07/12/2016

Half of my advertising is wasted

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David Thomason, Chief Strategist at FCB New Zealand, believes too many ads are based on fashion, not fact.

“Half of my advertising is wasted – but no one can tell me which half!”

There’s much doubt about whether William Hesketh Lever or John Wanamaker actually said this. (Both brilliant late 19th century business pioneers.) But ever since marketers have sought to eliminate this perceived “waste”.

Thomason suggests the quote is worth closer scrutiny.

“It’s a witty statement, so we want to see truth in it. But how did they know half of their advertising wasn’t effective? What if little of it was wasted, and it was working in important ways that they just couldn’t see?”

Thomason believes there’s too much marketing rhetoric today that’s based on fashion rather than fact.
“Despite the evidence, many believe we should shift our emphasis away from broadcast advertising, and target core customers and “fans” who will spread your message. But we need to pause, and look carefully at what’s actually happened.”

There’s been little time for pause. Digital technology has driven the quest for efficiency to new heights. The ad industry has evolved significantly, taking advantage of new media channels and creative opportunities, and introducing new principles for effectiveness.

But many, like Thomason, believe we over-reacted when we rewrote some of the rules.

The internet really started changing advertising about 15 years ago, spawning numerous digital evangelists. At last, through clever analysis, marketers would now accurately target only the people ready to buy their product. Not only would this eliminate expensive wastage; advertising could become personally relevant.

As consumers took control of online media for their own social purposes, they would seek out and pass on those messages – for free. Many researchers declared that “a friend’s recommendation” was the strongest influencer, without considering what influenced those friends in the first place.

Substantial evidence has shown that very creative campaigns tend to out-perform more ordinary ones. Now creatively engaging campaigns would be even more powerful; carrying the messages to millions via new, free, audience-driven networks.

Various derogatory phrases were introduced to describe the suddenly old-fashioned approach; Spray and Pray. Interruption Marketing. And, possibly the most damning, Traditional Advertising.
The new approach would save money. It also sounded wonderfully modern – even morally appealing. Audiences would no longer be bothered by unwelcome marketing communications.

“Unfortunately”, Thomason says, “It’s time to admit that, although technology has boosted our arsenal considerably, it hasn’t quite worked out as some predicted”.

The Ehrenberg Institute led the evidence-based charge. Byron Sharp’s 2010 book “How Brand’s Grow” outlined their argument; For brands to grow they must continually recruit new customers, rather than target a loyal base of fans.

This year Procter and Gamble, the world’s largest advertiser, reduced their spend on highly targeted advertising. Marc Pritchard, P&G’s chief marketing officer, said the company realised it took the strategy too far. “We targeted too much, and we went too narrow.”

And now there’s the latest Gunn report, an analysis of 20 years of case studies, entitled “Creativity and effectiveness under threat”. Analyst Peter Field blames a reduction in effectiveness on a move away from highly visible media, “Budget investment behind creativity has fallen sharply” and long-term media support, “Short-termism has grown dramatically”.

In Field and Binet’s November 2016 paper, “Marketing in the Digital Age” they declare “Penetration (through more customers rather than loyalty) is the main driver of brand growth”. And, secondly, that “Mass media are still crucial for effectiveness”.

FCB’s Thomason says “One of the strangest moves in recent advertising history, that we managed to avoid, was to separate media agencies from creative agencies at a time when we need to coordinate more closely than ever. It’s clear that if brand-building creativity comes at the expense of broadcast media support, whatever the channel, it fails. Marketers of big brands still need to prioritise continuous exposure to large numbers of people. And, unfortunately, traditional or online, we still have to buy those eyeballs.”

Cambridge University researchers, Amber and Hollier, possibly reached the most provocative conclusion. Their 2004 paper was entitled “The waste in advertising is the part that works”. They clearly took into account the foibles of human psychology. Challenging the conventional wisdom that waste should be minimised, they stated “Waste contributes to advertising effectiveness by increasing its credibility.”

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