1492048181417 - Peter Field: Short-termism is killing effectiveness

Peter Field: Short-termism is killing effectiveness

OPINION: I hate to be the bearer of bad news, but if you listen to everything that is said these days about the effectiveness of new advertising channels and tools you might be forgiven for thinking that all was rosy in advertising. It is not.

I spend a lot of time analysing data from the UK Institute of Practitioners in Advertising (IPA) effectiveness databank, which go back over thirty years. The data enables us to examine how inputs (such as strategy and media choices) influence outcomes (such as business effects and campaign efficiency). We can look at trends in effectiveness over time and it is in the trends that worrying findings emerge.

These have been tumultuous times in marketing – a deep and lingering global recession has modified the mood of marketing and the evolving media landscape has altered the practices of marketing. In some very important ways these impacts have been very destructive of effectiveness. For the first time in the 30-plus year run of data, campaign effectiveness has fallen. It has fallen to the extent that we have thrown away all the gains made during the earlier years of the digital revolution. 

So what is now going wrong with the growth machine? Most of the deterioration can be put down to short-termism and its related effects. If we measure success over the short term we come to completely the opposite conclusions about what drives success than if we measure success over the long term. Short-termism inevitably undermines long-term success.

Short-termists reach for the low hanging fruit in the market, targeting advertising tightly at consumers who are in the market right now. They reduce their investment in brand building because it takes time to deliver growth and they switch ever more expenditure to sales activation and digital sales tools such as search, which can deliver short-term results but do little for long-term growth. 

Worse still, they turn away from creativity because it takes time to work its magic on the brand and sales. 

At its worst, they end up with a barrage of ‘timely and relevant offers’ delivered through retargeted online advertising (assuming it isn’t blocked by consumers). 

There is no long-term growth, merely a series of spikes in response to each offer. Sales never get easier to achieve and it can undermine the esteem and appeal of brands. It is a bottomless pit – a bidding war for the last minute pre-purchase attention of a limited number of prospects.

Brand building is different. It means creating mental structures (associations, memories, beliefs, etc.) that will pre-dispose potential customers to choose one brand over another. This is a long-term job involving conditioning consumers through repeated exposure, so it takes time; talking to people long before they come to buy. 

It requires broad reach media such as TV, because the aim is to prime everyone in the market, regardless of whether or not they are shopping right now. And because most of the audience are not in the market at the time they are exposed, it cannot assume close attention. So it relies on creativity and emotional priming, since these cut through regardless of whether people are interested in the product, and help create long-term memory structures. 

Brand building is vital if we want to make next year’s sales easier to achieve than this year’s, and so drive long-term growth.

Driven by a relentless diet of short-term digital metrics and General Management who fail to appreciate the dangers of short-term digital activation, short-termism is now growing on an industrial scale – not just in the UK, but in New Zealand too. Once, only around 8% of IPA campaigns were ‘short term’, now it is around a third and growing fast. Because brand building only takes over as the primary driver of growth from sales activation after six months, we define short-term campaigns as campaigns that ran and were evaluated over periods of less than this. 

A new genre of disposable creativity has arisen with the largely futile objective of achieving lasting success overnight. Like fireworks these campaigns make a lot of noise and light but are gone before lasting impressions are created. This has been accompanied by the diversion on a massive scale of marketing budgets from brand building to sales activation, especially paid search. Over half a billion NZ dollars were spent on Search in 2016 and growth is accelerating. The dramatic loss of long-term effectiveness in recent years is the legacy of this orgy of short-sightedness.

Let’s hope that 2017 sees the birth of a counter-trend towards long-term metrics and the use of strategies and media (like TV) that can deliver long-term success. Otherwise we will be mourning the loss of brands, not just of effectiveness.

Brit Peter Field, dubbed the Godfather of Advertising Effectiveness, is on a mission to break New Zealand brands out of their short term thinking. His visit to New Zealand was organised by ad industry body CAANZ and TVNZ.