Google: ‘All ad spend could be digital or digital enabled in the near future’

‘In five years it might be case that all advertising is either digital or digital enabled’ sounds as much like wishful thinking as it does a prediction when you consider it comes from one of Google’s top executives, vice president for product management Jerry Dischler.

Google

The media giant is certainly busy trying to make sure this is the case. It is making land grabs from traditional media, signing deals with multinationals including Mondelez that will see a larger chunk of the food company’s media budget invested in online video and has been busy making the case for online as brand builder at every opportunity this year.

It is in mobile where Google’s biggest opportunity and challenge lays. Its efforts here have not been an unqualified success – analysts see rival Facebook as stealing a march in the area while it has not yet fully succeeded in fully exploiting its dominance of the mobile market with cost per click advertising rates dropping 2% in its latest quarter.

Marketing Week caught up with Dischler to discuss the importance of cross device tracking, the reluctance of some marketers to fully commit to mobile and why despite the dizzying growth in online advertising spend he believes marketers are still underestimating its potential.

Marketing Week: One of the biggest problems marketers face is tracking the effectiveness of advertising across devices, particularly when mobile is involved. What is Google doing to try and offer a solution?

Jerry Dischler: I think that the typical advertiser is dramatically undervaluing the impact of online advertising. It’s our responsibility to provide great measurement solutions for advertising. At a recent conference we hosted in Dublin we found that advertisers and agencies are struggling to measure impact.

It’s not just cross device, transactions on one device that end on another but also off line conversions. European data for the travel industry, for example show advertisers are undercounting conversions on average by 6%. Conversations that start on mobile but end on another device by 14%. In retail by 10 and 15 respectively.

In the US we are working on offline conversations, which we will expand globally in 2015. In the US, one retailer saw a 100 per cent increase on return on advertising spend by measuring their online sales in addition to their offline sales so basically their offline impact of their online spend was higher than their online impact and by measuring that it essentially doubled its adROI.

We are on the groundfloor of a new way of measurement that is really going to improve the effectiveness of online advertising

MW: A recent survey of CMO Council members found enthusiasm for mobile marketing slowing. Is it just that there is not enough awareness of online advertising’s effectiveness?

JD: We are just starting to measure this stuff. Last year we introduced cross device tracking. This year Facebook did.  We and advertisers have been trying to approximate the impact of this stuff but being able to do it precisely is new.

MW: It seems strange to think of online advertising as being under estimated, given growth levels.

Don’t talk our word for it. If you talk to CMOs or heads of digital advertising they say how they measure ROI and how they justify spend is almost always in terms of online value but if they are able to measure offline value it allows to have a wider viewpoint

MW: Can online advertising really be used for brand building?

JD: If you look at mobile usage and online video usage relative to mobile spend and online ad spend across all of advertising, we are on the ground floor of something big. Advertisers’ focus and spend goes where the users are and users are going into these channels and this indicates there are untapped opportunities that we should be capitalising on. I am really excited.

MW: Why is online advertising spend lagging consumption?

JD:It is proven in the case of mobile and online that it is lagging usage. However, this is normal. We are just starting through a combination of format targeting and measurement to harness the opportunity. Online advertising is an expensive proposition, having to deal with a mobile app, an ios app, a mobile website and an android app. However, people should be embracing the stuff, it’s the future.

MW: What are the key trends marketers should be looking out for in the short-term?

JD: Firstly, embrace the constantly connected customer. They should be integrating channels to drive message – mobile, desktop, call centres, in store. all that in creating advertising. They should be thinking about all advertising being either digital or digitally enabled over time. In 5 years that might be the case.

They should be thinking holistically about bridging the digital divide
measuring in an holistic way. CMOs should be demanding better measurement  to see what’s most effective. Measuring holistically is going to be increasingly important over time.

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