The potential of marketing investments has never been greater. But brands are failing to leverage their true power by prioritising short term gains.
That was the overriding finding at the launch of the new research from Les Binet and Peter Field, ‘Media in Focus: Marketing Effectiveness in the Digital Age’.
The good news is that digital media is amplifying the effects of all other media. The bad news is that we have all become so obsessed with our real-time dashboards and short-term measures of success, that marketing overall is becoming less effective.
Media in Focus is bang on time to address these issues. An essential read for clients and agencies, it sets out the consequences of todays media and business landscape and provides rich evidence for the ways in which marketing can be improved.
A few highlights:
1. Long-term strategies make the difference
Short-term strategies can seem effective. But when you view them over the long term – they are revealed as highly ineffective.
Although they are twice as likely to generate large short-term sales activation effects, only 3% of short-term campaigns studied generated very large market share growth.
In contrast 38% campaigns of three years plus generated significant growth.
2. Beware ROI
ROI (also referred to as ROMI in the report) is an important metric for some purposes, but should not be focussed on too much. It is an efficiency metric, so it leads marketing to cut advertising budgets and reach only for ‘low-hanging fruit’ in the quest for growth.
Instead, profit growth correlates most closely with broad improvements across the range of long-term business metrics. Sales and market share growth correlate particularly well, as well as brand metrics and penetration.
3. Get the Activation / Brand Building balance right
The optimum balance of brand vs activation expenditure remains at around 60:40. The study found a lot of evidence that deviation either side of this results in a decline in long-term effectiveness.
Peter Field was clear about the direction that brands and agencies must take, “By ignoring the enduring effectiveness truths of the changing media landscape, businesses are undermining the tremendous potential of the new tools at the marketer’s disposal. Marketers should return to a more balanced perspective on long vs short-term objectives. They must recognise that this will pull campaigns in different directions.”
Les and Peter are continuing their research and the next paper in the ‘Marketing Effectiveness in the Digital Era’ series will be presented for feedback at Effectiveness Week 2017.
‘Media in Focus’ updates the media-related findings of our two previous analyses of the IPA Databank: – Marketing in the Era of Accountability (WARC 2007)
– The Long and the Short of It (IPA 2013).
Produced in association with Google and Thinkbox, it is the first part of a new series about Marketing Effectiveness in the Digital Era.
“Just what the industry needs, great collaboration between clients and agencies on the topics that drive business growth.”
Bridget Angear, Joint Chief Strategy Officer at AMV BBDO
“It’s great to see the IPA in the UK bring the whole industry and particularly the trade bodies together to focus on effectiveness. This new Marketing Effectiveness initiative will enable people across the industry to work together to build on best practice.”
David Wheldon, Chief Marketing Officer, RBS
“Effectiveness is a team sport, so it was great to see the industry in the widest sense, come together. In an increasingly diverse and fragmented world, only by using all parts of the brain will we solve effectiveness challenges and design our campaigns to deliver short and long term value. That’s why what happens next is important – if the IPA can help facilitate progress on this with a long-term initiative around Marketing Effectiveness, we’ll definitely crack it.”
Bart Michels, Global CEO Kantar Added Value and Country Leader Kantar UK
“The time spent at #EffWeek was extraordinarily effective. It was great to hear the diverse views from all areas of the industry. All tied together with the common themes of accountability and effectiveness.”
Andrew Canter, Global CEO, BCMA
“It has been a privilege to be part of the inaugural Effectiveness Week. The agenda is one which we at O2 UK feel passionately about. To see and hear perspectives across the industry demonstrates how the breadth of marketing effectiveness is increasingly being valued within businesses. Data, insight, social, customer experience, test and learn, ROI, these are all fundamentals and were covered expansively at the event”.
Sandra Fazackerley, Marketing & Consumer, Telefónica UK Limited
“The full week of effectiveness events brought into clear focus the need for marketers to use data and insight to achieve the key business objectives of growth and profits. Marketers today are in a better position to quantify their knowledge of customers and measure the ability of investments in marketing to increase brand and shareholder value.”
Chris Combemale, Group CEO, DMA