It’s all about influencers these days, isn’t it? No one is immune. "I’m very influenced by the sort of things I read in a Mary Meeker presentation," said Sir Martin Sorrell in an interview on last week’s BBC Radio 4 Media Show.
Mary Meeker is a partner at Kleiner Perkins Caufield Byers, a venture capital firm in Silicon Valley. Every year she does an Internet Trends report. Last year it was a brisk, whistle-stop tour of 355 slides.
A specific slide that Sir Martin says influences him is one which compares the time spent with different media and their share of advertising investment to show what is over- or under-invested in (slide 13 in the above link).
It worries me that someone as influential as Sir Martin considers this influential. It worries me more that he may encourage investment decisions based on it. I’m not suggesting he ignore every slide, but slide 13 needs caution.
Time spent with a medium that carries advertising is useful to know. If no one is reading magazines, then it would be odd to advertise in them. But what is more useful to know is the time spent with the advertising. You can’t easily do this for all media, but you can in the world of video.
For example, YouTube activity accounts for 9% of the average person’s video diet (although not all of it is watching video, YouTube is a popular jukebox too). Watching TV accounts for 71%, two-thirds of which is commercial TV. So should A/V advertising budgets be split accordingly?
Then again, YouTube accounts for 0.9% of video advertising time and commercial TV accounts for 95%? Should budgets be split along these lines?
Well, time spent with the ads is certainly a more useful measure of time to inform ad investment decisions. But it is still flawed because time isn’t everything. In advertising, effectiveness is everything. Or it should be.
I’d prefer Sir Martin to be influenced less by the time spent comparison and more by the sort of things he will find in Ebiquity’s new report for Radiocentre, "Re-evaluating Media". Reading it is an effective use of time (as, ahem, is Ebiquity and Gain Theory’s recent "Profit Ability: the business case for advertising").
Ebiquity’s new report identified a worrying perception gap among ad industry leaders between what they think works and what actually works, especially a "clear disconnect between the scale of investment in online media and the value it delivers". Could it be Meeker’s influence?
This disconnect might help explain why overall advertising effectiveness is tumbling, as shown by Binet and Field in their recent work for the IPA, "Media in Focus". It should strike us all as odd that advertising is more sophisticated than ever, and overall ad investment is increasing, but effectiveness is declining. Could it be Meeker again?
If TV advertising were invested in according to the time spent watching it, it would do well (it is 40% of the chosen media day, according to IPA Touchpoints). If it were invested in based on time spent seeing its advertising, it would do well. But TV, like all advertising, should be invested in according to how well it performs – and, if this happened, TV would do exceptionally well (and the likes of radio would do better too).
There is a growing sense that advertisers are re-assessing investments, and media that can prove their effectiveness are well-placed to capitalise. Large question marks hang over whether we’ve been investing as wisely as we could. Thankfully, the spotlight seems to be moving back on to effectiveness.
This article first appeared on Campaign.