Editor’s note: A version of this article previously appeared on Think with Google Canada.
As the Chief Search Evangelist for Google, I’m in the business of making bold predictions.
We know that the advertising landscape is shifting, and fast, but we can’t always see where it’s going. Based on my research and the work I’m doing with some of the top CMOs in the world, here are my bold predictions for what advertising will look like by 2025:
- No. 1: Because of the continuing shift to online advertising, rapid improvements in machine learning, and the rise of programmatic, almost all media buying will be digitized and fully automated.
- No. 2: Driven by this digitization, most paid ads — across most channels — will be measurable and optimizable in real time.
- No. 3: This will transform brand marketing, which will start to look a lot more like performance marketing.
It’s the third prediction that I want brand marketers to pay particular attention to. In this modern marketing era, they will need to shift their thinking on what they’re measuring, how they’re measuring, and how they’re budgeting.
Here are three things brand marketers should consider doing:
Focus on the right KPIs
Machine learning algorithms rely on humans to tell them what to do. One of the most important decisions you can make as a brand marketer is which KPIs you select to optimize.
In the short term, brands can get significant benefits by optimizing total reach by adjusting their mix of TV and digital video. But today’s top performing brands now go well beyond reach, in favor of optimizing more important business and brand metrics.
Brainstorm with your marketing and agency partners to create the dream list of KPIs you’d like to drive that aren’t reach. (And ask for a plan to make it happen.)
In the past, brand marketers had to rely on media metrics that were built for television, such as the aforementioned reach, frequency, and marketing mix modeling (MMM).
In the short term, brands will still rely on MMMs to measure the efficacy of their advertising. But top brands are already making significant improvements to their approach by bringing their MMM into the digital age. And they’re experimenting with digital-first campaigns to better understand the impact. For example, the U.S. Navy went from 70% TV to a 70% digital media mix by launching its first made-for-digital recruitment campaign.
Go always on
More than 80% of the performance advertisers we work with don’t have a marketing budget. Why? Because they can measure the profitability of their investment relatively accurately, enabling them to free up more money as long as the investment is profitable.
In the era of machine learning, we believe we can accomplish the same thing for brand advertisers.
For example, YouTube’s Maximize Lift is a tool that uses machine learning to automatically drive the maximum lift in brand consideration at the lowest possible price. Since it measures results using A/B testing, these results are very accurate and independent of the rest of a brand’s media mix.
If a brand can approximate the impact on medium-term revenue that this consideration lift will create, it can justify the investment and optimize it in real time.
For example, if a 10% lift in consideration drives a $10 million boost in revenue over a year, it’s clearly profitable to invest $250,000 to drive that 10% lift. This is something a machine learning tool can do automatically.
As the brand proves over and over again that it can forecast revenue lift accurately and that its brand advertising is profitable, it will start moving to an always-on brand marketing budget.
The future of brand marketing is digital, and it’s automated. As a brand marketer, if you can start thinking like performance marketers when it comes to KPIs, measurement, and budgets, you’ll be poised to win.