Pay more attention to the growing body of evidence around proven media
It is critical advertisers have the right information to make the best investments, writes PwC's Neil Duncan
As the world has become ever more 'always-on', with the continual supply of seemingly limitless information via smartphones increasingly being recognised as both a blessing and a curse, what has been the impact of these changes?
Consumer behaviour has changed significantly in recent years, driven by the rise of social media, as well as that of e-commerce.
Simultaneously, we have witnessed ever-shortening horizons for businesses (with a corresponding rise in importance of quarterly reporting), the desire for 'digital transformation' and the shortened tenure of C-suite executives. These factors have combined to create the unhealthy situation of many advertisers moving away from long-term brand building and profitable growth, in pursuit of short-term revenue boosts.
However, there is a growing body of very credible evidence, built up over a number of years, that challenges the premise on which media planning and investment decisions are being made.
The Marketing effectiveness in the digital era study by Les Binet and Peter Field, on behalf of the IPA from June 2017, observed that there has been a destructive trend of advertisers developing short-term strategies that have led to a number of important false conclusions about effectiveness. Their databank of case studies points to short-term boosts in sales but not to long-term profitable growth.
Another excellent study from 2017, Mounting risks to marketing effectiveness by Enders Analysis, also supports this view, stating "mounting evidence suggests a focus on quick returns and cheap media 'at all costs'...this is hurting marketing effectiveness, particularly when measuring long-term return on investment, brand equity and consumer satisfaction".
Enders went on to assert that, "in effect we believe that a nuanced, analogue tool has been replaced by a too-simplistic digital tool with unverified consequences for many brands". Obviously this can have very serious effects on established media.
Additionally, Radiocentre recently commissioned a report, Re-evaluating Media, which highlights a critical gap between the perceived and actual effectiveness of media, reminding the marketing world of the enduring value of 'proven' media such as television, radio, outdoor and print, in all its forms (off and online).
We have seen these effects play out repeatedly in recent years and there are numerous cases of established media being dropped from the media mix with little or poor justification - either being priced out of consideration, or portrayed as having a worse ROI than online formats - neither of which is necessarily true.
The narrative of 'digital' advertising replacing 'traditional' advertising is wrong on a number of levels, but nevertheless print media in particular has been more aggressively substituted for social media and search than any other.
It's in this context that the study by Newsworks and Benchmarketing, Planning for Profit, is so important. The main thesis of the research, that marketers should pay close attention to brand building and profits when assessing the effectiveness of marketing spend, could not be more relevant in today's world.
The insight from this research is eminently actionable, but there needs to be the will to use it. The message to advertisers, and their agencies, is that it might just lead to a more profitable outcome.
The importance of building brands and profits, and doing so with advertising in a trusted context, is supplemented by a third theme around audience data. The advent of EU GDPR, and later this year the new ePrivacy regulation, is shining a light on the source and use of personal data.
But even without this regulation, we believe the marketing world is starting to realise that the quality of third party data is often questionable at best and that, in contrast, first party data is frequently of relatively high quality.
Effectiveness measurement relies on access to the right data, and advertisers need to ensure that they are working with partners who are both committed to effectiveness and its measurement.
At a time when transparency in media is in the spotlight, it is critical to have the right information to make the best investments.
Media owners in the UK have built businesses over many decades by understanding and appealing to their audiences; it's time to remind ourselves that they know their customers and their preferences very well.
Neil Duncan is director of media insight, performance & assurance at PwC