Pressure on the integrity of digital reporting – especially over Facebook’s recent video claims – has never been greater.
Media executives are now highlighting how revenue from programmatic-based advertising is scooped up by ad-tech middlemen who thrive on clipping tickets before an order reaches a publisher.
On the other side of the table, agency bosses are now lamenting an increasingly baked-in behaviour of marketers who demand short-term results at the expense of long-term brand health.
As a result, ad dollars are pumped into target-focus media, such as social and search, at the expense of more far-reaching alternatives offered by TV, news media and outdoor. Angst is being consistently expressed of this so-called short-termism approach, most significantly by Jaimes Leggett, who combines his role as CEO of M&C Saatchi with the chair of the Communications Council.
The council recently played host to the so-called ‘Godfather of advertising’, Brit Peter Field, who has made a reputation for challenging marketing trends and condemns the lemming-like fascination of social and search. He says this practice erodes
the link between creativity and effectiveness.
The optimum spending mix, he says, is around 60 per cent of investment into long-term building with the remainder for sales activation.
Mr Field, dismissive of media agency spending trends, told a Sydney audience: “There is a disease spreading . . . short- termism. It is that entirely deceptive and fallacious belief, that living by the quarter . . . or minute or day is somehow good enough. It is rubbish. The kinds of marketing campaigns that emerge from that short- termist worldview are not the kind that can drive the year-on- year growth that businesses desperately need.
Peter Field speaks at the 2016 Effie Awards
Mr Field, in an interview with The Australian, said: “New digital tools have transformed an awful lot of marketing communications, but it’s getting over-cooked and we need to get back to a balanced view. We should stop believing eve rything we are being told by the digital sales machine.”
Ad budgets, he said, were now being “raided to drive short-term sales”.
GroupM’s Mark Lollback runs the nation’s biggest media-buying agency, which has more than 190 clients and commands billions of dollars in ad spend. It is this sector more than any other that executes so-called short-termism.
A former CMO, he says marketers spend less than 5 per cent of their time on advertising and points out the creative development process is fragmented and more complicated than ever.
He says agencies need to “deliver results, manage margin and do it on a lower-cost structure”.
These dynamics feed the digitally- focused, short- term approach.
Short-term, quarterly results have long been an obligation of public companies. It is a discipline enforced through stock markets by investors who use 12-week cycles of reporting and forecasts to trade and pro t. Highly-targeted digital ad offerings, such as those offered by social networks, are a natural t in this environment.
Mr Lollback, a former chief marketing officer at PepsiCo and McDonald’s, says “there is no doubt with the way we have become so results focused . . . that has created by an urgent need for us to deliver quarterly results”.
“If you are in a business that is about building brand over time, then we are caught on this short-termism drive,” he says. “You have to differentiate from measuring daily sales and having strategies that run over time. At McDonald’s, we were caught on the drug of short- term. Focus on long-term strategies delivered faster growth. A lot of people under pressure are focusing on tactics. You will get a much better return investing in a strategy that has a longevity to it.”
Hear Mark Lollback chat more about short-termism, disruption, social media ad metrics and the evolution of ROI the future in this podcast.
Research supports this view. Nielsen’s Catalina Solutions, which conducted a study with CBS Corp, said that it supported the premise that “the average multiple for the long-term e ect of advertising is approximately twice that of the short- term effect”. It cited a Kellogg’s Special K campaign in which short-term advertising drove the initial sale (1.0) but the campaign over the long-term had a multiplier effect of 2.8.
Another world-leader in this field, Millward Brown, studied short-term focused campaigns at the height of the financial crisis and stated only 14 per cent of campaigns were able to meet their goals. “We estimate that only about 5 per cent of total brand volume results from short-term ad effects,” writes the company’s global brand director, Daren Poole. “Brands (that) people consider to be meaningful, different and salient are able to command greater volume, share or charge a premium price, or both. While some form of short-term success is necessary, it is rarely sufficient.”
A new study from the UK news brands body, NewsWorks, showed that for long- term campaigns the effectiveness of using British national print titles increased campaign effectiveness by 62 per cent.
Overall, the benefit of including newspapers in a multi-chan- nel campaign could create a 36 per cent uplift on overall results, or up to 58 per cent if both print and digital were used.
Using news brands in con- cert with other media in the UK had the following e ectiveness boost: TV (+65%), online display (+52%) and social media (+118%).