Sunday, August 31, 2014

How Media Consumption Statistics Can Mislead Marketers

Earlier this year, eMarketer published a new estimate of the amount of time US adults (ages 18+) spend with various types of media. Like many media analysts, eMarketer estimates that the amount of time spent with mobile media is growing more rapidly than all other forms of media consumption, while the consumption of print media continues to decline precipitously.

eMarketer also estimated the amount of advertising spending per hour of time spent with each type of media, and the table below contains some of the eMarketer estimates. As the table shows, eMarketer is projecting that this year, advertisers will spend 7 cents for every hour a US adult spends consuming mobile media, but more than 10 times that amount (83 cents) for every hour spent consuming print media (magazines and newspapers).

eMarketer isn't the only analyst to make this kind of consumption vs. spending comparison. In the 2013 edition of her widely-acclaimed annual presentation on Internet trends, Mary Meeker also compared the time spent consuming various types of media with advertising spending. The table below shows the data she presented, and her statistics also reveal significant disconnects between the time spent with print and mobile, and the amount of advertising spending devoted to those channels.

So, what's the point of these comparisons? The argument made by some is that advertising and marketing spending should reflect media consumption patterns. If you buy into this argument, then the above data would indicate that companies are over-investing in print advertising and under-investing in mobile advertising.

Understanding media consumption patterns is obviously important for effective marketing, but marketers shouldn't rely too much on high-level media consumption data for three reasons.

First, broad consumption patterns usually aren't specific enough to provide effective guidance for an individual company. As an enterprise marketer, what you really need to know is how the prospective buyers in your target market consume media. For example, Mary Meeker's data says that US adults spend only 6% of their total media consumption time on print media, but prospective buyers in your target market may spend considerably more of their time with print.

Second, the consumption data discussed above is restrictive. It only compares advertising spending to media consumption time. Numerous research studies have shown that spending on digital marketing has grown explosively over the past several years. Therefore, if the above data included all marketing spending, the comparisons would look substantially different.

Finally, the time people spend with a particular type of media isn't necessarily indicative of how effective that channel will be as a marketing tool. For example, many younger B2B buyers may spend a considerable amount of time using mobile devices for a variety of reasons, but that may not be the primary way they access business-related information. The fallacy is to assume that personal communications preferences and marketing communications preferences are identical.

The 2012 Channel Preferences Survey by ExactTarget found that personal communications habits are not a good indicator for marketers who are looking for the best way to communicate with potential buyers. As the authors of the survey report wrote, "The lesson here for marketers is that just because consumers embrace a channel for personal communications doesn't mean that they want to receive direct marketing messages from your brand via that channel." To improve the effectiveness of your marketing, you need to understand how your prospective buyers prefer to receive marketing messages.

The bottom line? Media consumption patterns are interesting, and they can be somewhat useful. But you need to know more to make sound marketing decisions.

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