Iris & IPA Eff Week
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This document summarizes a panel discussion on improving marketing effectiveness. The panel discussed four key areas to push the effectiveness agenda forward: 1) Moving beyond effectiveness by small increments and trying new approaches, 2) Treating effectiveness as a competitive sport to stand out from competitors, 3) Taking a more holistic view of return on investment beyond just direct sales, and 4) Introducing the language of risk and reward to marketing. The panelists from companies like Google, Adidas, and iris advocated for balancing short-term metrics with long-term brand building and finding new ways to measure the impact of marketing on future growth.
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Iris & IPA Eff Week
- 2. 22Confidential © 2016 Jonny ProtheroeHead of Marketing Insights UK Google Lindsey Clay CEO Thinkbox Michael Barrett adidas GLITCH Sally Taplin Managing Partner iris Concise Sophie Lewis Head of Planning, iris Chair: Paul Bainsfair Director General IPA Ben Essen Executive Planning Director iris
- 4. 44Confidential © 2016 What do we mean by effectiveness?
- 5. 55Confidential © 2016 16/11/2017 Successful delivery against business objectives. Driven by an evidenced view of what is and isn’t working. Active decision making KPIs Consistent measurement Learning culture
- 6. 66Confidential © 2016 How is your organisation doing? 16/11/2017 Self-assessed ‘scores out of 10’ Source: IPA Culture First
- 7. 77Confidential © 2016 However overall levels of effectiveness are falling 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2006 2008 2010 2012 2014 2016 Numberofverylarge businesseffects 10 years ending Source: IPA Databank
- 8. 88Confidential © 2016 So what’s going on?
- 9. 99Confidential © 2016 Source: Companies; Jefferies analysis Organic sales growth in Global Foods & HPC since Q1 2009 1 Average of Nestle, Unilever, Danone, Kraft, Mondelez, P&G, Colgate, RB & L’Oreal (1.9%) (0.2%) 1.4% 4.9% 6.3% 5.7% 5.0% 4.6% 3.7% 3.0% 2.2% 1.5% 2.0% 2.6% 1.6% 2.4% 2.4% 4.0% 3.2% 2.7% 2.0% 1.5% 0.2% 0.5% 0.0% (0.1%) 0.2% 0.1% 1.5% 1.6% 1.3% 0.8% 0.3% 0.3% 5.1% 2.7% 1.8% (0.4%) (1.3%) (1.3%) (0.6%) (0.0%) 1.1% 3.6% 4.0% 4.7% 4.0% 2.3% 2.4% 2.0% 1.9% 0.6% 0.9% 1.3% 1.3% 1.7% 2.8% 3.0% 3.0% 2.8% 2.6% 3.5% 1.6% 1.4% 1.5% 1.2% 1.3% 1.1% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Volume Price/mix With growth slowing, efficiency trumps effectiveness
- 10. 1010Confidential © 2016 Brands are spending less on media 0% 2% 4% 6% 8% 10% 12% 14% 16% 2006 2008 2010 2012 2014 2016 AveESOV 10 years ending ESOV all ESOV long cases Source: IPA Databank
- 11. 1111Confidential © 2016 Sales activation has grown 40% - 50% advertising spend. 0 2,000 4,000 6,000 8,000 10,000 12,000 2000 2015 Analogue Digital Direct response ad expenditure (£m) Source: Enders Analysis Harnessing opportunities to activate immediate sales
- 12. 1212Confidential © 2016 Source: Emma Harris, IPA 86 30 0 10 20 30 40 50 60 70 80 90 Months 1984 2013 65% decline in length of agency tenures Exacerbated by shorter tenures
- 13. 1313Confidential © 2016 Increased activation of sales, lack of investment in brand 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2006 2008 2010 2012 2014 2016 %casesreportingverylarge effects 10 years ending Activation effects Brand awareness growth Source: IPA Databank, 1998-2016 cases
- 14. 1515Confidential © 2016 “Putting a financial outcome on our brand campaign is virtually impossible, because it’s not driving a specific customer to come in and buy xyz – it’s driving a brand halo effect.” Marketing Finance Controller We’re failing to justify ‘the fluffy stuff’ “I am a Finance person. I like certainty. Marketing also look at – I can’t quite remember the name of it – something to do with brand equity. If I’m really honest from a finance point of view I don’t give much weight to the softer ones – the brand equity stuff.” Finance Director. Source: IPA Culture First
- 15. 1616Confidential © 2016 Salesupliftoverbase Time Source: Binet & Field 201 Sales activation Short term sales uplifts Brand building Long term sales growth Short term effects dominate ~6 months We need clearer distinction between short and long term levers
- 16. 1717Confidential © 2016 “It’s about equilibrium and balance. Finance gives you an indication of the current health of the company. The brand is an indication of the future performance.” Corporate Innovation and Strategy Director. “We need to think of marketing as less of a cost centre but as a strategic growth driver.” Lindsey Clay, Thinkbox. Source: IPA Culture First, iris Eff Event We need clearer distinction between short and long term levers
- 17. 1818Confidential © 2016 So what do we need to do?
- 18. 1919Confidential © 2016 Commit to the KPIs that matter Methods (
- 19. 2020Confidential © 2016 Start talking the language of finance 16/11/2017 ‘If we change the language, Financial Directors will start paying attention’ Jonny Protheroe, Google
- 20. 2121Confidential © 2016 Non working media Brand halo effect Soft metrics Longer term spend Asset Creation Value/Margin protection Levers to unlock future growth Margin defence /Share protection Start talking the language of finance
- 21. 2222Confidential © 2016 Pushing the effectiveness agenda forward
- 22. 2323Confidential © 2016Confidential © 2016 98.6%99.8% no data targeting with data targeting 1. Move beyond effectiveness by increments
- 23. 2424Confidential © 2016Confidential © 2016 1. Move beyond effectiveness by increments
- 24. 2525Confidential © 2016Confidential © 2016 1. Move beyond effectiveness by increments “We need old forms of measurement for new forms of media” Lindsay Clay, Thinkbox “Sometimes you need to throw all the cards in the air to try something else. Rather than optimise towards the middle, ask yourself what was special about the top 1%?” Jonny Protheroe, Google
- 25. 2626Confidential © 2016Confidential © 2016 “If everyone were to advertise effectively, then advertising wouldn’t be effective” Ivan Spiegel, Snapchat 2. Treat effectiveness as a competitive sport
- 26. 2727Confidential © 2016Confidential © 2016 2. Treat effectiveness as a competitive sport
- 27. 2828Confidential © 2016 “For any brand with competitors, there’s no such thing as the no-risk option. If you don’t do it someone else will do it… But a small controlled experiment can demonstrate that it can work” Michael Barrett, adidas Glitch Source: iris Eff Event
- 28. 2929Confidential © 2016Confidential © 2016 “This £ spend is worth £xx in its lifetime” • Beyond direct sales returns • Create proxys for long term profit growth • Don’t underestimate the unmeasurables • More focus on price elasticity 3. A more holistic view of ROI
- 29. 3030Confidential © 2016 “Don’t be too quick to judge short term measures. They tell you that you’re doing something right now that is working. It’s ok to embrace the pragmatic within the big picture.” Michael Barrett, Adidas Glitch “How do you give quantifiable value to the brand in the future? How demonstrate its value vs quick fire returns?” Sophie Lewis, iris “Back in 2007 Marketing in the Era of Accountability identified the most accurate predictor of effectiveness was likeability. That’s not a bad measure” Lindsay Clay, Thinkbox Source: iris Eff Event
- 30. 3131Confidential © 2016Confidential © 2016 4. Introduce the language of risk and reward
- 31. 3232Confidential © 2016 “Risk taking isn’t gambling. It’s having a culture that is prepared to look forward and plan. If you don’t have the planning you can’t confidently take a risk.” Sally Taplin, iris “Brand response means we’re doing it for brand reasons but we’ll measure it using response metrics” Jonny Protheroe, Google Source: iris Eff Event
- 32. 3333Confidential © 2016 Jonny ProtheroeHead of Marketing Insights UK Google Lindsey Clay CEO Thinkbox Michael Barrett adidas GLITCH Sally Taplin Managing Partner iris Concise TODAY’S PANEL Sophie Lewis Head of Planning, iris Chair:
Editor's Notes
- Welcome to EffWeek – we’ve partnered with the IPA Wanted to give you a snapshot of the the latest thinking and perspectives in the industry But we also want to push the conversation forward
- Les Binet and Peter Field have updated the work of the long and the short of it to understand marketing effectiveness in the digital era Fran Cassidy has led a project supported by CIMA and the IPA to understand the state of effectiveness culture in organisations And the global investment firm Jefferies has been reseraching the CFO and City perpective.
- We’re going to have some serious debate from Thinkbox And to save them one debate I’m going to try starting with a definition Always good to start these things with a definition
- Clear on the business objective of marketing. What commercial outcome are we trying to create (both long and short term) (laddering up marketing objectives) Driven by an evidenced view. This is about consistent, objective measurement. But it’s not just about results. It’s about how results are used to drive future behaviours. And its about making clear decisions about what we should and shouldn’t do. And it’s not a one off. It’s about a learning culture that combines planning, actioning and refining activity to constantly driving the business forward
- A lot of organisations feel like they’re progressing. With a fast trajectory to it. Over three quarters of organisations interviewed have increased resource, or created major new decision/reporting systems for effectiveness in the last 3 years. Over a third have created specialist units in the last 3 years. We are focussing more on this now. The budget is as big as the capital expenditure but has none of the rigour. Commercial Finance Manager
- Out of 10 Getting better or worse?
- Crisis of growth. Top line isn’t growing, so increased focus on bottom line. Efficiency over effectiveness Patrick Barwise, London Business School Martin Deboo, Jefferies
- Budgets falling
- Like football managers
- Overall Responsibility still sits within the broad Marketing function. Differing levels of competence, but whilst all are confident they are improving their understanding, some feel they have created already solution that works well, or will do in next 12-24 months.
- More involvement from board – which is q good thing / finance Brand lost its currency – and point – in the boardroom And boardroom more involved
- Sales = current performance Brand = future performance We need everyone to understand this
- Future performance is of course hard to measure. Brand measures are a proven way of understanding future performance
- NB – those metrics that turn into KPIs – sometimes change – 20-40% change per year. You have to get the leadership teams comfortable with the language and they have to understand and have confidence in the data, such as econometrics, so you don’t waste time challenging the data and discussing generalities, but having meaningful and nuanced discussions about what we should do.
- Its to help create the oxygen to build funds to invest back into brands. Reference to de risking
- So that’s where we should be now. But how can we push the agenda forward? Panel – effectiveness agenda for modern age
- But looking at that data another way. Click throughs on banner advertising average around the 0.2% mark. Behaviourally targeted advertising are hitting up to 1.4%. Which means the ad is being ignored by only 98.6% of people Could we call that a win?
- And we only need to turn to the IPA databank to remind ourselves that great creativity should aim not to drive incremental improvement, but a multiplier effect. The fact that this stuff doesn’t come through isn’t built on what has gone before, but through creative leaps
- And we only need to turn to the IPA databank to remind ourselves that great creativity should aim not to drive incremental improvement, but a multiplier effect. The fact that this stuff doesn’t come through isn’t built on what has gone before, but through creative leaps
- By the time it’s proven, it often doesn’t work any more Always need to keep moving forward
- From a looking back culture to a learning culture Not enough to use variations More of a test and learn approach
- Future performance is of course hard to measure. Brand measures are a proven way of understanding future performance
- But when we do test and learn, think more broadly about returns. Needs to be about more than ROI ROI focuses on short term and ignores long term profit growth. Must find proxys for long term impact Price elasticity has lost a lot of focus –marketing can uniquely impact consumer’s willingness to pay a premium for your brand
- Future performance is of course hard to measure. Brand measures are a proven way of understanding future performance
- Future performance is of course hard to measure. Brand measures are a proven way of understanding future performance
- Welcome to EffWeek – we’ve partnered with the IPA Wanted to give you a snapshot of the the latest thinking and perspectives in the industry But we also want to push the conversation forward