Make Marketing Longer.
Les Binet and Peter Field delivered the latest raft of their advertising effectiveness research yesterday. It was especially interesting because their analysis increasingly covers the digital age and begins to slay some of the myths about changing media behaviour.
Key takeaways included.
Short-termism in marketing is undermining effectiveness - it boosts ROI but not profit growth. This ties in with their existing thesis that brand-building campaigns generate longer terms sales growth where activation campaigns might cause short term sales spikes but spikes that dissipate quickly as they target the low-hanging fruit of customers who are already about to buy.
The optimal split of marketing expenditure should be 60% brand building and 40% short-term activation. Current activation rates of 47% are clearly sub-optimal, so it's interesting thtat Unilever CEO has banned quarterly reporting for marketing effectiveness because he rightly sees that the best marketing doesn't operate on a quarterly schedule.
Television is key to successful marketing campaigns and increases a campaign's effectiveness by 40%. This again relates to their original thesis - video is repeatedly shown to be the most effective medium for stimulating an emotional response and it is emotional response that builds brands. As a side-note, it was also suggested that marketers need to be aware of which media are better at brand-building and therefore should not be used in activation mode.
ROMI (return on marketing investment) is a misguided focus. It can be increased simply by reducing budgets, but since promotions reduce margins, overall profitability can fall. As Peter Field said real-time marketing is all too often deal-time marketing and that just reinforces the importance for marketers to be numerate and to know their way round an income statement.
I'm still a little wary that their data-set is derived solely from IPA effectiveness award papers and I'm not clear how closely the validity of those individual papers is scrutinised. But the rigour of the analysis is praiseworthy and its lessons should be acted on by more marketers than currently seems to be the case.