Advertisers stuck in 'vicious circle of short-termism'

11 May 2017  |  Ellen Hammett 
Advertisers stuck in 'vicious circle of short-termism'

McCabe speaking at the 2017 PPA Festival during a session hosted by Magnetic

It is estimated that 90% of the UK's online advertising growth was generated by Google and Facebook last year.

The effects of this are being felt far and wide - but it is publishers that are arguably suffering the most as they struggle to keep digital revenues above water.

This is in spite of numerous effectiveness studies proving that chasing clicks and eyeballs around the web does little to build brand value in the long-run. So why do advertisers continue to inject such vast amounts of cash into online at the expense of media that has consistently proved its long-term effectiveness?

Douglas McCabe, Enders Analysis' CEO and director of publishing and tech, says the industry has been sucked into a vicious circle as the obsession with short-term metrics and quick wins continues to grow.

"We’re not measuring the long-term consequences for brands precisely because we’re overstating the value of short-term targeting and engagement, and we are underrating the importance of long-term awareness and consideration to quality association and context," he told publishers and marketers this week.

"Not all of the value relates to search and social click-through; if it does we are effectively saying goodbye to quality media and advertising effectiveness will diminish even faster."

McCabe was speaking at the 2017 PPA Festival on Wednesday (10 May), where he unveiled new research by Magnetic and Enders arguing marketers' focus on short-term, online successes risks reducing the boardroom's focus on long-term planning and effectiveness.

"Such radical spending patterns and extraordinary concentration [into Google and Facebook] intuitively feels very extreme," he said.

"Marketing fundamentals have not changed...Planning and creative matter more now than before and yet investment in them both seems to be falling. As an industry, we are pouring more and more revenue into two platforms."

McCabe said what surprised him the most when Enders discussed the issue with advertisers was that while they do express concerns, they seem unable to stop what McCabe calls a "vicious circle".

"It’s like a collective shrugging of the shoulders, as if marketing has become part of a larger, corporate attitude that it can do nothing to influence," he said.

But for agency adam&eveDDB's co-founder, David Golding, it all comes down to a game of trumps between common sense and risk.

"Brand building is a very expensive, very public risk...whereas a series of not very expensive, short-term, online surgical strikes aren’t that big a risk," Golding said.

"So there’s common sense...‘I know what the right thing to do is but this is a little bit terrifying’...Going out there and sticking everything on black on one John Lewis Christmas ad every year is a high stakes game, whereas I can play a much, much simpler low-risk game and that trumps common sense."

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