Executive Summary
Depending on the marketing needs and goals of a business, the combination of traditional and digital media will prove beneficial. With the brand of the company in mind, it is determined by the marketing team what medium and method is best for maximum ROI. The cost of running television ads remains the same as viewership continues to decline. Customers are utilizing digital platforms such as social media, websites, and voice searches to collect, store and influence buying decisions. The rate at which digital media is rising is significant as traditional marketing continues to decline. Newspapers, radio, commercials, print, signs, billboards, postcards, and other dated marketing tactics are quickly being replaced by social media ads, google search results, podcasts, and YouTube videos.
Introduction
Digital marketing is a highly effective strategy in 2020. When measuring the ROI of traditional marketing versus digital marketing, we can measure and analyze the major differences that exist between the two. When deciding which has the greatest ROI, many factors will be considered.
Previous Approaches
Traditional marketing, such as magazine and newspaper ads, signs, billboards, television, and radio carry a high price tag as the viewer’s attention continues to decline and shift towards the digital landscape. It is difficult to gauge the amount of attention that is being generated in traditional marketing practices. When marketing a business to consumers, their eyes have been increasingly gravitating toward social media sites such as Facebook, Instagram, Pinterest, and Twitter. The cost of Facebook ads, Google Guaranteed, Google AdWords, YouTube, and many other social landscapes are minimal with the opportunity for maximum ROI. The cost of digital marketing is lower but will not continue to remain affordable for long.
Traditional marketing approaches include billboards, television ads, radio ads, and newspapers. Although these approaches continue to be somewhat effective, the ROI and conversion rates are far less than digital marketing. The reach that traditional marketing produces simply isn’t worth the cost of running ads through digital outlets. Measuring the ROI of traditional marketing is difficult when compared to digital marketing. The cost of running ads on traditional platforms is significantly higher than running ads on digital platforms.
Newspapers
The minimum cost to run an ad through national newspapers is $100,000 per ad (webfx, 2020). This high cost is due to the amount of overhead that is associated with newspaper outlets. Since the ad is being displayed on a physical medium, there are overhead costs associated with worker salaries, delivery, vehicles, paper, and printer maintenance.
Billboards & Signs
When you are on the highway or even local roads, you will see a large number of billboards. The more impressions, the higher the cost. In rural areas, a billboard can cost around $250 per month and up to $4,000 per month in cities (Treece, 2019). Billboards and other sign marketing strategies offer no means to measure their impact.
Types of Sign Advertising
The cost to run an advertisement on a billboard or sign media fluctuates. It depends on many factors such as location, population, and median income. Figure 3 shows the cost per month in Washington, DC. This is based off of the population of DC residents that potentially come into contact with sign advertising.
Television
The power of a good TV commercial is undeniable. Around 14 years ago, running a TV ad during peak times during popular shows on well-known networks will run about a maximum of $1,500 for 30 seconds (Kobliski, 2006). The marketing complication with commercials is not as many Americans are watching them. With technologies such as digital video recorders (DVRs) and streaming services like Netflix, the viewership of TV commercials is on a downward spiral. 16 years later, the cost to run a TV commercial is around the same price. Although viewer numbers for TV commercials are down, the cost remains steady. Running a commercial in the early evening will cost a maximum of $2,000 (LaMarco, 2019), yet will not provide a favorable ROI for the number of impressions generated.
New Findings
When analyzing the reason why traditional marketing declines in impressions and potential customer reach, while remaining expensive it becomes clear what the best option is. The misconception of just “being” online and having a basic presence will prove unsuccessful. Creating a social media account for a business and posting inconsistent, low-quality content relating to a business and how they separate their brand from the competition is ineffective. The goal in digital marketing is converting leads and the main objective is to promote brand awareness. The survival of a brand depends on the ability to adapt to these changes.
What value does a business have to offer and how are they communicating that with the world? Is it achieved through traditional marketing or effective digital marketing efforts? With the rapid integration of digital solutions across industries, placing a focus on an effective digital marketing strategy will dramatically increase a small business or organization’s marketing ROI.
Digital marketing practices such as social media marketing, search engine optimization, content marketing, website design, and voice search (Google) are showing much higher conversion rates than traditional marketing. Some businesses are not constricted to a local-only sales approach. There are limits to traditional marketing practices and digital marketing can communicate a message to anywhere in the world.
Website Design
The decision to build a website for a business is not dependent on how many customers will be converted. The main area of focus is the ability to exhibit a professional and concise digital representation of a business. Social media outlets offer businesses an area to advertise and interact with customers on their terms. Optimizing a website and having complete control and ownership over the creative nature and content is what makes a website worthwhile. It communicates products and services, but the real conversion takes place by getting a customer to go from a lead to a conversion.
Social Media
Facebook and Instagram provide unique ways to interact and communicate with customers. Running ads offer targeted demographic campaigns that narrow down an ideal prospect and provides deep insights into the performance. Social media offers an array of tools that a marketing department can use, including social listening and monitoring the market.
Content
Content is the core of providing value. It shows search engines like Google that a business can be the authority in a market and should be at the top of search results. Identifying issues that potential customers have and what they search for is the core of any content marketing strategy. Google continues to make algorithm changes to provide the most value to its searchers. Providing keyword-rich content on the following digital mediums (figure 7) will help a website climb in local search rankings.
There are many factors that dictate the number of impressions that follow traditional billboard advertising. Facebook advertising is very flexible when creating and spending ad budgets, allowing instant revisions and to every campaign. When reaching an audience of $1 million, Facebook advertising offers a dramatically lower cost ($1,000 a month vs. $15,000 a month for peak billboard costs) when compared to traditional sign advertising (figure 8). The number of viewers and impressions are the same, assuming everyone who walks past a billboard looks at it. The real difference is the ability to run targeted campaigns, giving the ad management team the power to choose its demographic.
Measuring Campaign Results
Traditional marketing does not allow for easy traceability. There is no way to truly know if you are headed in the right direction or not (Sherman, 2019). With digital marketing where data is live and updated frequently, any ad ran on social media, Google or another digital platform can be revised and the campaign pivoted for maximum exposure. A social media Facebook ad can be revised at any time to properly address any change in the ad that affects demographics such as target age range or location.
Conclusion
With the high cost of traditional marketing, the ROI does not add up to the potential of digital marketing. Although traditional means such as television ads and billboards provide some value and return on investment, the numbers continue to decline. Marketing is based on measuring what trends are current and emerging and being able to utilize them to communicate a brand’s message. Communication is the key to bridging the gap from a prospect to a loyal customer. Traditional advertising offers a less-personable method of marketing a business. The ability to engage with customers simultaneously with the ad makes all the difference in converting leads.
References
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Digital Marketing vs Traditional Marketing: Which Produces Greater ROI? (2019, October 6). Retrieved from https://www.lyfemarketing.com/blog/digital-marketing-vs-traditional-marketing/
Kobliski, K. J. (2006, January 17). TV Ads. Retrieved from https://www.entrepreneur.com/article/83108
LaMarco, N. (2019, January 25). How Much Does Television Advertising Really Cost? Retrieved from https://smallbusiness.chron.com/much-television-advertising-really-cost-58718.html
TODOR, R. D. (2016). Blending traditional and digital marketing. Bulletin of the Transilvania University of Brasov. Series V: Economic Sciences, 9(1), pg. 52.
Wikipedia. The Washington Post. (2020, April 18). Retrieved from https://en.wikipedia.org/wiki/The_Washington_Post
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