Compared with the year before, global marketers entered 2023 with a sense of uncertainty that made it difficult to plan for the year ahead. With just under 70% of the marketers surveyed for Nielsen’s 2023 Annual Market Report citing the economy as a roadblock to formalizing their 2023 media strategies, many developed contingency plans in case they need to pivot.
Somewhat surprisingly, fewer marketers said they would make the knee-jerk reaction of reducing ad spending than leaning into other strategies. Globally, marketers would rather shift spending to digital channels and prioritize performance-based marketing.
For marketers, the uncertain economic outlook adds to the complexity that they’re already facing as they weigh new marketing channels while still lacking confidence in measuring the ROI of their total spending. Specifically, only 53% of global marketers, on average, express being either extremely or very confident in their ability to measure the ROI of their total spending.
In aggregate, marketers’ lackluster confidence in ROI measurement poses two challenges. First, a shift in marketing strategy that prioritizes performance marketing could impede marketers’ ability to deliver on their top objective for the year ahead: new customer acquisition. And on the flipside, lackluster confidence in full-funnel measurement could hamper marketers’ ability to gauge the holistic impact of their marketing if they stay the course and leverage all channels as planned.
The economy might be less of a challenge in actuality, as global marketers do expect their advertising budgets to increase this year, albeit less so than a year ago: 64%, on average, expect their ad budgets to grow this year, with 13% expecting increases of 50% or more. And as has been the case in recent years, marketers plan to continue favoring digital channels, with social media, online video, online display and search ranking highest for planned spending increases. And given the rising popularity of streaming among TV audiences, 84% of marketers globally say they now include streaming in their marketing mix, which adds further complexity to measurement.
That complexity is reflected in the perceived ROI of streaming among marketers, as only 49%, on average, believe streaming is either extremely or very effective as a marketing channel. The skepticism isn’t surprising, given the relative newness of streaming en masse and the unique requirements associated with measuring it. But it’s not the only channel marketers struggle to validate—it’s just the newest. In fact, perceived effectiveness is relatively low across nine different digital channels.
There are many possible reasons for the muted level of ROI measurement confidence, such as declining use of marketing technology (martech), incomplete audience data, reduced investment in martech and lackluster campaign effectiveness data. Regardless of the reason, however, the survey results highlight a significant accountability gap—one that’s rooted in the complexity associated with cross-media measurement. And the complexity intensifies with every new channel that audiences engage with.
The historically different methodologies for linear and digital measurement underscore the difficulty in comprehensive cross-media measurement. And arriving at comparable metrics across a range of channels becomes increasingly arduous when measurement is channel specific. For example, 62% of marketers report using multiple tools for their cross-media measurement needs, with 14% using for or five. That will make arriving at comparable, cross-media measurement—something that 71% of marketers say is extremely or very important—very difficult, especially as new channels emerge.
Strategically, marketers have one North Star: the audience. Through that single lens, marketers have all the guidance they need to develop effective media strategies. In an increasingly fragmented digital landscape, quality audience data is at a premium—it’s also something that only 23% of marketers say they have access to. Yet without the right audience data, or the technology necessary to measure the effectiveness or impact of their spending, many marketers will remain ill-equipped to navigate where to allocate their spending and measure the outcomes that follow.
For additional insight, download the 2023 Nielsen Annual Marketing Report.