Is Marketing Becoming Less Effective?
13 May, 2022
A lack of meaningful measurement in the advertising and marketing industry has caused it to be less effective, but there are many ways to overcome this, says Tony Miller, VP of Growth + Performance for WW, in his latest column for MAD//Insight.
New research published by the Data & Marketing Association (DMA UK) and Salesforce this month have unearthed the stark reality that a lack of meaningful measurement in the advertising and marketing industry has caused us to be less effective. The report reveals deficiencies in our industry’s current measurement models and what we as marketers can do to overcome them.
Perhaps most shocking was the number of measures that are currently being used by marketers to articulate campaign effectiveness - 170! Having such a vast array of different marketing measures does little to promote a coherent approach to marketing measurement, which is so crucial to business success and marketing effectiveness.
This is further compounded by the fact that almost half (41%) of these measures only relate to campaign delivery and digital vanity measures (e.g reach, impressions, clicks, and social engagements) and not true brand, response or business impact measures.
Sadly, the issue hasn’t improved during the last two years of the pandemic. After an initial boost in the early 2020 pandemic phase, overall effectiveness still declined by 23% in 2021. Specifically, business impact reporting (e.g. profit, sales, market share, and loyalty) has declined to cover only 6% of effectiveness measures used in 2021. Whilst brand performance (e.g. awareness, consideration, purchase intent, and brand perceptions) improved year-over-year, response effects (e.g. conversions, leads, bookings, and footfall) also declined.
Light at the end of the tunnel.
The pandemic heightened the need for brands to lean more into a short-term view of marketing. Balancing both the short- and long-term growth was a challenge. It was about keeping the lights on and ensuring those daily, weekly, and monthly sales were achieved. Now, as we emerge from the rubble of the pandemic, we have an opportunity to tackle this head on. We can redress the balance and focus on both brand and response measures as the two combined are vital for sustaining growth.
Focus on measuring the 59% of metrics that matter.
The CMO’s role is challenging enough, as it requires discussion in the boardroom to defend the effectiveness of marketing investment. Therefore it is vital for us, as a community, to address three key areas: First, we need to streamline our measures. Second, we must increase our focus on measuring real business outcomes. Finally, we must all start speaking the language of the CEO - demonstrating the impact of marketing on the long-term future of our organisations.
A blended approach is best.
Marketing effectiveness isn’t only about the return on investment (ROI) of a campaign, despite it being a key measure. All marketing effectiveness metrics must ladder up to long-term value and consider the bigger picture. We need to include brand and response measures when determining the effectiveness of our work. Campaigns that focus on a combination of brand building and response, whilst collectively targeting new and existing customers, tend to drive more effects overall.
Therefore, the discussion in the boardroom needs to be a conversation of both volume and value. Our industry must invest more in upper-funnel activity to make performance activity work harder and more efficiently. Having tools such as multi-touch attribution (MTA) and marketing mix modelling (MMM), help unlock this - true long-term value to CAC(customer acquisition cost), allowing brands to invest in the right channels, at the right time.
So whilst there is work to be done, it is clear what we have to do:
● Turn our attention to measurements that matter. Vanity metrics, or campaign delivery metrics say little about campaign effectiveness.
● Focus on brand and response effects in equal measure. Campaigns that focus on both are more effective than those that focus on one over the other.
● Balance out the need for both short- and long-term campaigns in our marketing mix. Business effects point toward the long-term sustainability of a business and must be at the centre of our thinking and top of the agenda.
● Speak the language of the boardroom. It’s no longer just the CMO’s responsibility to defend marketing effectiveness. The entire marketing team needs to adopt the same mindset so each campaign ladders up to long-term business growth.
Click here to download the DMA’s Meaningful Marketing Measurement report.