Future of Brands: Will the tide turn against online marketing?

13 Feb 2018  |  David Pidgeon 
Future of Brands: Will the tide turn against online marketing?

Tech giants and online advertising are under intense scrutiny - but is it enough to see power swing back towards legacy media?

It is a little over a year since P&G's chief brand officer, Marc Pritchard, delivered his transformative speech calling for a root-and-stem clean-up of online advertising, and in that time a lot has changed.

Amongst the changes is the new power-play - no doubt spurred by Pritchard's clarion call - in which established media are doing much more to try and curb newer online media from stealing all the adspend.

To do this, they have deployed a range of strategies, such as setting aside old commercial rivalries to boost scale, deploying charm offensives, or authoring robust effectiveness studies.

They have also been very efficient at unearthing and highlighting - often using their clout as media owners - the various pitfalls and problems with many online platforms.

To that end, the last 12 months has witnessed a barrage of headlines about brand safety, ad fraud, transparency, viewability and mis-measurement jump out of the trade press and into the mainstream.

Yet despite the now obvious flaws, online still promises - and in lots of ways delivers - a heck of lot for advertisers. Scale, targeting, novel formats, flexibility, low costs, great links to data and so on, which means many marketers have been reluctant to question things too hard. But if there has been an over-investment in online, only a few brave brands have dared admit it.

However, with another titan in the advertising world, Unilever, laying down a new ultimatum to the likes of Google and Facebook over issues such as brand safety, trust and social responsibility, is there enough evidence to suggest that the tide is set to move against online marketing?

"I get the sense of waking up," says Richard Bradford, group strategy director, Wavemaker.

"We had a recessionary period where there was lots of financial pressure, then the promise of this new thing [that was characterised by] innovation, measurability and low cost and I think we were seduced by this."

Bradford says that from 2011 onwards the balance of power went to digital - but at the exact same moment the overall effectiveness of marketing "went downhill".

The decline in effectiveness is largely attributed, he says, to the short-termist nature of online marketing which is great at sales activation, but much less useful for longer-term brand building.

The short-termism problem was also a by-product of business models that were being turned upside down by digital disruption, says Andrew Challier, strategic marketing investment advisor at Ebiquity.

"The consequence now is that short-termism has risen up, because the spotlight is on money and people are being judged on the next quarter's results and that drives some very potentially inappropriate behaviours," he says.

Challier says that what the industry is now witnessing "is a series of reality checks".

So does that mean budgets are shifting?

"In some extreme cases we're seeing money being rebalanced across the portfolio of investments," he says. However, for most clients all Challier hears is people saying "la la la la" with their fingers in their ears.

"The problem is, it's an existential threat," Challier says. "Measurement [of digital's true effectiveness] is going to make some people look like idiots. But people have to face up to that fact. And they also need to face up to the fact that measurement is good. It's not a threat."

Meanwhile, Bradford says one of the conversations Wavemaker is increasingly having with clients is about 'responsible' online investments.

"It's not just about brand safety and protecting their brand," he says. "It's also about responsibility and responsible investment and saying 'where's this money going?'. Clients want to know what it's funding."

Over the last year the ad industry has witnessed a spate of serious brand safety issues which saw ads placed alongside extremist content, highly questionable vlogs, and next to fake news.

In response, GroupM, the investment arm of WPP, said in 2017 advertisers had increased their brand safety and accountability expectations and were taking "a more measured view toward digital". The problem even resulted in a downgraded ad forecast back in July last year, with growth in the pure-play internet category revised down by -4%.

For Liz Workman, managing partner, Workman Partnership, budgets are still unlikely to shift in any meaningful way out of digital. However, she does believe there will be tighter scrutiny.

"We've got to a point where senior marketers are far more educated and informed than they probably were a year ago. And although I don't think budgets, ultimately, are going to shift massively, I do think there will be a much tighter focus on how money is spent."

The bigger clients are certainly taking things more seriously. In a recent speech at the annual IAB conference in California, Keith Weed, Unilever's chief marketing officer, warned the likes of Google, Twitter and Facebook, of the FMCG business’s need for its consumers to have “trust in our brands”.

In his speech on 12 February, Weed said: “We cannot continue to prop up a digital supply chain – one that delivers over a quarter of our advertising to our consumers - which at times is little better than a swamp in terms of its transparency.”

The client worm is certainly turning, then, and the response should see digital clean up. But does that, at least in the interim, mean legacy media is going to see the power shift back in its favour?

"I think that the pendulum is beginning to swing back, probably quite rightly," says Denise Turner, insight director, Newsworks.

"But it will never go exactly back to where it was before because we live in a different world now - but we need to start employing our critical faculties from now on."

VIDEO: is the tide really turning?

Denise Turner, insight director, Newsworks, and Jacob Lachmann, CEO, AudienceProject, discuss whether the tide turning against digital marketing - and if so, what it means.

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