brands increase the number of media channels, ROI increases as well.
- Building pricing power with advertising: Consumers are sensitive to price changes, which can be alleviated through brand building through advertising. The value of investing in brand can be significant if campaigns are analyzed and optimized holistically in the short and long-term.
Align Measurement Programs with Organizational Structure to Achieve Commercial Intelligence
In today’s rapidly evolving customer landscape, the lines between online and offline sales channels across different marketing touchpoints have become increasingly blurred. Brands looking for sustainable growth must recognize that and take a true omnichannel measurement approach that reflects the environment in which they and their customers are operating.
But this takes more than adding another channel to the mix. It requires brands to break down internal silos by removing barriers between functions, KPIs, and activities. Brands need to seamlessly measure multiple business drivers and the role of marketing activities in influencing different elements of the customer journey. Only then can they evaluate business performance holistically to achieve commercial intelligence.
Download our latest ROI Genome Report, Digital Marketing is Good. Digital Alone is Bad., for all stats and insights into multi-channel marketing measurement in an omnichannel world.