The Complexity of Digital Channels' Effectiveness

The following have widely been identified as main digital channels brands can use to develop relationships with consumers:

• Search
• Display
• Video
• Social

Yet, which is most effective?

Effectiveness can be seen in different ways; there may not be effective channel in all situations or for all products/services or any brand. In fact, the effectiveness of the digital channel will depend on the brand’s target audience, the image it want to develop, what platform it uses within those channels, how it uses the tool and stages it uses the tool. For instance, Instagram may be more effective for brands focusing on a younger audience who look for stylish products with cool campaign imagery while Facebook may work better for a broader age range of audience enjoying more informative content; and display ads on international magazines’ website may work better for business professionals while video reviews on new digital devices work better for electronic enthusiasts.

Along every stage in the consumer decision journey (CDJ) developed by McKinsey & Company, there are multiple channels brands can use to effectively communicate with consumers; we may tell which is the most effective during each specific stage.

During the Trigger stage; Display Ads combined with Social can be the most effective and be used as stimulus. According to the latest State of Advertising report by Adobe Digital Insights, interactive display can raise consumer's purchase intent; while study on social media (e.g. Liwei Chen’s “The influence of social media on consumer behavior”) shows audience’s openness to and dependency on social media has a significant positive influence on purchase intention, i.e. clients who has high openness to/dependency on social media will have high purchase intention through social media. For instance, to entice sales, the brand Shutterfly came up with a promotion to offer a free personalized ceramic mugs. And the audience they chose to target were mothers with kids at home. While, that is a rather specific niche, using Facebook’s Offer Claims feature, Shutterfly was able to reach out to their target audience and circulate a unique, single-use offer code to each individual who clicked its ad. The campaign resulted in 15,000+ offers reclaimed. Importantly, there were 8,000 further purchases generated, turning into in an 11-fold return on ad spend.

During the Initial Consideration and Active Evaluation stage; Search and Display can be the most effective. According to ZMOT macro study by Google, since 88% of US consumers research products and services before making a purchase. A recent study conducted by GE Capital Retail Bank has found that 81% of Canadian people look at products online before making a purchase in store. The number of people who conduct research online before making a purchase decision has increased by 20% in the last year. However, consider that clients can end up watching Videos or browsing Social channels after an active search on a brand during evaluation. For instance, videos comparing electronic devices have shown high conversion rate and social platforms are frequently used for clients to get an initial understanding of the brands. Wyzowl’s 2017 State of Video Marketing survey shows that: 83% of those using video think it gives them a good ROI; Of those that aren’t using video, 73% have bought a product after watching a video. 97% of businesses using explainer videos say it helps users understand their business better.

Among those surveyed, 81% saw an increase in sales and 53% said support calls were reduced. According to “Do Display Ads Influence Search? Attribution and Dynamics in Online Advertising” the HBS doctoral student Pavel Kireyev and Ozyegin University professor Koen Pauwels, found that in the long run the cost for each bank account application for search ads was almost half of the cost per application for display ads to generate purchase. Yet, these findings are specific to the particular case: consumers opening accounts within the banking industry. Different industries may see greatly different results based on the particular nature of how people look for products and services online. But in the end, the findings demonstrate that the decisions about where to place advertising budget are anything but simple.

A problem with display is that display creative is frequently too general to attract people who are prepared to buy, so they are only utilized by brands for generating awareness. However, when Display ads are utilized creatively, they can be very effective at targeting audience. For instance, ZUJI wanted to challenge the way Displays were used. In order to get better outcomes from display, ZUJI used Dynamic Content Optimization (DCO) for its ads and smart remarketing to get searchers back to the brand’s site to purchase. Precisely, ZUJI looked at clients who had been to the site, assessed their behavior, and then bid higher to display ads to someone who was likely to be a client.

ZUJI segmented its target audience by behavior, not just by demographics. Then, ZUJI utilised dynamic creative which demonstrated personalized flight recommendations according to what the user had searched on. For example, a person came to the site and looked for flight from Hong Kong to America and searched for certain dates in April. ZUJI would then utilise both the destination data and the fact that the individual wanted to travel in April to personalize an ad which gave prices for that flight in April. As a result result, ZUJI enjoyed a 14% increase in digital bookings and gained a 100 times return on ad spend.

In Post-purchase Experience stage, Social can be the most effective because people tend to share their experience if the experience is good and interact with brands on their social media. Yet, once again, this may be applicable to the audience who uses social media more frequently.

And whether it’s the humble “buy” button, a retargeted ad to notice audience about interesting campaigns, or chatbots that bring artificial intelligence and a conversational UI to the social media experience, it takes many different forms. Social media is not just limited to introducing your product, it is also a leading platform for promotional campaigns. A client sees these platforms as service channels where they can directly interact with the business. With the help of these social platforms, developing a voice for your label is important in improving the general brand image. Clients appreciate the fact that when they post comments on your platform, they receive a personal reply. A brand that values its customers, takes the time to answer a message, which is perceived in a positive light.

Rethinking the classification on digital channels: However, do consider the impact of cultural difference in consumer behabior. For example, notice that Chinese consumers can go through the entire CDJ within one playform, i.e. be triggered to buy from reading wechat feed, search products directly in wechat, watch display ads videos within wechat and buy products within wechat shop. In that case, one can argue that social can be the most effective channel in certain places like China.

By going through the CDJ, we found that we may have a closer measure of effectiveness for the digital channels but the effectiveness of each channel may vary based on the way it is used and which audience it is applied to. In this age of crowded advertising messages we face every day; brands must act intelligently and creatively to utilize each channel to aid and smoothen consumer decision making, and gain not only the buy but also build a long-lasting conversation and brand imagination.