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Here’s a pop quiz to test your digital marketing savvy: What’s the most effective way to spend $1 million in advertising that goes beyond brand exposure to yield click-throughs and sales? Answering that question, according to Professor Glen Urban, Chairman, MIT Center for Digital Business, is the Holy Grail for marketing today. But the solution is not as straightforward as you may think.urban.jpg


CDB’s Digital Marketing Group has examined the impact of allocating funds among multi-channel, old- and new-media platforms. The research also aims to determine how this spending maps to sales. Discussing the results of the three-year study conducted jointly with General Motors and INSEAD, Urban described five options that U.S. Chief Marketing Officers face daily about which media, or mix of media, will garner the most bang for their (million) bucks. For instance, they could buy 125 million views on Facebook; two 30-second ads on American Idol; two days on Yahoo’s featured home page; 6.5 pages of color ads in People magazine, or 10 full-page, color ads in the New York Times, as illustrated below.




Naturally, the type of product and the demographics of the target audience would be key considerations, as well as the business’s budget and strategy for how much to spend on new versus traditional media. Also to consider: Which traditional media, if any, should be dropped in favor of new approaches, and whether to keep or change total spending.


While CMOs currently invest about 25% of their budgets in new media--and the amount is growing--the CDB Digital Marketing study, Measuring the Effectiveness of New Media vs. TV, also examined whether that investment links directly to increased sales, and which specific new media works best.


TV Strong, but Softening

The data show that TV is still important in purchase decision-making over banner ads, though its impact is declining a bit worldwide. Facebook is significant among social media platforms, but it is more influential in the U.S. and among those who are close to making their purchase choice. In China, social media has greater influence than in the U.S., and there is also more synergy between new media and TV. In summary, the research shows that:


  • TV response remains strong, but audience is declining in the developed world.
  • Social media is effective.
  • Building synergy across TV and new media – e.g. coordinated campaigns –is advised.
  • Global segmentation by culture (and not country) is an opportunity.


Nevertheless, “All the rules are changing in marketing,” Urban said, and continued study is needed to find ways to make digital ads even more valuable. Clearly, the challenge is to accelerate cross-country/cultural learning in a rapidly changing digital media landscape, and to implement tactics that best support business growth.



For more on social media and digital marketing, read this related blog.


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