The troubling concept of marketing effectiveness

A couple of weeks ago I went along to the launch of the Australian “Effies” – the premier local marketing effectiveness awards. In the interests of full disclosure, I should say that a company I manage sponsors the financial services category of these awards.

Effectiveness in marketing is tricky. In fact marketing as a business activity is almost defined by the difficulty involved in knowing how much difference one makes. As the father of advertising and marketing, John Wanamaker, observed more than 100 years ago: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Plenty of businesspeople still feel the same, I bet, despite our world of “big data”.

In any case, knowing whether we’re really making a difference as marketers or their agencies is a perpetual challenge.

Having judged effectiveness awards myself – the Asian Marketing Effectiveness Awards in 2011 – I think proving effectiveness boils down to two main challenges:

Isolating the marketing effect – the majority of award entrants struggle to isolate the effect of the marketing activity from key external factors that may drive change. Market share and category growth matter, of course – but so does the wider context. And we should bear in mind that for business leaders, those who marketers and agencies often criticise for “not understanding” marketing, the broader considerations of the opportunities and threats of the market environment are precisely the focus – not marketing metrics.

Two examples from my own judging experience:

• A defence force recruitment campaign, while impressive in its detail and very well argued, took little account of what is surely an important factor shaping perceptions of what serving in the armed forces might be like: the deployment of the armed force in Afghanistan – a conflict which appears in media as diverse as the headline news and Iron Man movies! Surely such factors impact how people feel about “signing up” one way or the other, relative to prior years.

• A national tourism communications initiative claimed itself to be the primary driver of increased inbound arrivals from key regional markets, even though the period in question coincided with the launch of three major international tourism campaigns targeting exactly the same markets with their own substantial marketing efforts.

Regardless of the factual importance of these factors (although they surely are significant) they go right to the heart of the isolation challenge.

The “golden thread”

It’s clearly challenging in the world of marketing to be totally watertight on cause and effect. But this only places more emphasis on establishing the “golden thread” of a logical link connecting business objective, opportunity identification, defining the behavioural change needed, consumer insight, strategy, creativity, execution and results.

For marketers, the integrity of the entire chain is crucial as it’s the core of a marketing business case. For agencies, the close nexus between insight, strategy, creativity and execution is surely the focus.

It was this golden thread that I found notable by its absence. Effectiveness submissions typically included these elements, but often did not credibly connect them.

Conversations I have had with senior marketers confirm this problem. Between the “unbundling” of the traditional ad agency, media fragmentation and the emergence of more specialist agencies, there are many parties fighting for the steering wheel. It’s very hard to achieve synergy of effort which is well aligned to one’s marketing plan.

The language of effectiveness

Effectiveness is complicated in marketing, and the bigger the marketing challenge, the harder it is to show what you’re doing is making a real difference.

It’s conceptually simple. Most of the time, it’s about getting more people to buy more of your stuff, more often. The problem is that all these variables have a tendency to move around on their own, and often without an obvious relationship to one’s marketing spend and activity. That’s why effectiveness awards are so important – because they increase the sophistication of the debate around this challenging topic, to the benefit of marketers and their agencies.

Effectiveness has different languages too – KPIs and ROI. It’s a significant difference: KPIs are typically based on internal and competitive benchmarks expressed as marketing measures. ROI is a business – I spent $X to earn $Y. It’s a CEO perspective that some marketers and their agencies don’t always find it easy to engage with.

So as much as effectiveness awards move the game forward for marketers and agencies, the effectiveness agenda is actually a whole of business issue, and a crucial one for businesses that spend a lot on marketing. Fortunately, driving this conversation, and bringing the business together around measures that are consumer-centric and business-relevant, is likely to help marketers achieve the increase in respect and influence they desire.