Wake up and smell the effectiveness
The IPA’s latest Bellwether report is out. Marketers surveyed have revised "internet budgets" up to the highest rate for a decade. "Main media advertising" investment has also been revised upwards, though to a lesser extent.
Leaving aside the questionable usefulness of "internet budgets" as a category (it includes everything from search to social, banners to blogs), the Bellwether has put me in mind of a recent report by the clever people at Enders Analysis. It had a very punchy ending, "Advertisers, wake up."
Why does Enders think advertisers are asleep? Because of what they perceive as a "focus on bean-counting metrics... at the expense of brand building and brand maintenance" and a "short-sighted short-termism [which] has incentivised sellers and buyers alike to push for increases in online budgets, where there exist significant risks of over-pricing the inventory".
In a nutshell, they think brands are spending too much online. Those upwardly-revised "internet budgets".
Obviously, it depends where online. Advertising online with The Economist or in the broadcaster VoD environment is a world apart from the "murky" regions of online advertising that Procter & Gamble’s Marc Pritchard has thrown a spotlight on.
There’s no doubt that the reputation of some online advertising has been damaged recently with all the revelations about fraud, measurement miscalculations and ads appearing next to extremist content and fake news.
There’s no need to rehearse the revelations here, but brands’ concerns appear to be taking their toll on some internet budgets. Group M believes advertisers will pull hundreds of millions from Google and Facebook in 2017. Pure-play internet advertising spend will grow at its slowest rate since 2011, according to Group M (it will still grow, however).
Fair enough – although it raises the question of why agencies didn’t come to the decision to pull spend before their clients did. But it got me thinking about what influences budget decisions. Here we see reputational, brand safety scandals having an effect. But what about just plain effectiveness?
With perfect timing, effectiveness is also in the spotlight at the moment, thanks to the latest effectiveness study from Les Binet and Peter Field for the IPA.
Media in Focus is full of thought-provoking insight into how marketing rules have changed (or not) in an age when the many different forms of online advertising are now established.
The IPA study was co-funded by Google and Thinkbox together, which hopefully double-underlines its impartiality (as we don’t always agree on what advertisers should do).
There is plenty of good news in the study, not least that TV remains the most effective advertising and is becoming more effective, in part due to a great relationship with online video. It also shows that mass media are crucial – after all, you don’t become a household name by avoiding most households.
However, there is also bad news. TV advertising may be getting more effective, but the study found that overall effectiveness is declining because of worrying trends which, left unchecked, will damage business growth. Two of these trends are related - (not enough on brand). Enders comes to the same conclusion via a different route.
Binet and Field have also identified media channels that are being under/over-invested in, based on the effect they have on market share growth. Video – both TV and online video – is currently being under-invested in.
Online non-video (display and social) and digital activation (search, email, SMS) are being over-invested in. Again, Enders came to a similar place.
There is obviously a lot more in both the reports and I hope all marketers make time to read them. But what I hope even more is that they act on them. Not just because TV would benefit – it certainly would, as would some other media – but because these findings, together with the mountain of effectiveness studies from the last decade and from around the world, are offering brands clear, consistent advice on how to grow and be more profitable. And achieving that is what should keep marketers awake at night.
This article originally appeared on Campaignlive