It may seem obvious that business owners, CMO’s and marketing VP’s want their digital marketing to produce results, but as a growing trend, this is becoming a requirement and not a want. Results need to be easily measurable so businesses have proof that their investment in digital marketing truly works. For proof of this trend, take a look at Gabe Leydon, CEO of Machine Zone, one of the biggest gaming companies in the world. This interview below should scare a lot of brand agencies and media buyers. Not because it’s shocking, but because it’s true. Watch the video here:
Advertising Remains Necessary – But Working is Necessary too.
No matter what product you sell, digital advertising remains necessary to generate ROI. In the case of Machine Zone, its goal is to create an international game that can be played anywhere and involves frequent interaction, as well as frequent buy-ups or buy-ins…but they have to get the word out to their target market to get digital marketing results.
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Leydon suggests that CMO’s stay away from television and radio ads, even for “awareness”, unless they have a clear idea of their current results form them – which is unlikely. According to Leydon, TV ads simply aren’t as effective as other forms and cost more, but business owners don’t realize this because they aren’t taking the time to track it. Same for radio. Same for print. Digital marketing still has the most easily trackable metrics. That includes every step of the process, from first click to last click and everywhere in between. Traditional media may be used to supplant digital, but even then it would be used at a fraction of normal usage.
Try to Avoid Traditional Agencies
The problem with the traditional method of sticking to ad agencies for your needs is that they won’t create a multiple in sales, according to Leydon. This means that they will typically do whatever they can to get you to spend more, whether they get results or not. It’s about buying time and creative and “concepts”. Instead, Leydon suggests working directly with the smaller companies producing your content to market it specifically online and track every penny back to performance. That’s more easily accomplished with custom shops and outsourced digital marketing firms that drill down to ROI on every engagement and focus solely on digital marketing results.
Many traditional agencies have an outdated and flawed model, driven by “account service”. Group supervisors oversee several directors, who each oversee a team of account managers. Every account manager may have a coordinator or two at their disposal. Not to mention senior and junior creative staff, developers, receptionists, billing specialists, etc. Plus multiple physical buildings to maintain. The end user pays for all of that PLUS a markup on spend in many instances. It’s hard to get ROI with so much overhead when you think about it in those terms.
Becoming a Sophisticated Buyer
Leydon and his company are pushing for more C level executives to become sophisticated buyers, whereas many today accept tactics regardless of their ROI. This new, more informed buyer will realize that they are the ones funding the large media agencies and want to know what their money goes for. As they ask for more transparency, they’ll stop paying for expensive admins, account staff that does little but take notes and administer meetings, and large group concept meetings. Performance-based marketing that is trackable is the way of the future and will appeal to these sophisticated buyers.
So, are you in the process of becoming a sophisticated buyer? Would you like to get on that path to generating digital marketing results? If so, we can help! Drop us a line and let’s start a conversation today…