Harnessing Integrated Digital Marketing

Digital technologies have reshaped marketing and increased the quality and quantity of data at our disposal. Now more than ever, companies need skilled professionals who can interpret and respond to changing consumer patterns and are equipped to ensure optimal return on investment (ROI) for marketing spend. Sinan Aral, David Austin Professor of Management at the MIT Sloan School of Management, explains how digital marketing channels can be integrated to provide a holistic consumer experience with higher click-through rates, conversion rates, and ROI.

Transcript

Consumers live, work, and play across multiple channels and across multiple devices. So to communicate with them effectively, marketers must employ all of the different marketing channels in concert to go where the consumers are and to provide a seamless experience that fits into their lives.

Integrated digital marketing is a strategy designed to implement, assess, and optimize marketing efforts across all of the channels in a digital marketing mix. Integrated digital marketing allows you to reach the largest audience possible in the most effective manner possible in a way that optimizes return on investment.

The benefits of integrated digital marketing come from two sources. The first is balancing investments in real time. And the second is harnessing complementarities across channels. 

Balancing allows you to measure the effectiveness of ad dollars spent across all different channels, and to adjust the investments and the real-time spend across those channels based on how they’re performing.

If one channel is underperforming while another is performing better than expected, ad dollars can be reallocated from the underperforming channel to the overperforming channel in order to optimize return on the marketing dollar. This cuts wasteful ad dollars, while putting marketing investments to work on channels and campaigns that have a solid return.

The marketing channels don’t work in isolation, but rather as a unit guiding communication with consumers in a holistic manner with a 360-degree view of their needs, concerns, interests, and affinities. The use of one channel can integrate with and improve the functioning, and thus the returns to, another channel.

Let me give you some examples of this type of integration. Take, for instance, the interaction between display advertising and search advertising. How does display advertising affect the effectiveness of search advertising, and vice versa? Nearly a fifth of all search conversions have seen a digital display ad.

And experiments show that users exposed to a display ad conduct five to 25 percent more campaign-relevant searches. Display ads also increase search conversion and search clicks, which also increase search ad costs. A dollar invested in search and display together returns a dollar 24 for display and a dollar 75 for search.

This has been shown in experiments that have been randomized, so the causal relationships have been shown to be true. In addition to channels, cross media ad exposures can increase clicks and conversions. Take, for instance, online display ads and mobile display ads. Experiments have shown that for web click-through rates, web-only versus web and mobile advertising shows a clear advantage to the integration of web and mobile advertising together, garnering a 34 percent higher click-through rate on web channels. In addition, on mobile channels, the web and mobile advertising combination outperforms the mobile-only combination by 23 percent in experiments on mobile ad channels for the click-through rate. The story for conversions is very similar: web and mobile ads integrated together return a 34 percent higher conversion rate in experiments compared to mobile-only advertising to the same consumer. 

Integrated digital marketing also enables the marketer to avoid substitution. For instance, experiments have shown that web and mobile ads together reduce the conversion rate on the mobile device by 16 percent, compared to mobile-only ads. Which indicates that web ads could distract from consumers trying to purchase on the mobile phone. Understanding these complex complementarities and substitution effects is an important part of integrated digital marketing, and the benefits to an integrated digital channel mix.