Share of model, a new marketing measure for the GenAI era, could become the latest in the canon of marketing’s ‘share ofs’, which appear to go hand in hand with each successive new era of marketing and the new technologies that enable them.
It looks like we could be at the start of a new era in communication. We’ve had the print and the electronic eras, and the tectonic plates are now shifting from the digital to the GenAI era.
Within marketing specifically, all kinds of new things will emerge to take advantage of the new technology. New roles, new skills, new brands, new objectives, new tactics, new agencies, new creative forms, new production techniques, new research methods. And new metrics to help us track success.
But it’s always important to think about what’s not new and what’s not changing too. Too much of what’s new in marketing gets built by people with no real understanding of the fundamentals and what’s proven to work. Which is why, whenever thinking about what’s coming, my instinct is to try to connect it to what’s gone before.
So when a colleague at Jellyfish, Jack Smyth, started talking about ‘share of model’ early this year as a way of measuring a brand’s presence within AI data sets, I had a few basic thoughts in quick succession. First, that sounds genuinely new. Second, it feels reassuringly familiar. Third, I wonder if, as with share of voice and share of search, it relates to share of market. (And fourth, ‘why the hell didn’t I think of that?’.)
With most apparently new ideas, they’re never 100% new but are always combinations and evolutions of previous ideas. In fact, for new ideas to gain traction, they usually need to be both original and also familiar. The novelty helps them get attention and the familiarity helps make them easy to adopt.
Jellyfish has built a platform to help monitor share of model (you can get a flavour of it here), and is working with a number of major brands to make it work in practice as a marketing and brand insight tool.
But before looking at what share of model is and what it could become, here’s a brief look at its ‘share of’ forebears, the giants whose shoulders it’s standing on.
Share of market: The ‘share of’ metric to rule them all
Share of market (or market share) is the Patient Zero of all the ‘share of’ metrics. It really caught on from the 1950s onwards with the explosion of mass production and mass consumerism, as global markets grew, competition intensified and assessing a company’s market position relative to competitors became a priority.
Businesses had previously relied on anecdotal evidence and intuition to gauge their market positions, but from the 50s companies began collecting data more systematically and on a bigger scale, conducting surveys, tracking sales and using more sophisticated statistical methods. The simultaneous rise of early computers enabled all this.
Source: Google NGram showing the rise in mentions in publications of ‘share of market’ and ‘market share’ from the 50s
Market share had its big moment around 1974-75 when the Harvard Business Review published an article about the positive correlation between market share and ROI, saying that businesses with higher market share tend to have higher profit margins, with economies of scale, market power and quality of management amongst the major factors driving this.
While market share growth remains a primary goal for most brands, over the last 20 years the spotlight (at least in marketing) feels like it’s shifted somewhat to metrics that are more in marketing’s increasingly narrow control, are easier to monitor and move more quickly. Today’s marketers are addicted to the instant gratification of metrics that see bigger, faster shifts. Market share is perhaps more suited to stable and mature categories, and a little hard to keep track of in dynamic and emerging categories, which may mean it’s become less of a North Star for some, however wrong that might be.
Share of voice: The ‘share of’ metric for the mass media age
Marketing’s next big ‘share of’ metric, share of voice (SOV), is essentially the concept of market share applied to media spend, and was especially useful in the pre-digital mass media. Les Binet, adam&eveDDB’s head of effectiveness, directed me to the fact that Unilever had pioneered the use of SOV as far back as the 1960s, although the company kept quiet about this at the time.
Source: Google NGram showing the rise in mentions in publications of ‘share of voice’ from the 50s
James Peckham at Nielsen brought all this out into the open in the early 70s, and then John Philip Jones made it famous with a big, multimarket study in the late 80s and early 90s. The key insight in all this work was that brands investing more in media than their market share implied were much more likely to grow their market share over the longer term.
Binet and Peter Field built on Jones’s findings, featuring it in 2007’s ‘Marketing in the era of accountability’ and later work. Binet told me he first explored using SOV for Volkswagen as early as 1993 and coined the term ‘excess share of voice’ or ESOV then, ESOV being the difference between a brand’s share of voice and its share of market. This concept was known to Unilever as ‘dynamic difference’, although Binet wasn’t aware of that work at the time. Binet and Field’s work established SOV as a core planning principle, especially useful for budget setting.
Source: Binet and Field, Media in focus: Marketing Effectiveness in the Digital Era, IPA
But SOVs pre-digital roots are now showing and it’s getting harder to calculate due to a lack of comprehensive and reliable data on brands’ digital media spend relative to competitors. Some even think the link between SOV and market share has now broken. It seems unlikely that the fundamental principle no longer holds true, but it does point to the need to think about effective share of voice, not just share of voice, when planning media.
Share of search: The ‘share of’ metric for the digital age
Share of search measures the proportion of online searches for a brand compared to the total searches in its category. It was popularised by Binet and James Hankins from around 2020, although people in the performance marketing and SEO worlds claim they’d been using a version of it for some time as part of their toolkit, they just hadn’t been shouting about it. Google and Kantar have shown that share of search is a proxy for a brand’s mental availability, and Binet and Hankins’ work with the IPA showed that in many categories it’s a leading indicator of market share.
Based on freely available Google Trends search data, it’s relatively easy and inexpensive to measure compared to traditional market research methods, and because various platforms and tools exist to monitor it, it has become standard for many brands to track.
All of which feels like a natural progression to the new kid on the block.
Share of model: The ‘share of’ metric for the GenAI age?
As with the earlier ‘share of’ metrics, the development of each being intrinsically linked to the emergent or dominant marketing technology of the day, share of model has arrived hand in hand with a new era in marketing and a newly available data source.
What the AI large language models (LLMs) ‘know’ in relation to brands is essentially the sum total of everything in their datasets about a brand, its touchpoints, its communications and, increasingly, the new content each model can find on what consumers think, feel and do in relation to it. All in one place, and all for free, or at least without the need for costly surveys and panels.
Marketing Week’s Mark Ritson noted the power of synthetic data for market research last year, after the publication in October 2022 of academic research suggesting LLMs could generate perceptual maps and brand attributes closely resembling human-generated data.
Plainly, any vast repository of data on a brand that’s essentially free will be interesting to marketers, and so the race has been on to find robust, stable, replicable ways of organising what LLMs know about brands that can be of use to marketers.
Enter share of model – defined here as the number of mentions of a brand by one or multiple LLMs, as a proportion of total mentions of brands in the same category. It essentially gives a picture of a brand’s overall ‘visibility’ to AI models and so to marketers. Tracking a brand’s mention rate as it shifts over time in relation to key competitors can make this practical and actionable.
But it’s not just about visibility, it can also be about brand positioning. At its simplest, brand positioning is about improving positive brand associations, reducing negative associations and distinguishing a brand on key associations where there’s an opportunity for relative differentiation.
Share of model could also help here. LLMs can generate clusters of positive and negative associations with brands and categories, and so we can use them to compare a brand with its competitors on those associations and track them over time. So the models can be a great source of brand positioning insight, as an input to help identify positive brand associations to build, negative associations to reduce and relative differences to further distinguish a brand, and as an output to track progress towards an ideal positioning.
So what next for share of model?
It’s too early to say if share of model will prove to have the universal utility that has been the key to the success of its ‘share of’ predecessors, and there’s a lot of work to do if it’s to become anywhere near as widely known and used.
Firstly, as with SOV, ESOV and share of search, establishing if there’s a relationship with share of market feels important. Do improvements in share of model reflect or even predict market share gains? Can changes in the communications approach impact share of model and share of specific brand associations? Can the insight generated help us produce new, more relevant creative content? How do we ensure creative gets the attention of its human audience in order to influence brand growth directly? How do we ensure content reaches its new ‘audience’ – the models – in order to influence it indirectly? All are questions we’re exploring at Jellyfish.
No doubt some brands and marketers will use this as a reason to open the floodgates to huge quantities of poor AI content of all kinds to try and ‘game’ the models, as in the early days of search engine marketing. Any new metric is likely to lead to some unintended consequences. Let’s do everything we can to avoid that.
Let’s hope people use this to help create better, longer-lasting, strategic communications with a higher goal – to drive share of market – not just to get a short-term boost for their share-of-model measure.
This is a version of a pair of articles that were first published in Marketing Week in June and July 2023 that started life as a talk for the IPA & WARC at Cannes Lions Festival of Creativity, ‘The 3rd Age of Effectiveness’.
Part 1 – brand building
There are still people in adland who would love to turn back time to a pre-digital age. Who make bold claims like ‘digital can’t build brands’, or ‘no brand has ever been built solely with social media’.
Of course, no brand is ever built solely with advertising of any kind, it’s just one of many levers to be used in combination. And advertising is only ever a weak, not a strong force anyway. You don’t have to believe online advertising can build brands alone – just that it can make a meaningful contribution.
There’s also a less extreme feeling, a lingering doubt, that I think may be shared by a bigger chunk of adland, that the platforms dominating global advertising today aren’t yet, and perhaps never will be, as good as the previously dominant channels at helping build our brands.
But beware golden ages, they’re always fantasies. Nostalgia’s an elephant trap for marketers – it won’t build our brands any more than neophilia will. We should prioritise the use of the tools that work today, not ones that worked much better yesterday or those that will only start working tomorrow.
Full disclosure. This is a personal perspective and one that’s bound to be influenced by what I’m learning in my role as VP Brand Strategy at Jellyfish, a connected media, creative, data and tech company that builds brands by finding smart ways to combine these elements.
Before I come onto some of the evidence for brand building being perfectly and increasingly possible using the platforms we have today, I want to touch on ‘why now?’. Why are we at an inflection point where the technology is maturing and increasingly being used for brand building alongside its longstanding role assisting short-term sales?
Battle of the platforms
A fundamental factor is good old-fashioned market forces and the ongoing battle for market share of global ad spend by the platforms. Google and Meta built an unprecedented share of global advertising spend over the last two decades, initially from dominating companies’ lower-funnel budgets and by making direct response advertising vastly more accessible to millions of small companies than it had ever been before.
Source: Joshua Benton, Nieman Lab, US data, 2022
That level of growth could never continue, and they’re now being squeezed by both the newer social platforms and the huge growth of retail ad networks. So they’re now looking to both defend their existing massive shares of lower funnel budgets and also grow their share of upper funnel budgets. Everyone’s looking to match TikTok’s success in short form video. They’re all increasingly pushing their platforms’ brand-building capabilities to grow their share of that piece of the pie.
The rise of video
The rise of the smartphone fuelled the explosion in digital video that’s enabling all this. Video now accounts for the vast majority of global internet traffic, around 80% by some estimates.
And where there’s video there’s brand building. Video is to brand building what water is to life on earth. More video content means more attention, more emotional impact, and sometimes a more personal and attentive viewing experience than on bigger, more public screens. All of which means more of the long-term brand memory encoding that’s needed to contribute to sales tomorrow, not just sales today. AKA brand building.
Google’s main weapon against TV is naturally YouTube. More YouTube content is being watched on the main large screen in a household than ever (around 33% of YouTube viewing in the UK happens on TVs, according to BARB, and 45% in the US, according to YouTube data).
YouTube videos are being made with ever-higher production values, so it’s great content to put ads in and around. It’s probably the most powerful of the digital platforms for brand-building still, given the number of seconds of attention its ads command. But TikTok’s closing in, and is also helping to accelerate the growth in the video-creator economy.
Meta had to play catch-up when it came to video, with video still responsible for only around 15% of all content viewed on Facebook at the time of writing. I suspect the proportion of time spent on a given platform watching video content is probably a crude measure of its potential as a brand-building channel.
In the case of Google, innovation is making its traditional search business more upper-funnel friendly. Google’s Performance Max product generates AI-assisted video and other brand assets that are more polished and consistent with a brand’s visual identity and tone of voice than ever. Improvements in the impact of brand-building advertising can happen through better integration through the funnel, not just by creating more impact at the top.
And, just as the first platforms made direct-response advertising more accessible to millions of small businesses, some of the tools of brand-building advertising are now increasingly available to businesses of all sizes. My teenage son’s first Saturday job involved making TikToks for the local trainer store, which regularly got hundreds of thousands of views and occasionally millions, and built up a followership amongst most of the sneakerheads in the area. A role for video advertising previously completely off limits to a tiny local store.
A brand-building counter-revolution
All this is being underpinned by a greater understanding than ever of how brand-building really works. I don’t think it’s a coincidence that several of the most important books on brand growth (including Binet & Field’s seminal ‘The Long and the Short of It’) were published during advertising’s digital revolution. I suspect the rise of the digital platforms inspired an intellectual fightback by the established marketing world in defence of what works to build brands over the long term, against a new world that was putting short-term digital tactics first.
Changes to privacy laws and Apple’s subsequent updates to its operating system also led to a renewed interest in brand building.
Privacy regulations affected the ability of adtech to capture data on users and use cookies to track them across the internet and apps. Some of the links in the chain that allowed a clear sight of the ads an individual is served and the things they buy broke. This made brand advertising, which rarely demands that level of granular understanding of its impact on an individual, relatively more attractive than previously, including to businesses who wouldn’t have considered doing something so ‘unaccountable’ before.
This led to the digital measurement world looking less to attribution and more to measurement techniques such as econometrics and geo-experiments – both better able to capture the impact of brand activity.
The performance plateau
Increasing numbers of brands, having once had a more performance-driven approach, have also got to a point where their lower-funnel activity reaches saturation, they reach a performance plateau, and they then try a more balanced full-funnel strategy. I’ve written about this previously so won’t go over that here – but the sheer number of brands experiencing this feels like it must be a factor in why more and more brands are turning to digital for brand building, not just performance.
Econometrician Grace Kite and the Advertising Research Community (ARC) produce meta-analyses of the econometric modelling of the impact of media on everyday brands and campaigns, not just effectiveness awards winners (which are the basis of Binet and Field’s research). This work has been helpful in understanding the optimum balance between online and offline ad spend. ARC’s conclusion in 2021 was that on average the optimum percentage to spend online was 40% to 50%
Various recent studies, including by ARC, have shown how many of the digital channels are equally capable of producing both short and long term effects, vital evidence to help end the view that digital advertising is just for triggering an immediate response.
According to econometrics company Analytics Partners, most digital channels are capable of contributing to the long as well as the short term. The importance of video for brand building is also evident in their analysis, the lasting impact of video channels typically being twice as long as non-video channels.
Brands built in digital
So what brands can we point to that have been built partly or solely using today’s platforms?
You have to be wary of placing too much emphasis on individual case studies, but Gymshark is a brand being ‘built in social’ with considerable creativity and marketing nous. Gymshark achieved profitability and unicorn status in a decade, and got there partly by growing a cult-like following in social media fuelled by influencer marketing. Too much has probably been written about Liquid Death already, but that brand’s mix of highly distinctive branding, impactful social-first communication, experiential and smart approach to distribution has proven to be a winning formula.
If we need more examples, there’s a fascinating and highly successful cohort of global SaaS brands such as Fiverr, Monday and Wix, which are often big YouTube advertisers, many of which continue to see success.
Are there bigger, more valuable brands and businesses out there that are less purely reliant on social or digital advertising? Yes. But it’s hard to imagine any of the world’s biggest brands not seeing digital advertising as an important part of their brand-building mix today, as well as of their sales activation mix.
Continued importance of brand equity
A discussion with Ipsos on the topic of ‘brand building in digital’ led to this question: given the massive shift in ad spend towards digital channels, if digital advertising were only about driving short-term sales, shouldn’t we have seen a big downward shift in the importance of brand equity as a driver of purchase decisions?
Well no, as it turns out. There’s actually been no decline in the importance of brand equity in the purchase decisions people make according to Ipsos’ ‘Brand Value Creator’, which suggests that “strength in the mind remains as important as ever as a driver of purchase decisions” – staying at the same level across its entire global database over the 2018-21 period as during 2013-15.
Ipsos data also suggests that ‘ease of buying’ as a factor in purchase decisions has grown over the same period, especially in online services categories, suggesting that whilst brands are still being built in the digital age, digital channels may also be creating greater opportunities to close the sale. Digital has been additive for marketing, not subtractive.
What marketers think
But what about the clients’ view of all this? What do marketers believe about brand-building in digital? Do they think digital has a lot of ground to catch up before it’s seen to be as useful as ‘traditional’ channels for brand building?
Actually Marketing Week’s ‘Language of Effectiveness’ survey of over 1,300 marketers suggests digital is far more mature for brand-building than others may believe. In fact a huge number, 86.7%, believe digital media is effective at brand-building, which is more than the 80.1% who believe offline media is effective at building brands.
So marketers are far more optimistic than any remaining adland sceptics, and their perspective is much more in line with the econometrics data.
All of which suggests brand building is absolutely possible in today’s platforms, and that many brands are achieving it already.
The nostalgics may have had a point – maybe we just weren’t very good at using digital to build brands initially. But over time we’re learning how to use the new tools and are getting better at it.
But could we get even better? Almost certainly, especially when it comes to creativity. And we’ll look at that more closely now.
Part 2 – Creativity
Major issues do still exist in terms of creativity in digital advertising, including short-termism, a legacy from when its principal or even sole role was the narrow targeting of hot in-market prospects. That meant brands missing out on driving more sustainable long-term growth by reaching new audiences, and left many brands on the performance plateau. It meant too many ads that are ignorable or even irritating to everyone apart from those ready to buy right now.
Brand building relies on reaching people who are not currently in the market and so requires a different creative approach. As they’re mostly not interested in you, you have to try much harder to get their attention and make a lasting impression, so that when the time comes, the little seeds you’ve sown in their synapses have a chance of doing their work.
And this leads us to the biggest issue we face if we’re going to get better at using the platforms to their full potential to help build our brands.
The attention problem
Karen Nelson-Field’s work on attention gave us the alarming headline that 85% of 130,000 digital ad views she researched didn’t achieve the 2.5 seconds or more of active attention necessary to impact longer-lasting brand memories and build mental availability.
Impact of attention time on mental availability (MA). Source: Amplified Intelligence
The theory is that ads under this threshold can basically only drive a click. Ads over it are able to influence future sales too. This is the essential difference between brand-building ads and direct-response ads. Karen Nelson-Field’s work suggests the more seconds of active attention an ad receives, the more days it can stay in the memory, and the longer it can work.
Another important finding from Nelson-Field is that a given platform has a set range or limit on the amount of attention people will pay to ads there – it’s the platform and format, not the creative, that makes the major contribution to the total number of attention seconds it will receive. Optimising your media plan for attention is becoming increasingly common.
But whilst platform and format choice determines the broad range of attention your ads can receive, it’s creativity that helps get you to the top of that range. “Attention elasticity forms the opportunity for ad creative,” says Nelson-Field. So good ads can get you somewhat more attention than bad ads on a given platform, albeit this will likely still be limited.
This is a challenging finding if, like me, you’d love to believe that the sheer force of human creativity can break through any boundaries and get everyone to watch every last second of everything you and the team have laboured over. The idealist in me still believes the finding must be wrong and wants every campaign to be an outlier; the realist in me has to admit this is extremely unlikely.
Whilst getting enough attention is a major challenge in digital advertising, it’s not a new one.
Ads of all kinds have always had surprisingly large drop-offs in attention. Data from measurement companies such as Lumen shows, for example, that magazine ads can have attention curves close to a YouTube non-skippable ad, and newspaper ads can have a steep retention curve akin to an in-feed Facebook ad. The difference is that we now have the data and are more aware of the drop-offs in digital ads than we’ve ever been before.
And it’s not a new issue for creative people to be wrestling with either. You can see it in the famous quotes of many of the ad legends of the 60s:
Bill Bernbach: “If your advertising goes unnoticed, everything else is academic.”
Mary Wells Lawrence: “People are very sophisticated about advertising now. You have to entertain them. You have to present a product honestly and with a tremendous amount of pizazz and flair. But you can’t run the same ad over and over again. You have to change your approach constantly to keep on getting their attention.”
John O’Toole: “[We’re] an uninvited guest in the living room of a prospect with the magical power to make you disappear instantly.”
O’Toole was talking about people flipping TV channels here, but could just as easily have been talking about ad skippability or scrollability today.
The issue of how to get and keep attention is one ad creators have always had. It’s not caused by ‘digital’ or by specific platforms, it’s caused by people not being as interested in ads as the stuff they’re actually there to see. And the solution is both simple and hard: creativity.
Platform best practices
But before applying that creativity you need to understand the dynamics of the platform you’re creating for. Why people are there, what they’re there to see, the ‘grammar’ of the stuff they like there. Only really knowing how things work on a platform, and knowing what the algorithms favour, can help you get more attention there and help you flatten the curve.
Adopting platform best practices prevents attention dropping off
And this takes time to learn. We’ve had 70 years to learn how to make TV ads, but only four or so years to make TikToks. Of course we’ve not perfected this yet and of course we’re only going to get better at it.
All the research evidence says you need to learn the ‘rules’ of each platform and create bespoke ads for them to be able to maximise attention on them. Kantar found that campaigns with ads tailored to specific digital channels have 13% greater impact on brand equity overall versus using the same ads on each platform.
Similarly, Ipsos found that the same creative often doesn’t perform well across formats. In their research, strong performing TV commercials didn’t translate well into skippable and in-feed environments, and ads developed for skippable formats performed pretty well in-feed but badly in TV.
A common finding from these studies is that you have to apply a platform’s ‘best practice’. This often includes the story structures that work best to get and keep attention. YouTube’s advice is to use ‘emerging story arcs’ not ‘traditional story arcs’. YouTube ads using new story arcs get four times the average watch time before being skipped – 20 seconds compared to five – and ads with traditional arcs are twice as likely to be bottom performers. This is similar to TikTok’s advice, which says you should start with a bang to hook people’s attention, not the ‘slow build’ of a TV commercial.
In an analysis by Kantar of 11,000 ads, applying YouTube’s best practice principles (attention, branding, connection, direction) was found to contribute +17% in long-term brand contribution. Similarly, bespoke Snap ads get 1.4 times the attention of ads repurposed from other platforms and bespoke TikTok ads get three seconds more watch time and 25% more completed views.
So definitely don’t just put your TV ad on the platforms. And don’t put your Facebook or YouTube ads on TV. But also, you can’t just put ads for one digital platform onto another one, and expect them to work as well as something bespoke.
One of my favourite findings comes from Ipsos: “Challenge category conventions. Taking an unconventional creative approach produces 40% longer viewing time on average for skippable ads.”
It’s exactly the same principle they’ve been teaching from day one at creative agencies for decades: it’s pure ‘when the world zigs, zag’.
Emotional impact
Another principle that’s coming out of recent studies, but isn’t always mentioned in the basic platform best practice, is the importance of emotion in driving brand impact.
System1’s studies of ads on Meta and Pinterest show ads that create a strong emotional response are much more likely to also drive brand awareness or brand lift. High-emotion ads on Pinterest drove six times as much brand lift as low-emotion ads for example.
When you look across these principles, they’re actually principles that Bernbach, Ogilvy and Wells Lawrence would recognise.
You need to know what works on a given platform, make ads bespoke for them following their technical advice, and ensure they deliver the holy trinity of attention, branding and communication. But as well as A, B and C, you also need D and E: difference and Emotion. So:
Get attention fast
Integrate brand/product
Use stories to communicate (and use new arcs)
Difference works best
Evoke intense emotion
None of these principles is ground-breaking, in fact they should be meat and drink to all creative advertising people.
And brands are learning. We’ve had years of people in the industry complaining that digital ads aren’t different, funny or surprising, but I’m seeing more evidence in my feeds of agencies and brands getting it right.
Tesco are clearly having fun and some success experimenting with TikTok, including with their #VoiceOfTheCheckout campaign.
Hilton Hotels’ 10-minute TikTok was genuinely great craft: a funny script that played with the grammar of the platform and a great performance from Paris. I doubt many people watched all 10 minutes, but then that’s not necessary for it to do its job.
Screenshot: Hilton’s 10-minute TikTok ad
And on top of this advice for paid ads, we now also have another really useful tactic. There’s a huge and growing army of creators who live or die by knowing what works best for their channels and their personal brands to retain viewer attention. And creator-led advertising is growing fast, reaching around $16bn in value globally last year.
Creators earn more attention
The best creators know how to make attention-grabbing thumbnails and opening shots; to deliver the promise of a video straight away; that music creates a feeling; that you need repeated emotional highs to keep people watching.
And when applied to brand creativity, their work can sometimes work even better than the professionals’. Platform-native creative made by creators on TikTok consistently outperforms repurposed or adapted ads in driving brand recall there, according to TikTok’s marketing science team. Influencer marketing can be easy to dismiss as hot people holding things. But when it’s creative people making things it becomes an entirely different proposition and much harder to dismiss.
Maybelline’s mascara TikTok was a joyfully silly PR stunt, with the quirky ‘is it real or fake’ intrigue of the Jacquemus handbags video from earlier in the year. You can argue about what it’s actually ‘saying’ about Maybelline. But if its job was to get attention for the brand in a distinctive way, it looks like a big success.
Screenshot: Maybelline’s computer-generated mascara video on TikTok
So this is the second creative opportunity: to break the attention curve and not just flatten it, with native content made by creators that can earn even more attention.
Which gives us two tactics: paid ads that are highly tailored to the platforms, and creator-made videos that are totally native to them.
All this has implications for budgets and consistency. You don’t want to stretch your communication too thinly across too many platforms, or end up doing one-off campaigns that don’t add up to a greater whole. You need to be as focused in your brand strategy as ever. You may have to use fewer platforms, but select them more deliberately. Some of these are media strategy questions, but plainly have an implication for creative: another argument for planning media and creative more closely together than has become the norm.
And once we’ve mastered the current crop of platforms, new ones will of course come along for us to get to grips with. And so the cycle continues.
This is a curated set of my Linkedin posts going back to late 2022. I’ve been posting more stuff there recently and of course not everyone’s on it so many won’t see them.
I think Linkedin’s great at showing us new stuff, but not so great at helping you find older stuff if you haven’t bookmarked it.
For longer, more in depth posts I’ll always publish them on my blog or as articles in Marketing Week.
But for Linkedin posts (which are naturally more bitesize) I’ll add new ones to the top of this post.
10.10.24 – CATHERINE KEHOE’S SPEECH AT THE IPA EFFECTIVENESS AWARDS DINNER
On Monday night at the IPA Effectiveness Awards, Catherine Kehoe, Chief Customer Officer of Nationwide, delivered what I can only describe as a sermon to modern day effectiveness, to a hushed room of hundreds of rarely silenced ad people.
Everyone should read the full text, link below. But this section chimed especially strongly with me:
‘We have entered a new era of marketing effectiveness, but still much of our thinking has been honed from the age of ‘air power’, that saw carpet bombing and surgical strikes managed from a central command post…
But this is going in reverse now. The growing weakness of TV as a mass reach and mass event medium is well documented…
And so, we are increasingly entering in a world of brands being built on the ground, by armies of influencers, by brand partnerships and collaborations, and by in-feed and in-game activations. Hand-to-hand marketing is replacing fire-and-forget…
And there’s no way any of us can keep up unless we work together.”
Here’s to this new era of marketing effectiveness.
Given the massive growth of LLMs, the fact that their training data mirrors how brands are thought of in the real world, and that they’re becoming places people turn to for recommendations…wouldn’t it be helpful if there was a simple, reliable way for marketers to understand how LLMs think about their brands?
So we built the Share of Model™ platform – to understand what AIs are saying about your brand. You can get a flavour of the platform and early access here: https://shareofmodel.ai/
Link to the original Marketing Week article about all this in the comments, including some history on some of the other ‘share ofs’ – share of market, share of voice, share of search.
25.8.24 – INVITATION TO MARK RITSON TO JUDGE THE APG CREATIVE STRATEGY AWARDS 2025
The great Mark Ritson recently wrote a brief but provocative post about hating the title ‘creative strategist’.
On behalf of the APG, the home of planners and strategists, this is an invitation for Mark to come and judge the APG’s Creative Strategy Awards 2025.
His post posed tough questions for anyone whose job is or includes creative strategy. It received 1000+ likes and a huge amount of agreement.
The essence of it was that the title is an oxymoron – that you can’t be both an expert strategist and an expert creative. Mark is rightly a purist when it comes to strategy. To him the title wrongly blurs the lines between two things which should be distinct.
APG members are a broad church and whilst most aren’t creative strategists by job title, many will see creative strategy as part of their role, and naturally the APG feels some responsibility to stand up for the value creative strategy has, especially the discipline and the process, perhaps more than the title.
Over the years I’ve been an account planner, brand planner, strategist, brand strategist. This job has a proud history going back to when two 70s legends, JWT’s Stephen King and BMP’s Stanley Pollitt, jointly invented account planning. The changing nature of the role, including its recent sub-variant creative strategy, tells a story of the evolution of advertising. All these titles are flawed.
And whilst I’m not a creative strategist by title, his post hit a nerve for me for three reasons.
First, many people who are planners or strategists like me, wear a ‘creative strategy’ hat part of the time. This part of the job is about working closely with creative people to help make impactful creative work that executes a brand’s marketing communications strategy. Is this strategy? Or creativity? It’s true the label doesn’t fit the proper delineation between strategy and execution.
Second, I work closely with some brilliant people called creative strategists at Jellyfish, strategically-minded creative thinkers who are experts in getting the best out of social platforms. I see the value they bring to our clients every day.
Third, because of the fantastic non-profit organisation the APG, whose committee I sit on, and whose Creative Strategy Awards I’m hugely proud to have been asked to chair in 2025.
We’re not going to try to persuade Mark it’s a perfect job title, but we would like him to see, read and discuss with us the very best of this thing called ‘creative strategy’ being done by people with all sorts of job titles across the world today.
All the APG asks is that you consider our invitation, Mark. Final round judging takes two days in London in July ’25. We’ll put aside any differences on the name, but would love to debate the merits of the work.
For a look at the winners from 2023, including the phenomenal Grand Prix winning ‘Raise your arches’ by Leo Burnett London for McDonald’s, visit https://lnkd.in/ef7uTXY9
21.6.24 – THE METRICS THAT MATTER, TO THE BOARD
Notes from my Cannes panel on getting the C-Suite to value creativity
There can be no creative marketing unless businesses will pay for it. That means getting decision-makers to value it.
Which means finding objective ways to measure it.
Cannes is a great reminder that creativity can be slippery, unpredictable, hard to define, highly subjective.
And that’s a challenge. Because the people we need to persuade to invest in it, prize objectivity above all.
They will only invest resources in things that will result in tangible, visible improvements in their businesses.
There was strong consensus around the contribution of brand creativity to commercial value today. Yes there’s work to be done persuading tech businesses on this, but the big ones get it – Amazon, Google, Apple. The brand era isn’t dead, Prof G.
The challenge now is less about proving brands and creativity can create value, and more about improving the value they create.
We’re in a 3rd age of effectiveness. Not purely brand, or an age myopically-obsessed with granular performance metrics. But an age when we win by combining long-term brand efforts with short-term performance efforts.
In this era, brands will get and stay big via a collection of smalls – simultaneously reaching and finding relevance with multiple audiences in a highly fragmented media ecosystem.
Platforms and algorithms are the new gatekeepers to success. Our creative work needs to be made both for people and algorithms to drive maximum impact.
But a gap has opened up between the small number of assets we’d ideally create and the vast quantity of assets the platforms demand that we create.
This all creates challenges in how we elevate the value of creativity to the C-Suite.
We now need creative metrics that scale – brands are deploying thousands of assets. It’s no longer enough to pre-test one execution and believe the score is representative of the value you’ll create. AI is our friend here.
We need metrics that can ensure our work is ‘fit for platform’, a fundamental driver of effectiveness today. CreativeX’s creative quality score (CQS) is used by both Diageo and Colgate-Palmolive to ensure they’re able to continuously improve their creative and its deployment in a way that’s easy to grasp and report in an objective way.
But ensuring fitness for platform is not enough.
We now need a true measure of creative excellence that can prove the added value we’re creating for brands. It needs to scale, be objective, and be a practical lever to help us make our work better. AI will be our friend here too.
That’s the next frontier in proving the value of creativity. Let us know if you think you’ve got the answer.
21.6.24 – PSA TO THE CLIENT COMMUNITY ON WRITING BETTER BRIEFS
This is a PSA from the agency world to everyone in the client community.
Cannes is done. Hundreds of awards have been handed out.
Whether there or not, whether inspired by the creativity on display, infuriated by it, unmoved by it, or even completely oblivious to it, everyone in marketing should be able to agree on this: we can all make better creative work.
Whether that means raising your floor or raising your ceiling.
But the start point isn’t on your agencies or your inhouse teams.
It’s on you. It has to start with your strategy and your brief.
The truth is, most briefs aren’t great. In fact most briefs aren’t briefs at all. Sometimes they’re just a call, or worse, just a WhatsApp.
Sometimes agencies are even expected to telepathically intuit that a brief even exists.
Whatever your situation or aspiration, we can all agree that we could do with better briefs.
Some friends have a startup aiming to help solve this problem and have spent a year developing a platform working with real clients.
Their mission is that everyone should be able to write a great brief. And they’ve built a self-serve platform, a sort of Grammarly for marketing briefs, to help.
I’ve had early access and think it looks quite cool. And they’re giving everyone 10 days free access to make it easy for everyone to try. (Apparently not yet optimised for mobile so if you want to sign up try it on a laptop).
Not everyone can get a Cannes Lion. But everyone can write better briefs.
[On re-publishing a slightly updated version of a 4-year old blog post]
Four years ago I published my first ever article on my brand new blog.
70k+ reads later it’s still my most popular post.
It was called ‘The Wrong and the Short of it’ and was a rallying cry for us to end the dumb division between brand and performance marketing and the false choice between long and short term marketing tactics. Someone commented that the marketing philosophy contained in it should be called ‘bothism’, a label which seems to have stuck.
I especially love it when it gets read and shared by people who weren’t previously familiar with the work of the big names in marketing effectiveness from the UK/Aus/NZ, especially US performance marketing people, and they develop a taste for the work of Binet & Field and others as a result.
My reason for re-publishing it and sharing it here is that the brilliant marketing author and illustrator Dan White has kindly created a new set of illustrations for it which have given it a nice new look.
So if you know marketers struggling with the limitations of short term tactics, with brands that are stuck on the performance plateau, or with leaderships who ‘don’t get brand’, who might benefit from reading this, please do pass it on.
Or please do drop me a line as I work at a company, Jellyfish, part of The Brandtech Group, which is uniquely set up to bridge a range of divides across marketing – whether that’s brand & performance, media & content, data & creativity, and marketing’s latest false dichotomy, GenAI & humanity.
7.6.24 – IPSOS REPORT ON USING TIKTOK THROUGH THE FUNNEL
[Commentary on new research report by Ipsos on TikTok]
Many brands are all over the place in terms of how their paid ads and organic content sit alongside each other. Brands need to get them working better together, remove the silos, and think ‘one social’.
Paid ads can get you reach, but tend to be less like what people are there to watch. Organic content fits better with what people want to watch, but is often inconsistent in terms of reach, or too poorly branded, to make an impact on the brand.
It’s why so much of the advertising effectiveness research suggests that ads and content need to be ‘fit for platform’ or ideally platform-native to start with.
You need to work out how to get the ‘best of both’.
So it’s interesting to see TikTok thinking about how paid and organic can work in harmony and be planned together better through the funnel (new report, link in comments).
[Commentary on new research report by Ipsos on TikTok]
Practices change, principles endure.
So it’s always fascinating to see platforms arrive on the scene and change advertising practice, but later embrace some of the fundamental principles of brand building as they mature as more rounded advertising platforms.
New report here from TikTok and Ipsos suggests they’re embracing some of the fundamentals – that brands grow by attracting new users; that you need to capture future demand, not just convert existing demand; that you need to build long-term brand memories by being consistently distinctive over time.
But also includes practical advice around tailoring content to platforms, combining the strengths of paid ads and organic content, and using organic as a playground to help you get your paid ads working more effectively.
And some useful case studies especially relevant for APAC teams.
Whenever one of Mark Ritson’s great MiniMBA in marketing courses is running, people I know who are on them send me messages pointing out that an article of mine is on the reading list.
Last week a couple of different people sent me this image. (I was actually a bit surprised as I thought Mark hated my piece on the sales funnel, as he thinks, as I also do actually, that in an ideal world you’d build your own bespoke funnel rather than using an off the shelf framework).
Anyway, the sheer number of people I now know who’ve taken his courses got me thinking that there’s recently been somewhat of a quiet revolution in marketing training, especially online, that’s gone mostly unremarked.
It’s long been an issue that unlike in other disciplines, marketers don’t get the professional training they need, and that this holds everyone back, stopping them from earning the respect they deserve.
But what hasn’t really been talked about much is the breadth of great courses now available that are helping solve the problem.
The huge success of Ritson’s courses opened the floodgates, and now many of the big names in marketing effectiveness have got their own courses.
Grace Kite & Magic Works on marketing effectiveness; Cannes Lions and 42 Courses have content from gurus like Rory Sutherland, Les Binet & Peter Field; James Hurman on ad effectiveness; John Hegarty on creativity; Scott Galloway on brand strategy (surprising for someone who thinks ‘the brand era is dead’).
All with the result that the marketing world is now especially well served if you or your team needs training in classic marketing strategy, brand marketing or ad effectiveness.
But marketing today is an incredibly broad church.
Like it or not (and I know many will say not), marketing has got phenomenally complex. There’s now a huge array of roles that are technical and specialist. And even people in non-technical roles need a broad understanding of a wide range of disciplines.
So whilst there’s loads of highly credible training out there covering the big strategic stuff, there still seems to be far less quality training out there on the specialist stuff – big and small – that’s needed to deliver it in practice.
Which brings me onto Jellyfish. When I arrived I couldn’t believe how different it is to the network agencies. And one of things that is most different, but is still fairly unknown, is that we’ve got a global training arm set up to train marketers (including our clients and partners at the major platforms too) in how to use pretty much every part of the modern marketing toolkit. (Link in comments if you want to check out the full range of courses available).
With all the great training now out there, it will be fascinating to see if over time this is going to help marketers earn the respect they deserve.
Wonderful conversation between two ad legends. So much wisdom here.
Especially good on the development of the famous Rowan Atkinson Barclaycard campaign. Including the brilliant ‘insight’ that led to that campaign that was ‘people quite like Rowan Atkinson and find him funny’.
It’s permission for anyone who ever feels pressure in their work to come up with a perfect insight in the form of a ‘revelatory truth’, that it probably isn’t necessary or worth the effort. But a reminder that understanding your audience always is.
So listen to this, subscribe to Dave Dye’s blog/cast ‘Stuff from the loft’, and read Paul’s books (both ‘Why does the peddlar sing?’ and ‘The anatomy of humbug’).
Do this not for the nostalgia but for what it can teach us about making better advertising today.
28.3.24 – THE IPA EFFECTIVENESS AWARDS – THE GOLD STANDARD BUT THEY MUST EXPLORE NEW FRONTIERS
The IPA Effectiveness Awards have been the gold standard in advertising effectiveness for over four decades. No advertising awards scheme comes close in terms of their value to the industry. But to maintain relevance it’s vital that it explores new frontiers, and doesn’t just reward the usual suspects. More on this in my WARC article below.
So am really proud to be an industry judge this year alongside my Jellyfish colleague Di Wu, VP of Data Science, who’s on the technical judging panel. As an actual ex-NASA scientist she knows a thing or two about new frontiers.
24.1.24 – GenAI isn’t marketing’s future, it’s already part of marketing’s present
Latest from me in Marketing Week is a rundown of some of the many ways GenAI and AI are changing the way we work in marketing today.
Includes a broad range of companies doing interesting things across segmentation, research, insights, briefing, strategy, creative development, production and measurement. (And the first outing for my digital twin, TomAI).
It’s three and a half years since Dr Grace Kite and I drew this chart to illustrate the typical life stages of online born businesses, and to show the benefits of combining brand building and performance activity to help them grow.
It was based on our experiences working with brands in many categories, including Grace’s econometric modelling work. It self-consciously built on Les Binet and Peter Field’s vastly more famous and influential illustration of the two ways marketing communications work. After we published it someone called it ‘The ramp & bump chart’ which has a nice ring to it.
We’ve both used it in various posts and articles, and people often say to us it resonates with their experience and that they’ve seen it play out in the real world for their brands.
I’d love to write something about all the real world examples of brands who’ve been on a similar journey, so could I ask you a question?
Has your brand followed this path? Is it now, or was it ever, stuck on the performance plateau? Is it now growing beyond it? Can you share more about what you did to make that happen? Maybe this chart even helped you get your brand growing again?
15.11.23 – 50% OF MEDIA BUDGETS GO BEHIND CREATIVE THAT ISN’T FIT FOR PLATFORM
50% of digital ad budgets go behind creative that isn’t fit for platform, say CreativeX.
Yes they would say that – they’re a data company using AI to help some of the world’s biggest brands score the creative quality of the assets they’re spending billions on.
But we all know there’s no point making beautiful ads if you’re not even getting the basics right. They say $bns are wasted from poor branding, framing, aspect ratios, length, subititling, missing messages.
We all see this kind of thing on our screens and in our feeds every day.
Getting this stuff right won’t have you jetting off to Cannes, but it will keep your CFO happy that you’re not hemorhaging cash without even knowing it.
13.11.23 – THE US ‘VS’ UK MARKETING EFFECTIVENESS DISCUSSION
There are brilliant US marketing teams and agencies using the predominantly UK/AUS/NZ theory to get to great marketing practice (McDonald’s always comes to mind first here).
But this is rare and marketing effectiveness practice lags behind there. Mark Ritson nails the issues below.
The standard answer to the problem you hear is ‘get Americans to read Binet & Field’. Much as I’d love this to happen, this answer falls at the first hurdle. US marketers and businesses want big, simple, aspirational, super-successful examples of the path to follow, not books to read, however much we believe they should read the classics.
So this is my brief to anyone who wants to help.
The Problem
Great marketing effectiveness practice and theory is massively under-penetrated in the US. The UK/AUS/NZ work of the last 10-15 years is failing to make an impact. The leading thinkers (Byron, Binet & Field, Ritson, Nelson-Field) are less known in the US. A radical new approach is needed.
Towards a solution
Just re-skinning the existing UK/AUS/NZ approach will not work.
The answer must be homegrown to the US, not imported.
It must speak the audience’s language.
It must be big, aspirational, impactful and commercial.
It could focus on the big numbers.
It must be heavy on action and how-to, light on theory and academia.
It must avoid the semantic debates and academic squabbles common here.
Any spokespeople or experts must be from the US.
It must look forward and fully embrace digital. No nostalgia.
It shouldn’t use the word ‘effectiveness’.
The Big Idea: ‘The Trillion Dollar Opportunity’
A massive, positive, aspirational rallying cry for the potential opportunity of doing better, more impactful brand marketing.
What this could look like
A Jeff Bezos keynote at Cannes on the Trillion Dollar Opportunity. He shares the greatest advertising U-turn story ever told. Taking Amazon from being a company that thought ads were a tax on a poor product, to Amazon being one of the world’s largest, best advertisers, and itself a major advertising business. He presents it with the evangelical zeal of the convert.
Scott Galloway or Kara Swisher interview Bezos. They present the simple case behind the ‘trillion dollar opportunity’, showing that if US/Global brands did better marketing they’d benefit from their share of the trillion dollars of growth they’re currently missing out on.
A multi-year programme of content. Fronted by US thinkers and speakers, big name CEOs and CMOs. Billionaires from specific categories present their own versions of the ‘Bezos’ story (tech brands in Silicon Valley, financial brands in NYC etc).
Could include a new Cannes awards category: The Trillion Dollar Lion for the biggest commercial turnarounds and practical application of marketing effectiveness. etc etc
19.10.23 – BRAND INVESTMENT ACTUALLY DOES MATTER TO THE CITY
Despite what people often think, brand and marketing investment actually does matter to analysts and the City, according to a new IPA/Brand Finance survey.
“Strength of brand/marketing” is the factor most frequently cited by analysts (at 79%) when asked how they appraise and analyse the companies they cover. This is cited ahead of leadership quality (76%) and technological innovation (72%)
Some useful charts in this for anyone involved in trying to convince brand and marketing sceptics of their importance.
I mean, what are the REAL questions and issues that you, marketers, are dealing with right now? The ones that really matter in the day to day, the issues you’re grappling with, the things that will actually impact whether you’ll meet your targets?
I’m fairly sure it won’t be whether to focus more on differentiation or distinctiveness, what new shape your diagram of the sales funnel should be, whether brand purpose is a load of marketing BS, or whether your ratio between brand:performance should be 60:40 or 65:35.
And yet those are the kinds of topics the marketing press seems to focus on most of the time. And I should know, as I’ve written about them all in Marketing Week and my blog (links for both in comments).
But I’m beginning to think the marketing press and blogs like mine don’t actually get into a lot of the real issues marketers face.
So I’m asking here if you could share your real questions and issues below.
With Twitter in decline as a place of genuine discussion, debate and community in our industry, maybe this place could begin to replace it. Maybe people on here will be able to reply with an answer or point you in the direction you need to start to answer your question. Maybe your question will spark a new article from me (this would actually be helpful as I’ve had a bit of writer’s block recently). Or maybe our great strategy team at Jellyfish might be able to help – we’ve got a breadth and diversity of expertise spanning every possible aspect of digital marketing here that we might be able to connect you to.
So tell me, what’s your problem?
17.08.23 – LET’S MAKE BETTER ADS
Here’s a simple but important reason for us all to want to make better advertising: it helps make our industry appealing to the next generation.
Ads have changed out of all recognition since this 1986 classic. But it’s the one that made me think ads were interesting, could be intelligent, worth talking about, and that making them could be something to look into as a job about 12 years later.
There’s never been more advertising, but it’s never been more invisible.
We’ve never had smarter technology to make it with, but ads have never been dumber.
The world is over-supplied with ‘content’, and this is as true of the marketing world as any other. So when I write stuff I’m really conscious of not adding too much to the internet’s infinite content shelf (or its infinite content bin depending on your point of view). Most years I add about 10,000-12,000 words to it, in about 5-6 posts and articles.
2021 was about new beginnings at Jellyfish, reviewing the ubiquitous sales funnel, and why what won’t change is just as important as what will.
2022’s batch was about why advertising will never die, why ROAS is a problem, and how to help brands get off the Performance Plateau.
This article was first published in July 2020. It seemed to strike a chord, and people on the frontlines of modern marketing tell me it’s been helpful. It remains my most read article. I especially love it when it gets shared by people who weren’t previously familiar with the work of the big names in marketing effectiveness from the UK/Aus/NZ, especially US performance marketing people. So if you know marketers struggling with the limitations of short term tactics, with brands that are stuck on the performance plateau, or with leaderships who ‘don’t get brand’, who might benefit from reading this, please do pass it on.
I was inspired to publish this slightly updated version, after the marketing author and illustrator Dan White sent me a brilliant new set of illustrations he’d done of all the charts in the original.
Short-termism and long-termism are both just wrong-termism. So let’s end the false choice between long and short-term marketing tactics, maximise the compound effects of getting them working together in harmony, and close the value-destroying divide between ‘brand’ and ‘performance’ marketing, which limits marketing effectiveness and growth.
Long term ‘VS’ short term is probably the most commonly cited false choice in marketing.
And that’s saying something, as we love false dichotomies in this industry: brand vs performance, emotional vs rational, creativity vs technology, intuition vs data, art vs science, to name just a few that we constantly debate.
And of course the answer to most of these is ‘&’ not ‘or’.
It may seem a little unnecessary for yet more to be written about the long and short-term in marketing given two industry legends have literally already written the book on it [i]. But whilst the theory says we should all try to achieve a balanced approach in order to maximise both saleability and sales simultaneously, there’s still a massive gulf between the theory and actual practice, which is too often divided between practitioners of brand and performance marketing.
And it’s even quite common for people to overlook the central importance of the theme of balance in Binet & Field’s most important work, and to think of them as ‘the high priests of the long term’.
SHORT-TERMISM
Short-termism rightly gets a lot of criticism, and there have been plenty of brilliant critiques of it by other people, so I won’t do that here [ii].
There are irresistible pressures pulling marketers towards the short term [iii]. And there’s also a huge asymmetry in terms of accessibility to performance channels vs brand-building channels. Google, Facebook, Amazon and other platforms have given millions of businesses of every size and type, easy, self-service access to a giant direct response advertising eco-system. And this universal accessibility is also ensuring there’s a ready and growing supply of ‘performance’ marketing specialists and a dwindling supply of ‘brand’ marketing specialists – a factor that further exacerbates the divide.
LONG-TERMISM
Too many people though, especially on the ‘brand’ side of the divide, also wrongly assume that because short-termism’s a bad thing, long-termism must therefore be a good thing, despite the potential for it to be just as damaging in different ways.
There’s always been a lot of magical thinking about the long term in advertising. That you can just do something big and expensive as a one-off, then close your eyes and cross your fingers and hope no one commercially-oriented asks any awkward questions for six to twelve months, until future sales start magically happening.
But communications that are successful over the long term don’t work by activating some kind of ‘sleeper cell’ in buyers’ minds which suddenly bursts into frenzied commercial action after many months of lying completely dormant – communications need to achieve some level of short-term sales success as well as improving a brand’s mental availability if they’re also going to achieve long-term growth.
And whilst short-termism may give people a bad name within certain corners of the marketing world, it may actually be long-termism that gives some marketers a bad name within their organisations and amongst the rest of the business community, perhaps because some marketers appear to act like selling’s a dirty word to them (for example by getting evangelical about certain marketing approaches that appear purposefully designed not to sell stuff).
WRONG-TERMISM
And whilst they’re quite different, it’s possible to simultaneously see short-termism and long-termism as equally bad practice – wrong-termism, if you will.
Wrong-termists get it wrong in two different ways: short-termists restrict the long-term growth their marketing can achieve, and long-termists restrict its short-term sales impact.
THE LONG THROUGH THE SHORT OF IT
Marketers have never been under more pressure to make every marketing $ work as hard as it possibly can. We’ve never been more aware that without short-term success there may not even be a long-term for some of our brands. And the best way of securing both will be to embrace the fertile middle-ground that lies in combining the power of short and long-term effects.
Long-term growth always has its roots in the short term. The two are connected, influence each other, and if you get the two working perfectly in harmony together, you’ll achieve the strongest, most sustainable growth possible.
But we so often miss out on maximising growth in this way because of our binary belief systems, the organisational silos we inhabit, the different job titles we have, the different channels and formats we tend to use and the different metrics we try to optimise.
It’s important to say that long-term growth isn’t just achieved by adding up a series of short-term effects. It’s more complicated than simply being additive: it’s a multiplicative, compound effect, which starts slowly but strengthens over time.
And whilst all long-term growth actually has roots in the short term, only some kinds of short-term activity also lead to long-term results.
So the roots of long-term growth are there in the present if you do the right kind of marketing communications.
The two are always happening simultaneously, to some degree, in the same marketing campaign and in everything a brand communicates about itself. Les Binet’s chart below shows two kinds of sales impacts from a single exposure to a single execution. A short-term sales spike and a longer-term tail.
The two lines are interrelated. If you try to push the red spike higher, you’ll reduce the length of the black tail (e.g. a promotion or offer would push the red spike higher but massively reduce the black tail). Which means to achieve equilibrium you’ll need a balance across a campaign and across your entire marketing plan (although not necessarily within an individual execution).
It’s practically the law that any discussion of the long and short-term in marketing must include Binet & Field’s classic ‘steps’ chart illustrating the two different ways in which communications can drive sales – through short-term sales activation and long-term brand-building, so here it is:
And what follows are some illustrations by Les Binet that build on this, but this time rather than separating the short and long-term effects, they show the combined effects of doing ‘brand building’ and ‘sales activation’ together in different combinations. They’re just theoretical, they knowingly exaggerate the effects for clarity, and there will of course be real world exceptions.
Scenario 1 is what could happen if a brand that had been heavily biased towards sales activation shifts its balance in favour of brand-building activity (Binet & Field suggest a balance of 60:40 is a good rule of thumb – not a fixed ratio but a good place to aim at if you’ve got no data yet on what works best for your brand). It could see lower initial short-term sales peaks, but base sales would begin to rise and the short-term sales peaks could start rising too as the strengthening brand helps improve the impact of sales activation.
Scenario 2 shows what could happen if that brand switched back to being heavily biased towards sales activation from a more balanced plan. Short-term sales peaks could get lower and base sales could drop over time. It’s a cautionary tale that you may have witnessed, for example with the arrival of a new CEO or CMO who ‘doesn’t believe in doing brand marketing’.
But charts like these don’t always totally reflect the real world options available to modern marketers, for example where performance activity is usually ‘always on’ rather than pulsed, and where the idea of scaling it back dramatically or even switching it off could feel like instant career suicide.
So below is an illustration by econometrician Grace Kite and me building on the classic ‘steps’ chart from the perspective of a common real world scenario, that of a digital-first brand whose initial strong growth from always on performance activity has levelled off, after which point brand-building activity is successfully deployed in order to take growth to the next level. It’s based on the econometric modelling Grace has done for a wide range of brands facing similar challenges.
It shows growth initially being driven by always on activity in performance channels, and the impact of that activity reaching a plateau which often happens when saturation point is reached. Then it shows the impact of a successful decision to layer in ‘brand-building’ activity. Note that this brand activity both delivers its own short and longer-term sales impacts, as well as improving the sales generated by performance channels. It also shows the compound effects of all this marketing activity working together and becoming stronger over time as the brand-building activity is further optimised.
‘All models are wrong, but some are useful’ of course, but hopefully this shows performance-first brands the growth potential of adopting a more balanced approach that includes layering in brand-building activity, and gives brands like these a little more confidence when taking the big step into doing ‘brand-building’ communication.
A PROMISING METRIC FOR MEASURING THE LONG THROUGH THE SHORT?
The long-term growth potential of campaigns should be measurable in the short-term, even if you’re not currently set up to monitor it. So you may need to start thinking about boosting your existing measurement (which would ideally already include a balanced scorecard of long and short-term metrics), with new kinds of short-term measures that can also predict long-term performance.
One metric that’s proving useful for this is share of search. Millward Brown (now Kantar) have seen that search volumes can strongly reflect how salient or famous a brand is [iv]. Google believe share of search reflects brand health and market share for brands in some categories [v].
Les Binet and James Hankins have done some great work looking at whether a brand’s share of google search can predict its market share, and have found this to be true in a wide range of categories.
Since the original version of this article was first published in 2020, share of search has become more widely known and monitoring it has become reasonably common.
I especially like it as it’s a rare example of a metric that crosses the brand / performance divide and so can connect marketers across it. Brand people instinctively know that brand search behaviour will be reflective of a brand’s fame and mental availability, and know that investing in high reach communication can be an effective way to improve it. And performance marketers of course know brand search is a hugely important source of traffic and conversion.
I believe it’s never been more important that we close the artificial divide between brand and performance marketing, and to do what’s most effective for our brands collectively.
For some brands, overcoming the barriers to this will be a big task, but if anything here helps a single team start to do this in their business that’s a win.
Brands should be aiming to create long-term communications engineered for immediate success. Advertising that, in the words of the great Jeremy Bullmore, sells ‘both immediately and forever’ [vi].
If you know marketers struggling with the limitations of short term tactics, with brands that are stuck on the performance plateau, or with leaderships who ‘don’t get brand’, who might benefit from reading this, please do pass it on.
Or drop me a line, as Jellyfish, part of The Brandtech Group, is uniquely set up to bridge a range of common divides across marketing – whether that’s brand & performance, media & content, data & creativity, and marketing’s latest false dichotomy, GenAI & humanity.
This is a call to arms for strategy people to join the new Account Planning Group AI Working Group, that aims to get the best from the technology for the planning and strategy community and help shape a positive future for the discipline.
Paper was the future once. But then so was Betamax. Some technologies change the world. Many disappear without trace.
But whether something becomes the future and changes our lives forever is mostly out of our hands. For most of us the future is something that’s done to us, not done by us.
We don’t get much of a say in which new technologies will explode and which will fizzle. That’s the combined effect of billions of decisions by engineers, entrepreneurs, investors, early and then late adopters.
Then add to this the swirl of the hype cycle with its cheerleaders, opportunists, profiteers, and its prophets of doom, all adding to the excitement and the confusion.
But most of us don’t really get a say in this process. We get swept up, dropped down, have our lives changed (or not). We just get left to carry on with things once the circus has packed up, left town and found a new shiny thing to be excited by.
But on those occasions when something does change everything, it’s the silent majority who will have our lives, and our working lives, changed.
And this time, once again, we’re sitting in front of a future that could be changed dramatically. GenAI seems to be leading to a new set of tools that are being adopted faster than many recent technologies by our industry. It’s not just changing marketing in some theoretical future, it seems to be changing marketing’s day-to-day practice.
People are using it to build segmentation studies, create research panels, gather and analyse consumer insight. They’re building tools to help them write strategies and marketing briefs. To generate brand positionings, strategic concepts and to generate ads. See my recent Marketing Week article here: https://www.marketingweek.com/generative-ai-isnt-marketings-future-its-already-part-of-its-present/
So it’s starting to change things in our day-to-day work. And it seems to be doing so largely by helping people do some of their more repetitive work faster, helping save time and money.
Whether it’s being used quite as much to help people do things that are loads better is less clear – more actionable insight, more intelligent strategies, more impactful creative, more effective, and not just more efficient, marketing. And if that‘s the future we want we’re going to need to take it into our own hands.
How all this will impact our working lives is impossible to know. It’s going to be a cause for excitement and opportunity for some, uncertainty and anxiety for others, and probably a mix of both for most. Many will have a sense that there is this ‘thing’ happening to them, that is racing ahead, out of control, causing them both excitement but also anxiety about the future.
This is where the APG comes in. We’re setting up an AI working group to help shape the future of Gen AI and AI for planners and strategists, to work through the consequences and opportunities, and harness the excitement but also help to alleviate some of the uncertainty.
The group will seek to calibrate progress and understand what’s going on across our community, and feed back their thinking and findings so that it benefits planners and strategists at large. To help make sure brand strategists feel they can shape GenAI in their roles, not have GenAI shape them.
We’re going to gather people from across the planning and strategy community – enthusiasts and sceptics, experts and newbies. We’ll listen to startups, watch demos and review tools. We’re thinking of running a day where all the strategy AI startups out there will get 5mins to pitch their tools to us. We’re going to research the hopes, fears, wants and needs of our community. And will endeavour to report back with actionable insights and helpful recommendations. We’ll meet regularly and keep going until the impact of GenAI on planners and strategists has become clear and there’s no longer a role for us.
As chair of this new working group this is a call for people to get involved and work together in a spirit of competitive collaboration. If you’d like to play a role in it, we’d love to hear from you. This group must not be a monoculture of techbros, fanbois and thinkbois. To work this must be a diverse group.
Whilst the output will mainly be for the small advertising planning and strategy community we hope there will be useful learnings for everyone across the wider marketing world. And maybe inspire other parts of the industry to lead similar initiatives to help people navigate the change, both positive and negative, as all change always is.
And if you’d like to share your own hopes and fears about GenAI and AI for marketing/brand/creative strategy, you can do so using this new AI research tool, Voop, which will be collating and analysing the responses. Clink the link or use the QR code to leave a voice or text response to one simple question: https://beta.voop.ai/feedback/channel/C-gvog-947g-eeqd
A few words from the final judging room at the APG Creative Strategy Awards 2023.
I spent two days this week with a group of amazing people, hearing 26 presentations from some incredibly talented strategists. Each presentation skilfully condensed a 2000-3000 word case study into just 5 very short minutes. These were the shortlisted entries into the APG Creative Strategy Awards, the top 20% of a record-breaking set of entries they received this year.
The APG Awards is about demonstrating the value of strategy and planning in the advertising industry. If the IPA Effectiveness Awards is about proving the value of advertising, the APG Creative Strategy Awards is their more creative, less data-obsessed sibling, whose role is to prove the value of strategy in the creative industries.
It was an honour to play a small part at the end of a rigorous process. It made us jurors think a lot about what a great strategy is and what makes a great strategist. About how great strategies, insights and ideas are born. About how they get sold, protected, kept alive, executed and measured. About how personal, passionate, and emotional the best strategies were.
Strategy is about ideas. A creative strategy has to be expressible in a simple line to really make an impact.
And it was really clear across the two days that great creative strategy is powered by an individual with passion and energy. Yes, of course we work in teams, but all of the best work we saw was advocated and championed passionately by someone who clearly loved it and pushed it through their agency and the client organisation. Good ideas are easy to dismiss and kill, and great ones are uncomfortable, different and are often surprisingly specific and unusual. They need passion and advocacy to survive.
A lot is written about advertising strategy. But it’s too often about the theory, frameworks, platforms and data. (I’m aware I’m as responsible for that as anyone else). But weirdly one of the things that’s written about less is the actual strategies themselves.
So I reckon the best way to make the point I want to make, which is just that strategy is still alive and well, is just to share, as simply as possible, the brilliant strategies we heard.
We heard about how:
A football game went deep, not broad, to help British South Asian representation.
A Taiwanese drink sponsored a pilgrimage to take it on a journey from sports to sweat brand.
A retailer transformed how menopause is perceived by normalising it not sensationalising it.
A small car brand got bigger by narrowing its focus to dog owners.
A charity showed that suicide doesn’t look suicidal.
A holiday camp transformed itself into an entertainment brand.
A mobile network became a customer champion against rising prices.
A healthcare brand broke the taboo that sex is just for the young.
A yoghurt brand heightened anticipation by saying nothing at all.
A counselling service used humour to get older people to take STIs seriously.
A biscuit brand drove salience by teaching people British Sign Language.
A software brand invented a new C-Suite role to reinvent the future of the workplace.
A cancer support charity stuck out by showing its nurses are angels with sharp elbows.
A dog treat brand drove new sales with good old-fashioned advertising.
A city enlisted men to help tackle violence against women by showing it can start with words.
A life insurance brand reframed itself as a death insurance brand.
A sanitary brand helped reduce period poverty by making people angry.
A plant-based spread depositioned butter by making it seem weird.
A ‘f*** it’ moment made us all fancy a burger.
A sports event started the largest ever human rights movement for people with disabilities.
An army embraced strategic rigidity but tactical flexibility to drive recruitment.
A confectionery brand dropped its most distinctive asset for Pride.
A fast food brand discovered a big role at Christmas with its smallest product.
A tea brand climbed to no.1 with a proper long-term brand platform.
Another fast food brand redefined its brand world and rediscovered its voice.
A serious haemorrhoids remedy found its tone of voice in humorous Amazon reviews.
Everyone will be able to enjoy the full brilliance of these strategies when they’re published in the APG’s Strategy Awards book, at https://www.apg.org.uk/thinktank-homepage and on WARC.com once the winners are announced on 28th September.
Reading these will give everyone in the industry their own sense of what strategy is or should be.
For me, reading the papers, listening to the presentations, questioning the authors, and discussing them with the jury told me the following.
Strategy is:
more imagination than process more personal than corporate more progressive than conservative more emotional than logical more creative than we strategists ever usually admit.
What is it, why are you stuck on it, how are you going to get off it?
It’s become common for brands with a performance mindset, to hit a growth plateau. Let’s call it the ‘performance plateau’. If you think you may have hit it, you’re far from alone. From the number of companies I’ve seen grappling with the issue in recent years (and long before talk of recession), it seems to be endemic in marketing today. And it’s not just SMEs and scaleups, even big names can be affected.
It’s a problem that seems to have its roots in the performance-oriented mindset of the millions of SMEs who make up the bulk of today’s advertisers, and the continuation of that mindset well past the point when their scale suggests they should have adopted a more balanced marketing approach.
TL;DR: what got you where you are now, won’t get you where you want to go.
What is it?
It’s about brands getting to a point where the success of their traditional mix of search, social and display advertising levels off, leaving them looking around for new ways to grow.
The story often goes a bit like this…
A brand’s initial growth has stalled. Customer acquisition costs are higher than ever, previously good return on ad spend (ROAS) has fallen. Everything’s become inefficient and more efficient ad buys are harder to come by. You’re not sure where new customers are going to come from. Everything you thought worked doesn’t seem to work so well any more. A previously direct link between advertising and growth seems to have been weakened. All the low-hanging fruit seems to have been picked.
Within the marketing team nervousness is setting in, and beyond it founders and investors are starting to question everything.
“We used to be able to put £1 in and get £1.70 back. That’s just not happening any more. At best we have to put £1.50 in for the same return but investors are starting to ask tough questions about where growth is going to come from,” an anonymous founder told me.
The performance plateau seems to be something you have to go through these days to make the transition to maturity as a marketing organisation. It’s like working through the gears on a bike: you’re no longer able to pedal faster in a lower gear so you’re going to need to invest more effort in higher gears to start accelerating.
Econometrician Dr Grace Kite’s work had been pointing to this as an issue for performance-driven brands, and the chart below, based on her econometric modelling for a wide range of digital-first brands, was created by us to capture this moment and describe the benefits that can come later once a more balanced approach is deployed.
When presenting this chart we’ve both seen just how much the plateau resonates with marketers. On the chart it looks placid, but in reality it can feel existential.
Who’s affected?
Over the last year I’ve spoken to around a dozen brands in this situation. Businesses of different sizes, both B2C and B2B. They include a weight loss app, a B2B data viz platform, a buy now, pay later payment brand, a major US D2C mattress brand, and a mobile gaming platform. At a conference for FMCG brands recently, who Grace and I were presenting to, when Grace asked if they’d experienced this, around 80% of people’s arms shot up. So if you’re experiencing it too you’re not alone.
And it’s not just small- and medium-sized brands who can find themselves on the performance plateau. Even huge brands who’ve taken some wrong turns can also find themselves on it.
Recently we’ve seen Airbnb and Asos admit to a chronic over-reliance on performance and a subsequent shift in balance towards brand-building activity as they look to put an era of sluggish growth behind them. Of course, this won’t have been the only cause of their problems, but it doesn’t invalidate the point.
I know from personal experience there were many people who tried to persuade Asos of the dangers of their approach. Many others will have similar cautionary tales from other businesses.
Regardless of the economic environment right now, there’s definitely a common thread: a brand has success with performance marketing, doubles down on it, but later realises it wasn’t helping them achieve long-term growth, and belatedly course-corrects to a more balanced approach.
Why it happens
What happens is that the platforms are great at helping brands optimise their direct response advertising, but once spend is maxed out on them, brands are far from ready to make the transition to taking a more balanced ‘full-funnel’ approach.
Performance-oriented brands can lack the skills, experience, people and partners needed to take them to the next level. Essentially there’s friction in the system that creates massive delays in brands’ ability to recognise they have an issue, and get themselves geared up to kickstart their growth again.
Getting beyond the plateau
Every brand of course needs its own bespoke growth strategy. No article can tell you how to develop one, but it can point to what connects brands that have successfully navigated this moment.
It often includes developing a new philosophy about how marketing and advertising work to grow brands; a new growth model defining how it will work for your brand; new people and maybe new partners; new measurement and metrics.
That’s a lot of new stuff to learn and do, which may explain why the plateau can last a long time. So here are some key things for brands to think about as they plot their new path.
1. Unlearn what you know
The first major thing that connects the brands that get off the plateau is that they go through a period of introspection and analysis, unlearning and learning, about how brands grow and how marketing and communications work. This has to be something the whole team goes through together with a brand’s leadership: this will all be pointless if your leadership isn’t on the journey.
This is probably the hardest step as it will involve challenging people’s existing views. There’s a considerable body of knowledge out there on this, built up over decades, that can help. Mark Ritson’s Mini MBA covers much of it. Here’s an article from the reading list on the topic of ‘bothism’ that seems to help brands at this point: The wrong and the short of it. And this is Grace Kite’s typically practical, real-world take on the topic.
Performance-oriented people can tend to be quite left-brained in their worldview. Theirs is a world where you put X in knowing you will get Y out. A world where everything can be tested and the correct answer is known instantly. But where you’re going things don’t quite work like that. You’ll need to get comfortable with a greater level of ambiguity, with irrational consumers, qualitative research, the huge variation of effects from different creative campaigns. Where you’re going you’ll need balance: of data and judgement, technology and creativity, art and science, long and short. You won’t get off the performance plateau armed with spreadsheets alone.
2. Know your (growth) audience
Digital-first brands, and D2C brands in particular, often believe they know their audiences inside out. But owning the data on what existing customers do on your digital real estate isn’t going to be enough. You’re going to need to really understand all category buyers, and especially non-users and very light users of your brand who are going to be disproportionately important to you now.
Get to know the people who couldn’t care less about you just as well as those who love you, and work out what you need to do to attract them. Chances are you’ll discover it’s got a lot to do with not being known by them, not being thought of in the right moments, your brand not being associated with the right things. Understanding your growth audience inside out is fundamental to your positioning, and will be essential to unlocking your next phase of growth.
3. The importance of reach
One of the most common data-points that helps brands off the performance plateau is the LinkedIn B2B Institute’s ‘95:5 rule’, which suggests roughly 95% of category buyers are not in-market at a given time (this is an average for B2B brands; B2C brands will likely have a similar but less stark ratio). Working this out for your brand can help you learn how important the ‘upper funnel’ is to your brand, and just how little most people will be thinking about a category or brand at any point. It’s a simple but powerful tool in helping brands understand the need to achieve much broader reach.
Meta has been preaching reach over tight targeting for some time now, and has good evidence that achieving greater reach among category buyers drives growth. In a meta-analysis by Meta of 40 ‘conversion lift studies’ it saw an 87% correlation between the size of the audience reached and the volume of incremental purchases.
But reach is expensive right? Not necessarily. New data from Meta aimed at performance advertisers shows the impact of adding ‘reach’ campaigns to the mix: it claims you can double reach for only 36% greater spend, and that adding reach as an objective can drive an 84% organic search lift versus performance campaigns alone. And most importantly that adding reach to Meta performance campaigns can deliver 18% more incremental sales than performance campaigns alone.
4. Build a growth model
At the IPA Effworks conference recently, Gousto CMO Tom Wallis presented their ‘journey from performance to brand’. Gousto never got stuck on the performance plateau in the first place: it made the leap before that could happen.
They’d seen some classic signs that the time was right to transition from performance to brand, including low brand awareness, low share of voice and low market share in a competitive mass market category, and a maximised performance spend versus a major growth opportunity.
The tipping point for them came in 2017, when 100% of adspend was on performance and 0% was on brand, and 80% of their customer acquisition was from paid ads, but only 20% was organic. Gousto was too reliant on ads: switch them off and sales would mostly stop.
Gousto developed a simple performance model illustrating how brand activity would create a ‘demand pool’ of future potential customers.
They ended up optimising their plan to a balance of 60% brand and 40% performance (the data took them there, they weren’t aiming to mirror Binet & Field’s rule of thumb), and by 2020 75% of Gousto’s customer acquisition was organic and only 25% was from paid ads. Layering in brand advertising had created a large reservoir of future customers and a more reliable source of future revenue.
If you’re too reliant on paid ads, then you need to develop your base sales. To do that you’re going to need to build a stronger brand. A stronger brand will mean stronger residual awareness, familiarity and understanding of what you offer that can generate future cashflow. A brand isn’t a luxury, it’s future cashflow.
5. Get the best of both
At this point many brands think that adding upper funnel activity just means adding TV (or CTV) to their digital media. TV has always been the long and short channel par excellence so it’s not a terrible assumption to make.
But some excellent new research exploring the power of digital channels to drive both short- and long-term ROI suggests many digital channels are also able to deliver both.
Meta’s long-term MMM study by Nepa shows (for a set of six retail and telco brands in the Nordics) that a variety of digital channels can deliver both short- and long-term growth so could be part of a balanced plan. TV may well prove to be a useful part of your mix but ask a media strategist. Don’t start by assuming that’s the case.
It’s about much more than advertising
Getting beyond the performance plateau takes a lot.
Leadership, vision, culture, the right team and structure. Training, education, expertise and experience. Aligned KPIs and incentives. Ideally brands would avoid creating a performance marketing culture in the first place and instead aim to build a marketing performance culture.
It’s not easy and it’s going to take time, a resource that may be in short supply if you do find yourself on the plateau right now.
For some, sadly, it will be too late to fix the roof given the sun has stopped shining. For many others though, it could still be a good time to strengthen the foundations.
[First published in Marketing Week 12th October 2022]
Too great a focus on return on ad spend (ROAS) is leading to short-term thinking and under-investment, which in turn is stifling growth, and it has the potential to be far more damaging than ROI.
People have been warning about the potential problems with ROI for years. But its digital twin, ROAS (return on ad spend), might actually be doing more damage today. In fact you could call ROI and ROAS allies in marketing’s anti-growth coalition.
If ROI’s dangers can seem quite theoretical, ROAS’s dangers, while similar, are actually a day-to-day reality in significant parts of the digital marketing world.
Before turning to ROAS, let’s quickly recap the core issues it shares with ROI.
ROI’s issues in brief
ROI tends to inversely correlate with profit growth, as due to diminishing returns ROI decreases as you spend more, and increases as you spend less. So the easiest way to increase your ROI is to decrease your media spend. Focusing on increasing ROI would therefore limit growth or even “send you broke” as Byron Sharp says.
Instead you should prioritise the incremental profit or revenue you achieve. ROI is not actually a measure of effectiveness but how efficiently you achieved it. So don’t use ROI as a target, use it to help you check the value for money you’re getting for your media investments. As Les Binet likes to say: “Effectiveness first, efficiency second – net contribution to value first. ROI is a useful metric but not the only one.”
The above is well known to some, but if people need a refresher take a read of my latest blog post ‘Marketing’s most marmite metric‘, or Tim Ambler’s coruscating article from 2004, ‘ROI is dead: now bury it’, a classic that should still be essential reading for marketers and finance people 18 years on.
Despite Ambler’s article, ROI lives on and never was buried. In fact, around the same time he was digging its grave, it actually spawned a new offspring for the digital age which shares the above problems and more besides: ROAS.
So what is ROAS?
ROAS is in very common use by many digital marketers as a buying objective in the real-time optimisation of performance activity across a range of platforms and channels.
The ‘return’ means the sales that occur during a specific time period when your advertising was served by the adtech. If someone is served an ad and if they purchase within a set time frame, those sales are attributed to the activity.
Whereas ROI is ideally calculated using market mix modelling (MMM, aka econometrics), ROAS is calculated using digital attribution, which can vary from platform to platform. Here’s a helpful article from Google on the different types of attribution modelling and the different ways credit can be attributed.
Digital marketers and finance teams love ROAS. They love the immediacy, predictability, the near instant reaction of the platforms and their algorithms, the confidence that if they plug the number into the adtech, it will buy them a sale.
The issues
Given its very common use as a target set by finance teams and as a buying objective in digital media, ROAS is likely to be leading to a real-time, real world version of the theoretical problems with ROI: short-termism, under-investment, de-prioritising longer-lasting activity and stifling growth.
ROAS isn’t what it says it is
The word ‘return’ in the name creates an illusion of causality that just isn’t true from how it’s calculated. The ‘return’ means the total sales from people who happened to be targeted with ads during a set period of time. If someone buys something at some point soon after they were targeted with an ad, it’s marked down as a ‘win’ for the platform. Or alternatively the last platform to receive a click within the chain might receive all the credit. Ex-Adidas marketer Simon Peel says: “ROAS is a misnomer. It should be called ‘credit for ad spend’.”
ROAS can take credit for other channels’ earlier work
ROAS can foster a sense that channels ‘compete’ rather than work together. Imagine a football manager believing their centre forward is entirely responsible for every goal so ditching their defence and midfield for 10 centre forwards. ROAS is only measuring what happens in the final third of the pitch. As Peel says: “It is a fraction taking credit for the whole.”
Chasing ROAS chases easy sales, not growth
The closer an audience is to the buying decision, the higher the ROAS will likely be. These are people who already know you and are ready to buy. And you can’t rely only on them for your growth, you need to fill your funnel with people who are further away from purchase, so will naturally deliver a lower ROAS. You need a more balanced plan, rather than expecting all activity to have a high ROAS and switching off anything that doesn’t.
Chasing ROAS can mean targeting people who would buy you anyway
A high ROAS may even mean the opposite of an ad ‘causing’ a sale: the algorithms finding people who were going to buy anyway. So it’s not just like targeting low-hanging fruit, but targeting falling fruit. Or like hanging outside a shop and tapping shoppers on the back as they enter then claiming you’ve enticed them in. It can mean inadvertently prioritising channels based more on their technical ability to tag people than their ability to reach or get attention from them.
ROAS may inversely correlate with growth
Brand growth comes disproportionately from light buyers, but focusing on high ROAS can lead to you targeting more and more heavy buyers, so limiting growth. It can make brands inward-looking and too focused on existing customers, rather than on reaching new customers.
So like ROI, ROAS has been presented as a growth metric, when it’s actually anything but. In fact, ROAS appears precision-engineered to keep brands small.
Some real world damage caused by maximising ROAS
Here are just a few real world examples I’ve seen that illustrate some of this:
A famous sportswear brand testing some well-known remarketing technology wasted millions of adspend, because while the tech claimed £4 ROAS, only 1-2% of the sales were found to be incremental.
A well-known online fashion retailer that’s been targeting a total ROAS across all media for five years has seen its share of search and share of market decline ever since.
A respected B2B financial services brand shifted budget to search, its most efficient channel, and subsequently saw net customer acquisition, revenue and market share decline year on year.
A sports brand heavily increased ROAS-optimised digital spend and saw share of search decrease and price sensitivity increase year on year.
A jewellery brand consolidated spend solely into commercial periods when they saw high ROAS, and saw brand associations with key category entry points decline over time.
So how did ROAS get so big?
A conspiracy theorist might think ROAS was created by the adtech world to frame what success looks like on their platforms, to massage the apparent success of campaigns, and make their platforms look like they perform better than they actually do.
Conspiracy or not, ROAS is among the innovations that helped the platforms and adtech become such dominant forces in marketing. Alongside digital’s promises of precision targeting, trackability, attribution and accountability, ROAS has proved to be one of digital’s decisive weapons against ‘traditional’ channels, which weren’t so easily able to demonstrate their value to a new breed of advertisers in real time.
New channels will appear to have an advantage over established channels if people believe wrongly that the higher ROI or ROAS they’re seeing from them is a sign of their superior effectiveness rather than that they’re new and people aren’t spending much on them yet.
ROAS is part of a skewed view of how advertising works
ROAS doesn’t stand up to a lot of scrutiny when seen through the lens of how advertising really works, not how adtech people assume it works.
In adtech’s worldview, people are rational economic actors: someone is targeted with an ad on platform A; they are now aware of product X; they consider it better than product Y; they click and buy; platform A was responsible for the sale.
We should be wary of the platforms’ sales pitch that ‘our platform A will drive more of your sales with a higher ROAS than platform B’ given it’s based on such a simplified fantasy about how people, brands, ads or buying work.
To be fair, it’s a philosophy that’s been around for a century. It’s the ‘strong force’ theory of advertising, and it attributes far more power to advertising or an individual channel or piece of communication than is ever the case.
Advertising mostly influences people’s behaviour by building and reinforcing brand memories before they’re in the market, and when they fall into the market, it can refresh those memories to help the brand be a little more likely to come to mind and be chosen. So rather than driving awareness, consideration and conversion, digital advertising is really part of a rich tapestry of thousands of little touches (including all sorts of stuff that isn’t ‘advertising’ or ‘digital’) that combine together to gently contribute to maintaining or increasing sales.
Ads on a given platform do not exist in a vacuum – with their own distinct ROAS number that can be calculated within that platform alone.
Below is a version of the standard ‘awareness-consideration-conversion’ funnel created to try and bring the performance and the brand marketing worldviews together and a little more in line with how brands grow and how advertising works. To build brands in people’s minds, nudge people who are in-market towards choosing your brand, and to help connect people to a brand online who have already decided to purchase. It’s not perfect of course but it appears to resonate with marketers with usually quite different perspectives.
So what now?
Brands are networks of mental associations. Audiences’ use of the platforms is interconnected and fluid. We should create creative campaigns and media strategies that build on and exploit this. Campaigns that bend, flex and scale across platforms. We should plan our media holistically not horizontally, not in separate rows on a spreadsheet and by splitting up available budgets in multiples of £100,000 per channel. And evaluate our campaigns independently from the platforms’ desire to present themselves in a more flattering light than the others.
If the digital advertising ecosystem is going to mature and evolve beyond its origins as a set of short-term direct response channels into the full-funnel brand-building marketing ecosystem it wants to become, the platforms need to become more geared to helping brands genuinely deliver real growth, to be better able to help build demand for brands as well as harvest that demand. So we need them to continue to re-engineer and evolve the way their ad formats, algorithms, measurement and metrics work.
They are definitely trying to evolve. Many platforms now offer advertisers a much broader set of objectives and metrics than just ROAS or CPA targets, including reach and other brand goals. Some companies like ours have the expertise to bend the algorithms to make them work more effectively through the funnel. Being able to customise the analytics platforms now also means you can explore replacing ROAS as a target with other metrics that are more likely to incentivise actions that generate incremental growth from new customers, such as variable cost per outcome (example below), new SKU sales or rate of growth by territory.
This is not an argument against the use of hard metrics, it’s an argument for a more considered use of genuine growth metrics, not targets that can inadvertently limit it, and an argument for broadening out the metrics we use and never only focusing on maximising one.
But a strong bias towards efficiency metrics such as ROAS remains among many performance marketers. Digital marketers and their finance people will need to change their mindset, philosophy and understanding of how brands really grow and how ads really work. It’s definitely happening – a lot of ‘performance’ marketers really get it – but it will naturally take time.
Crucially, marketing teams will need to change the way they work together and are incentivised. If teams are set up to optimise everything to ROAS as a KPI, they could be unwittingly pushing an agenda that sets them against their colleagues and is to the detriment of their organisation.
But don’t just take my word for it on ROAS. Avinash Kaushik, digital marketing evangelist at Google, said this in his personal blog post ‘Die ROAS, Die’ in 2019: “I profoundly dislike ROAS…It distresses me to no end that companies and agencies all around us use ROAS as currency – inflating its value far, far beyond its minuscule value. It is a navel-gazing advertising-centric metric. It is not a business metric.”
Just imagine how much better digital advertising could be if we could get beyond arguments about how it all works. If we stopped using competing KPIs or metrics that limit rather than promote growth. If we stopped believing we all had to pick a team – team brand or team performance. Then we might be able to ditch our entrenched brand or performance marketing perspectives, for a marketing performance one.
ROI is a mass of contradictions. It’s loved by many, hated by some, really hated by a few. It’s simultaneously what marketers say is their most important metric, whilst also being marketing’s most misunderstood, misused and even damaging.
Far smarter, more data literate people than me have been warning of the dangers of focusing on maximising ROI for a long time. Other equally smart people also say it’s ok to use ROI so long as you know what it’s good for and are aware of the pitfalls, and in any case what would we use instead to compare the value for money you’re getting from channels and campaigns? Both are right.
For many, the problems with ROI are well known. But sadly because those problems aren’t easily intuited, it will always be important to keep reminding and educating ourselves about them so that fewer people get seduced by it and unwittingly allow it to limit their brand’s growth in the future.
So this is a public health warning for anyone who needs to be made aware of the side effects of getting hooked on ROI. If you know someone in danger of that, in marketing, finance or beyond, feel free to pass this on.
In 2004, London Business School marketing professor Tim Ambler proclaimed ROI dead and ordered its immediate burial. His article ROI is dead: now bury it is a stone cold classic. It’s lost none of its power in that time. In a similar vein, Byron Sharp calls ROI a ‘stupid metric….that can send you broke’. Peter Field has called it ‘incredibly dangerous’.
And yet.
ROI lives on and no one ever did bury it.
ORIGINS AND DEFINITIONS
ROI’s seductive power for marketers is rooted in its origins as an accountancy term. This makes it irresistible to a discipline which is constantly told it needs to be more conversant in the language of the boardroom. And whilst it seems perfectly obvious that a business would want to achieve a high return on investment in everything it does, when you get into how ROI actually works it’s really not that simple.
Most of the people who pepper their communication with talk of ROI usually don’t actually mean ROI in the correct definition of the term, and use it inaccurately to mean ‘results’ whilst trying to add a superficial sheen of commercial respectability to what they’re saying.
Peter Field says it best: “There are lots of flaky, woolly and totally moronic definitions of ROI floating around in the world of marketing, but there can really only be one – which is the definition of ROI that an accountant would understand. It’s an accountancy term and any attempt to use the term ROI on any of these flaky measures is completely misguided.”
So let’s be clear on its definition: ROI is the net profit generated by your activity, divided by the total cost of that activity. Profit – costs / total costs.
So whilst it incorporates a measure of the effectiveness of your activity (ideally profit), it is not itself a measure of effectiveness, it’s a ratio designed to express how efficiently your activity achieved its incremental profit. As Les Binet likes to say ‘Effectiveness first, efficiency second – net contribution to value first. ROI is a useful metric but not the only one’.
IMPORTANCE
Marketing Week’s ‘Language of Effectiveness’ survey 2022 suggests why ROI is such an important metric for marketers. It’s what marketers believe their boards want to hear: 48% of marketers say ROI is the most important metric for their CEO, CFO and board members. Marketers know that boards like hard numbers, and there’s no harder-looking metric than ROI.
And despite the huge influence of its heavyweight detractors in marketing, ROI looks like it’s growing in significance. In Marketing Week’s survey, 37% claimed ROI has increased in emphasis, topping the poll.
ROI is used differently by different people
I think there are probably four types of people when it comes to ROI, and they get more sophisticated but fewer in number as you move up the scale. The people who really know what they’re talking about are at the top of the pyramid in group 4. They’re vanishingly rare but we should all aspire to be like them:
People who say ROI but mean something really vague (c70%?)
People who say ROI but actually mean something specific like profit or sales (c20%?)
People who use ROI a lot and use it correctly to mean net profit – costs / costs (5%?)
People who use ROI sparingly and use real effectiveness measures instead (5%?)
There’s not much we can do about the people who use it incorrectly in conversation and presentations for spray-on credibility, apart from to suggest that using it like that will make them look a bit dumb if they are ever allowed into that hallowed boardroom. Using ROI to mean ‘results’ is just one of the very many things that makes us marketing people look stupid to non-marketers on a daily basis.
WHY FOCUSING ON IT CAN BE DANGEROUS
Focusing solely on ROI can be dangerous because, counter-intuitively, it’s likely to inversely correlate with growth. Here’s why.
Focusing on ROI tends to obscure the scale of effectiveness
One of the basic issues with over-focussing on ROI is that due to it being a ratio, it can disguise what really matters: the absolute amount of profit or revenue generated. You should if possible focus on the net profit generated by an activity when judging them against other activities. What matters most is how effective something is at achieving its objectives; how efficient it is at achieving them is secondary. A relatively low ROI of 150% on a $10m campaign (campaign A) drove a $5,000,000 profit, while an amazing 500% ROI on a $100,000 campaign (campaign B) drove only $400,000 profit. Plainly campaign A was far more successful despite its far lower ROI.
Higher budget activities tend to have lower ROI, lower budgets tend to have higher ROI
All budgets spent in a given channel, will at a certain point, begin to deliver diminishing returns. The first $ you spend will likely be the most profitable, and the last will be the least. Higher spends tend to be more effective (higher profit), but less efficient (lower ROI), and vice versa. Warmer prospects are more likely to notice and respond quickly, but colder prospects are likely to respond more slowly as they need more frequency to notice and pay attention, and more time so more can enter the market.When Les Binet was asked on Twitter recently, which ad campaign from his research had the highest profit ROI, Byron Sharp jumped in and said with his trademark penetrative wit “the one that didn’t spend enough”.
Focussing on ROI tends to favour fragmented spends
Focussing on ROI can lead to you splitting your budgets into lots of smaller, tactical, less scalable activities that make only very small amounts. These will likely have a higher ROI but are unlikely to make a big impact on a business. Whereas a more concentrated approach with fewer, bigger channels and higher total profit but lower ROI would be more effective. Here’s Peter Field on how focusing on ROI can deliver “very mediocre improvements in trading, but at a minute cost…These are typically…highly tactical initiatives that look fantastic in terms of ROI, but are not scalable and do not drive long-term growth”.
So having a high ROI may actually mean you’re not spending enough money to maximise sales or profit. A high ROI is better viewed as a signal that you should be working with your finance partners to unlock additional budgets to invest; it shouldn’t be seen as something to celebrate.
In summary: focusing on maximising ROI can destroy value
It can lead you to be satisfied with small budgets, or even deflate your budgets, and ultimately destroy value. That’s because the easiest way to boost ROI is not to grow the numerator (your net profit), it’s to shrink the denominator (your budget). If you focus on growing ROI rather than actual growth, it can lead to odd decisions like accepting smaller budgets overall or atomising your budget across too many channels.
SO WHY USE ROI AT ALL? None of this is really an argument for banishing or burying ROI. Just seeing it as one metric that’s useful but not as important as what actually really matters to CFOs and boards – real business outcomes like new customers, increased sales, or better, profits.
Of course it’s important to know that growth isn’t coming at too high a cost to be sustainable, i.e. that it’s being delivered efficiently, but that has to be secondary: effectiveness first, efficiency second. It’s not a metric you should be using for big strategic decisions, but for keeping an eye on the efficiency of what you’re doing.
Another use for ROI is that it can help when making comparisons between activities that would otherwise be impossible to compare. For example the IPA Effectiveness Awards require brands to calculate ROI to help judges in their assessments between vastly different campaigns, brands and categories. But they’re judged very very carefully by a large panel of data and econometrics experts who are all intimately familiar with the issues.
In talking to Dr Grace Kite about ROI, she was characteristically realistic and pragmatic about it all, and less academic or concerned by its use than other marketing effectiveness experts. “I stand behind ROI. Value for money is always important in big purchases, and million pound advertising campaigns are no exception. Marketing directors and CMOs know this, they are very rarely that strange breed of person that’s got more money than sense.”
She shared a typical chart she uses with clients, which aims to plot the total revenue, scale of activity and the ROI achieved by different channels and activities – with the aim to get as many big blobs of activity in the right-hand upper quadrant of the chart.
So it’s ok to use ROI in context of the overall effectiveness of an activity, but it’s also important to be aware of the damage that an over-reliance on it can cause. Grace would argue that so long as you’re prioritising the scale of revenue or profit impact of your activity, and are aware of the dangers of reducing budgets to artificially increase the only secondarily important measure of efficiency, it’s just common sense to keep an eye on the value for money you’re getting in different channels.
So don’t focus solely on maximising ROI, use it to assess value for money alongside other, genuine measures of effectiveness.
Its digital doppelganger ROAS, however, seems to be more problematic, but that’s another story.
*For any non-UK readers, Marmite is a yeast-based spread whose long-running advertising slogan ‘You either love it or hate it’ has become so famous that if you describe something as ‘marmite’ to anyone in the UK they know that you mean it’s extremely polarising. And you can even do fun/tasteless things like this in ads on the death of a much loved/hated figure.
Advertising’s not dead, it’s not dying and no one’s going to kill it any time soon. It’s never been more alive, so instead of taking aim, let’s be dead proud of it.
People constantly declare that advertising’s dead. Fast Company recently claimed David Droga wants to kill it. Elon Musk said Tesla doesn’t do it. Jeff Bezos said only unremarkable brands need it.
Why do so many people do advertising down, even from within the industry? It’s a thriving global business that’s never made a bigger global economic impact.
The idea that advertising’s dead or dying is bizarrely persistent, given it can be countered with just three words: Alphabet, Meta, Amazon. Their combined revenue from advertising was around $240bn in 2021.
If Netflix also joins the party, and with Apple also having a fast-growing ad business, the FAANG flush will be complete. For the first time ever, a handful of the world’s very largest, most powerful companies are, or at least include, significant advertising businesses.
So, if your metric is commercial success, advertising has never been more alive. Which means anyone claiming advertising’s dead, dying or needs to be killed is firing blanks.
Why the idea’s so persistent
The ‘advertising is dead’ trope actually appeals to a pretty broad church, which probably goes some way to explaining its longevity.
Many are nostalgics with a rose-tinted view of the past, lamenting a perceived decline in the creative quality and emotional impact of the industry’s output. They tend to be creative agency veterans disappointed with the changes they’ve seen in the industry since the 90s. For them, the current commercial success of the industry has come at too high a cost to the industry’s creative soul. They perceive their industry as having been under attack from outside forces and having been changed beyond all recognition. Far from being evidence of its vitality, for them, the three corporations mentioned above are partly to blame for its demise.
But the ‘advertising is dead’ line is probably more commonly deployed by people hyping up the dawn of a new era and new technologies. What unites both groups, whether they’re mourning advertising’s loss or dancing on its grave, is a belief that technology is responsible.
Much of it is really just lazy headline writing. The standard headline in the genre is actually ‘Advertising as we know it is dead’ or the classic QTWTAIN (question to which the answer is no) ‘Is advertising dead?’. Often what these articles actually go on to say is ‘TV advertising has a smaller share than it used to and other advertising channels like X are growing’. So it’s often just clickbait from people who are signalling they’re modern, innovative and disruptive…with some newer, shinier kind of advertising to sell you.
You could argue it’s just a harmless sales trick. But it’s a sales trick that’s been repeated so frequently that the word ‘advertising’ has collected a ton of baggage. Baggage that’s shaped perceptions that it’s old-fashioned, on its way out, wasteful, inefficient and ineffective. So not harmless at all.
The new platforms had new forms of advertising to sell. New types of agencies and consultancies emerged to help brands take advantage. Existing agencies wanted to show they were keeping up without looking out of date. Individuals had careers to protect and couldn’t risk looking like dinosaurs. We’ve all in some way been complicit in depositioning our core product. I know I’ve been guilty of it.
The people with new kinds of advertising to sell created an imaginary world called ‘traditional’ advertising. An old-fashioned and inefficient method of producing and distributing advertising, made by old-fashioned ‘legacy’ companies, used by old-fashioned brands, bought by old-fashioned marketing people.
We all bought into a related narrative about a golden age of advertising in the 20th century, led by the glamorous, cool, creative geniuses of the ‘Madmen’ era, and the idea that this has now been replaced in the 21st by the left-brained, data-driven types of the ‘Mathmen’ era. Leaving aside the stereotyping, the problematic terminology and that any talk of a golden age in any field should always be treated with scepticism, it’s a compelling narrative with a kernel of truth, but it’s ultimately a false dichotomy. Has the proportion of ‘creative’ people in our industry really shrunk? Possibly. But have we all gone from being Madmen to Mathmen? Of course not.
Social media was initially framed as a way to help brands reduce their dependence on costly and wasteful advertising, by allowing brands to tap into communities of followers and reach more people for free. This essentially anti-advertising stance of course had to evolve as the platforms developed their ad products and adapted their algorithms. Social media became less ‘social’ and more ‘media’.
With ‘Don’t make ads. Make TikToks’, TikTok is playing a similar game – using a disruptive anti-advertising stance to advertise its ad products to ad agencies and advertisers.
From this alone you can see how tainted the word ‘advertising’ and all its derivations have become. It would seem bizarre to anyone outside the industry, but even using the word advertising can sometimes feel like it sends out the wrong signals. We so often substitute it for alternatives like comms, campaigns, film, video, content, copy and of course the now ubiquitous asset. Anything but ‘ad’. Maybe we need to try to use that simple, useful, truthful little word a little more often?
Musk and Bezos on advertising
So far I’ve mostly been describing the collateral damage the industry has managed to inflict on itself from the inside. But just as damaging is how similar themes have been picked up beyond adland.
In the world of tech startups, word of mouth and virality are so highly prized that a reliance on advertising for growth has come to be seen as a weakness, a sign that a company hasn’t quite got the X factor, a tax on a poor product. In this environment, proclaiming you’re fundamentally opposed to advertising has become a way to promote your genius and the brilliance of your product to investors. A way of saying “we’re so smart that our innovation will earn us an outsized share of attention in the marketplace – we don’t need to do something as dumb as paying for ads”.
This is what Musk and Bezos were both doing when they made their famous anti-advertising declarations. Musk’s 2019 tweet, “Tesla does not advertise or pay for endorsements”, and Bezos’s still much-quoted line from 2009 “advertising is the price you pay for unremarkable thinking” both come from a similar place.
Debates about whether Tesla does actually pay for advertising or not usually come down to how you define ‘paying for advertising’, whether very narrowly (eg paying for TV spots or search ads), or very broadly (paying tens of millions of dollars to fire a product into space, place it in front of the camera and livestream the results to the entire planet).
If you define it broadly, as something like ‘the monetisation of attention’, Musk, already the world’s richest person and perhaps its greatest showman, is ironically a far more archetypal ad person than his CEO counterparts Jeff Bezos, Mark Zuckerberg, Sunder Pichai and Tim Cook – all in the ad business but not exactly ad people. Only time will tell if he can continue to support his position on paid advertising as Tesla’s strong grip on the EV market slips.
Whether Musk pays for advertising may be arguable, but Bezos’s U-turn is unarguably one of the greatest stories we have for the continued value and vitality of advertising:
Bezos makes a famous and influential denunciation of advertising.
He learns the value of advertising from Amazon’s own data and changes his mind.
Amazon becomes one of the largest (and best) global advertisers.
Amazon builds one of the world’s largest ad businesses.
Musk and Bezos are outliers. And yet, many brands continue to take inspiration from them by making overt rejections of advertising, often as a way to get attention and proclaim their genius in their early days. Similar claims from brands including Monzo and Brewdog were both later reversed when they grew and advertising was needed to help take growth to the next level. In fact it seems like there’s an immutable law of modern marketing that every vociferous rejection of advertising is later met with an equal and opposite endorsement of it.
Musk may not ‘pay’ for ad space, but he certainly has a deep understanding of one of its most valuable potential outcomes, fame. Many advertisers understand advertising but very few really understand fame. And unless you’ve got the same nose for fame as Musk, paying for attention is likely what you’re going to need to do to achieve it.
So it’s not just social media that’s guilty of deploying a kind of ‘bait and switch’ – claiming to be anti-advertising but then reversing their position when they need to make the commercials work – it’s a pattern that’s constantly being repeated by platforms, agencies and advertisers as they mature.
Let’s not do advertising down, let’s stand up for it and celebrate it
The ‘advertising is dead’ myth is especially bizarre because advertising has never been more alive. We have never had a wider, more varied array of options and opportunities available to us. But as an industry we often seem a bit embarrassed, even ashamed of what we do.
How the advertising industry uses the power of human imagination for commercial impact should be something we’re all in awe of. We’ve created commercially viable processes to harness human creativity, craft and design skills. We’ve developed the technology to distribute the output across billions of screens. When done right, our product can attract and keep people’s attention, entertain and move people, communicate powerful ideas, create indelible memories, and influence consumer behaviour both now and in the future.
Paid advertising in its huge variety of forms continues to provide a consistent, regular, controllable way of getting a company’s core message in front of new audiences that no other marketing communication can match.
Companies have many options open to them to help reduce costs and do things more efficiently, but few growth levers. Advertising is one and it’s proven. In fact there’s arguably no more researched, picked-over and proven discipline amongst all the different kinds of commercial activity most companies do.
The excellent work of Grace Kite and others in building the ARC database, a meta-analysis of hundreds of real-world case studies from companies of all sizes, categories and using all channels, shows advertising today returns an average £3.80 revenue for every £1 spent. IPA Effectiveness award winners return more, £13 revenue for every £1 spent, but they’re outliers, the very best of the best.
Advertising’s naysayers invariably have ulterior commercial motives for undermining perceptions of what it can do. It’s rare that they’re making any significant or serious point that’s in any way testable or backed up by data as robust as this.
Global advertising spend in 2021 was around $689bn and is forecast to reach $850bn by the end of 2024. Deloitte’s calculation of the overall economic contribution of advertising suggests that every $1 spent on ads generates $6 in broader economic impact. Which means advertising’s economic impact could be around $4tn annually. Roughly equivalent to the GDP of Japan or Germany. The role we play in driving the economy, and therefore society, forward is something we should be proud of. We often highlight advertising’s societal impact when talking about social purpose, but advertising’s economic impact alone should be a sufficient source of pride.
That $689bn would have been spent on trillions of ad impressions. Never have more ads been served to more people, more often. It probably doesn’t help advertising’s ‘brand image’ that they’ve also never been shorter, viewed on smaller screens, and attended to for shorter amounts of time. The shop window for our wares has definitely got smaller, less distinctive and less enticing (although with Netflix potentially joining the party, this direction of travel could be about to change). But that’s a technical issue that our ingenuity and creativity as an industry will overcome.
Could advertising be ‘better’ today? Of course. But everything can always be better. Are there big problems that need to be fixed in today’s advertising ecosystem? Of course. But are advertising’s problems existential? Of course not.
Advertising will be with us forever
When you take a much broader historical view of advertising, it reveals that – despite the peaks and troughs, the new channels emerging and existing ones evolving – advertising as a percentage of GDP always tends to stay remarkably constant over time. For decades ad spend has hovered around 1% of GDP in the US. Its growth mirrors the growth in the economy. It’s basically a historical constant. Wherever there are eyeballs, there will be advertising.
And it’s not a new issue for creative people to be wrestling with either. You can see it in the famous quotes of many of the ad legends of the 60s:
