Improving CX vital to closing advertising expectations gap

Arvind Hickman
By Arvind Hickman | 15 February 2016

There is a huge discrepancy between the advertising revenue expectations of media owners and advertisers, and better collaboration between all partners on customer experience (CX) will be vital to avoid disappointment.

Media owners are far more bullish than advertisers in nearly all media, according to the SMG Media Futures 2016 survey, which polled media owners and 135 of the top 500 companies in Australia.

Outdoor media owners expect advertising growth to be 6.6 percentage points higher than advertisers' expectations. In radio, owners are 4 percentage points more bullish, in TV and magazines the different is 3.1 percentage points, while for online advertising the difference is 1.8 percentage points.

Bucking the trend is newspapers, where owenrs predict advertising revenue will decline by 10%, a far more glum outlook than advertiser projections of 4.4%.

“We've seen this trend [of owner and advertiser discrepancy] from the past few reports where media owners have a more optimistic view on the market. It stands up to their investment as well," explains Starcom's national strategy director Chris Vance.

"What we're starting to see as they're starting to invest and diversify into other areas, they're seeing more opportunities for their channels to kind of grow in ways that advertisers aren't currently thinking of... the media has a clear picture on where they are going but maybe not necessarily on where the customer experience is going."

Vance says the disconnect is down to owners not educating advertisers on what they can offer, particularly around customer

“They've probably got offerings that can help, such as the mass broadcasters moving more and more into programmatic and anywhere on tech, but it's not translating into the conversations they're having with marketing partners. As our media owners continue to diversify and increase their tech offering that could cause advertisers to be a bit more risk averse," Vance adds.

For advertisers, the biggest growth areas in advertising will be in social media (11.6%), online video (11.6), mobile (8%) and online affiliates (7.9%).

It is going to be a tough year for magazines (-7.1% advertising spend), newspapers (-4.4%), cinema (-2.7%) and free-to-air TV (-2.6%).

Radio (0.2%) and outdoor (1%) will have marginal growth despite the predictions of media owners.

To drive advertising growth, 51% of Australian businesses believe marketers will need to improve customer experience but only a handful (6%) are currently implementing CX well.

The study says defining customer experience and how this varies between function vs philosophy will be important to getting it right. Vance cites Dominos as an example of a brands doing customer experience well, using innovations such as ordering pizzas via Twitter to connect with customers.

Marketers and media owners view 2016 and 2017 as years to invest in infrastructure. For marketers, investments will occur in owned assets such as websites and and data platforms.

Budget pressures are a barrier for 35% of businesses and 78% Advertisers see people and skills as the most important building block to invest in while 50% see technology and data solutions as the most critical building block.

Media owners will invest in personalisation, mobile and data to improve CX, with outdoor investing $45million in digital infrastructure properties.

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