Taking a trip down memory lane recently, I read with interest (and a bit of nostalgia) that in 2004, $60 billion of the $154 billion advertising spend in the USA, went to TV, dwarfing the $10 billion spent on the still-nascent internet.

As for why I chose to do look back on what was happening for TV revenues in 2004, it’s not simply that 20 years is a neat, round figure. It’s also because in February 2004, Mark Zuckerberg and a few friends at Harvard launched ‘TheFacebook’, which went on to become just ‘Facebook’ in 2005, before the company graduated to the monicker ‘Meta’ in 2021.

Now, according to WARC Media forecasts from early May, “Next year is likely to prove a watershed year for the advertising industry, with Meta on track to earn more from advertising than the entire linear TV industry [globally].”

In the space of just over 20 years, this company will go from being a college start-up to conquering what has arguably been the dominant advertising medium of the last century.

Why has industry spend skewed so far into digital channels?

In their Q2 2024 MROI report, Mutinex reported that at the “beginning of 2023, [marketing] investment levels were sitting at roughly baseline levels from 2021.”

While there were natural peaks and troughs across those two years, the baseline amount of money being spent was more or less the same, despite the rising costs that come hand-in-hand with the well-documented surge in inflation during that same period.

Naturally, as marketers are consistently challenged to do more for less and forced to defend their marketing budgets, they turn to the metrics that are readily available and broadly accepted.

And when it comes to our industry, perhaps the easiest investments to defend are digital channels. However, while the industry has largely accepted digital attribution metrics as a reflection of media and marketing performance, they simply do not capture the full picture.

Long before we had access to digital measurement, media mix modeling (MMM) was an accepted measure of impact across all channels, but legacy models were arduous, high-cost and slow turn-around. This meant few marketing teams have relied on them consistently as a source of truth – particularly in the face of the temptation of the easy-to-access digital attribution.

But don’t be fooled into equating what’s easy to attribute with what actually still works.

Distribution of spend by channel doesn’t reflect the return on investment

That same Mutinex report provides a great insight into the average return on investment of channels, broken down into: affiliate, display, ooh, social media, print, radio, search, TV, video and ‘other’.

The data provides an objective view that should challenge how investment is being allocated, with one of the main takeaways being that TV is certainly not dead.

While there is endless debate about linear TV viewership, the data shows the impact that this channel continues to have on the number that really matters: revenue.

Specifically, the report finds “there’s been little change in revenue share driven by competing screen types in the last several years despite investment patterns showing a clear trend away from linear TV”.

In fact, the data shows that the ongoing skew of investment in social is not reflective of the ROI that tried and tested channels deliver.

Audiences are becoming increasingly fragmented – you need only look back to 2004, when “internet” was considered an entire medium, compared to all the ways we slice and dice online audiences nowadays – but that’s all the more reason to balance investment across channels. Audiences will continue to seek out quality, long-form content for entertainment, across various content platforms, including TV.

I’m certainly not saying that marketers should re-allocate the entire budget to TV, because digital channels – of course – play a significant role in driving revenue returns.

But it’s critical to maintain an objective view on media returns, with more representative analysis used to guide a balanced channel mix.

Mutinex APAC CEO, Mat Baxter says, “Some of the industry’s legacy attribution methods have quite frankly favoured digital channels. What’s clearly apparent is that when you draw a more direct line from a particular channel to actual commercial outcomes the picture looks a little different.”

The risks for marketers of ignoring MMM analysis

Every marketer should undertake MMM analysis to better understand the drivers of revenue growth, as every category and business will have a slightly different mix.

Continuing to over-emphasise the role of channels primarily because their attribution method is simple is leaving incremental growth on the table. How can you know the difference you can make to ROI if you don’t know how to truly measure channels that operate higher up the funnel – and thus reach a broader audience?

How meaningful a conversation can you have about the full impact of marketing if the only ‘informed’ data you’re bringing to the table is for the channels that are easy to report but often obscure the effectiveness of other methods of bringing your message to the masses?

Neither of these reasons got you over the line to pursue MMM? How about the simple fact that third-party cookies are on the way out, and as we see them less and less, digital attribution – limited as it has always been – will become more and more flawed.

By leveraging MMM analysis, marketers can have a far more informed understanding of how to create an effective media mix, enabling them to demonstrate the total impact of their investment to the business.