As advertisers look for new ways to drive growth in 2023, they should take fresh stock of their media performance. Those that better manage media agency relationships and internal processes will improve their ROAS. Those that don’t, risk being taken advantage of by media agencies; and profit-margins and competitiveness could suffer.
In a bid to compete, the shift to digital channels and technologies has created huge opportunities. For example, the ability to personalise communications with the “always-on consumer”. This however, has also made it harder to stand out – especially for challenger brands.
In this article, we explore some of the ways advertisers can improve media performance in 2023.
Ad spend growth trends for 2023
To understand how we can improve media performance in 2023, we need to understand how the market fared in recent years – particularly as the economy and consumer behaviour has changed drastically.
Not surprisingly, since 2020, the advertising market has seen major adjustments. Despite the pandemic impacting various media channels – with traditional outlets like out-of-home (OOH) advertising being hit the hardest – Statista predicted ad spending in this area will grow to 37%.
This follows the trajectory that digital ad spend actually grew in 2020:
- Facebook and Google will likely still reign supreme in this space – owning 23.7% and 28.6% net ad revenue share in 2021.
- One we’re regularly told to watch is Amazon, which has seen unmatched ad growth in recent years (they turned clicks to sales in 2020, resulting in a revenue rise of 77% year-on-year to more than $6.9bn).
In particular, video-on-demand and subscription-based media outlets saw the greatest growth – up 14.3% in 2021 versus 2020.
It’s great to see growth! With it, we want to make sure advertisers get the most from these increased media investments and so the top tip for 2022 is this: Leverage media audits and performance reviews.
Without it, we often find that media agencies are marking their own work, which creates a challenge to see how effective campaigns truly are.
This lack of transparency makes it difficult to see the real ROI. Media auditing and media performance reviews are therefore going to be even more crucial for advertisers for the next few years to get ahead of their competitors.
How to improve media performance in 2023
Here are six practical steps you can take to boost your media performance this year:
1. Learn media management best practices
In order to achieve the most from your media investments, you need to understand the right media management best practices. There are a wealth of free insights available online. You can also look at online training courses that offer more bespoke support to your challenges with expert 1-2-1s.
2. Assess the quality of your media agency contract
After putting a plan in place to improve internal skills, assessing your media agency contract is a great next step. There are tools available that can help you instantly evaluate your current media contracts and understand where improvements can be made to follow best practices.
3. Conduct a holistic media audit
If steps one and two raise areas of concerns, you can run an audit to highlight areas that need improving so that you gain better media performance. Depending on your business and your specific needs, a holistic media audit might include a combination of:
- Pool benchmarking – If you don’t know how competitive your media prices are versus the market average, then benchmarking is a good place to start - especially as we’ve seen that the variance between the cheaper pricing versus the most expensive pricing can be up to 70%.
- Value tracking – Don't let your agency mark their own work and do it for you because they will always declare that their commitments have been met. And it's not always the case, they can play with so many different factors, and therefore manipulate the results.
- Contract compliance – You need to be aware of the contractual terms or conditions, otherwise it's very difficult to know if your agency is not delivering as per the contract. It’s important to check every single clause.
- Internal media auditing – What we tend to see is advertisers sometimes are not happy with the agencies and think that changing agencies will change the results. But if you don't have the right skills internally in order to manage and incentivise a media agency, the results will not change.
4. Run a media agency pitch
If this audit identifies below par performance, running a media agency pitch (with expert support) is the fastest and most effective way to improve media performance dramatically – delivering great results, saving time and money.
5. Manage the Performance Related Fee (PRF)
Once the pitch is complete, make sure the PRF is managed effectively and agency commitments are delivered to get maximum media performance and ROI. From our research, we found that two-thirds of media agency contracts do have a PRF included in the remuneration model. But only a third of these PRF schemes were suited for purpose as they aren’t always developed with the client’s best interest in mind.
6. Monitor results
By dedicating time to reviewing campaign performance, after each campaign, you can ensure you’re on track with your KPI’s or make course corrections along the way. Over time, building up a bank of historic data will result in more accurate insight you can draw upon allowing you to spot trends, peaks, and toughs in which campaigns succeed or fail. However, in many cases, we often find post-campaign reports aren’t done, sometimes as low as 30% of post-campaign reports exist.
Whether you rely solely on internal audits, supplement your internal team with specialised external media performance expertise, or completely outsource your internal audit function, here are three essentials to a more holistic and impactful approach to internal audits:
Think holistically - By taking a more holistic approach to internal audits, covering everything from being skilled to write best practice contracts through to monitoring the campaign results, you can create a culture of transparency, efficiency, and effectiveness. Your in-house skills and management processes are crucial to creating a balanced, effective relationship with media agencies which is how you can achieve the best results.
Provide practical solutions – One of the most common criticisms of media auditors is that they only provide general recommendations, limiting themselves to identifying the need to develop missing policies, update outdated procedures, simplify processes, or increase effectiveness. But media auditors are uniquely positioned to deliver solutions, because they can evaluate situations independently and objectively.
The best media auditors will share best practices from other advertisers – helping to guide you through the process of implementing robust policies and procedures, streamlined processes, and enhanced performance through strong communication, collaboration, coordination, reporting, and decision making.
Work collaboratively – Without collaboration, an advertiser’s ability to achieve improvements is inherently limited. Through collaboration, media auditors can gain the insights from your internal teams, verify facts, and test the practicality of recommendations. You should be made to feel comfortable leveraging the best practices from your media auditors and tapping their expertise for practical advice.
Gain ROI and compete with the rise in advertising demand
To compete with the likely rise in demand, whilst delivering ROAS, advertisers need to be equipped with best practice knowledge to manage media performance. This helps to create quality media agency contracts, run successful media agency pitches, review key elements like Performance Related Fees (PRF) to correctly incentivise agencies and to monitor results.
The crucial steps for any advertiser this year is to run media value tracking and media benchmarking. This provides you with the transparency you need to assess media performance and highlight areas to improve.