Advertising Effectiveness Will Never Change With Analysis Like This

In a recent article, Advertising Will Change Forever, Forrester Research analyst Josh Bernoff explains that while digital spending will nearly double in 5 years ad budgets won’t. The reason for this, Bernoff explains, is that “In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent.” While this will make bloggers, digital analysts and social media strategists feel pretty good about themselves and their job security further analysis is required.

Asking marketers about the effectiveness of individual channels is part of the problem. Channels are not executed in a vacuum. We now understand from rigorous attribution research conducted by Microsoft Atlas and others what we have always assumed to be true, that the effectiveness of individual channels is significantly affected not only by other online channels but across offline channels as well. As long as research companies like Forrester and marketers take the easy way out and evaluate the effectiveness of channels in a silo, progress towards really measuring the effectiveness of marketing will never be made.

Bernoff goes on to fuel the fire by proclaiming the oncoming death of traditional channels, “If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.” Contrary to this statement, Forrester’s own data shows that while time spent online has been growing rapidly, time spent watching TV is actually up YOY and still captures the majority of consumers time.

My recommendation is to ignore predictions of the death of traditional channels and ignore research that evaluates the effectiveness of channels in a silo. With the proliferation of new channels, consumers continued use of traditional channels and increasing cross-channel behavior, if you’re in advertising, you’d better learn to speak and measure integrated, because that’s the way the world is really going.


Online measurement needs a cross-channel upgrade.

With a marketing seat at the C-level table and a recession still dominating the headlines, the focus on accountability in marketing is greater than ever before. Consumers are adding new online activities, like video and Twitter, while continuing established online and offline activities throughout their purchase paths.

While marketers have done a good job by adding these new channels to their marketing mix, they have not successfully integrated execution or measurement across these channels. The blessing and curse of the Internet is the ease of measuring and tracking things like impressions, click-throughs, and activity. As marketers have relied on what is easily measurable, they have often ignored metrics that align with their objectives and provide actionable insight in supporting business decisions.

Improving marketing measurement effectiveness is a never-ending journey, but marketers can take some manageable steps to get started:

  • Map business goals to campaign objectives and specific tactics. The first step in any marketing process should be aligning business goals to marketing objectives, selecting focused tactics to accomplish that objective, and measuring the results. For example, an organization’s strategic goal of strengthening their brand across key segments can draw support from various functional teams. Marketers can strictly define their contribution and objective to increase awareness by five percent for a youth segment. With an understanding of key segment’s behaviors, and attitudes, marketers can create relevant social marketing campaigns designed to drive awareness for their brand or product.
  • Identify the metrics that matter and the existing data gaps. Each new marketing channel ads its own series of new metrics, for example social marketing introduced metrics like time interactions, spread of content, velocity, number of friends, posts, etc. Only with clearly defined campaign objectives, can marketers sift through the list of things to measure and identify the metrics that measure the business success of campaign tactics. To accurately measure change in unaided and aided awareness for your brand or product marketers utilize brand surveys or professional brand monitoring services from firms like Nielsen BuzzMetrics and Cymfony. Identifying the data gaps that exist, like measuring lift in brand awareness, is like acknowledging there is a problem. It’s the first but huge step towards recovery.
  • Conduct experiments to verify assumptions and fill data gaps. Inevitably the metrics that matter are not easily measurable or readily available. After identifying existing data gaps marketers can create a simple 2X2 matrix to compare the value of the data with the cost of obtaining to help prioritize data gaps and pick the low hanging fruit or build these costs into future campaigns. Also consider commercializing this matrix to identify latent needs in other functional teams and help build the business case for more marketing measurement investment. To temporarily fill these inevitable data gaps marketers can obtain data through an existing source in another functional team, for example PR or market research teams may have ongoing brand tracking studies. It may also be worthwhile to understand if there is a company wide accepted correlation between the data you have, like impressions or number of branded searches, and the data you need.

Did this recession make value branding the only option?

Marketing in a recession often requires marketers to change tactics and do more with less, but does it require a change in brand strategy? There are conflicting opinions around investment in branding before, during or after a recession or for that matter around any significant market shift. Optimists suggest there is an opportunity to increase share of voice, capture new markets, and defend against private labels for those marketers willing and able to increase brand investment. But is this back and forth confusing for consumers and damaging for the brand in the long term?

A recent article by Patrick Seitz, of the Investors Business Daily “Best Buy’s Own Brands Gaining Steam” highlights how Best Buy’s private-label product sales rose more than 40% in its fiscal year ended Feb. 28. What does this mean for Sony and Panasonic? Has the recession changed consumer sentiment enough to require a new brand strategy?

Home Depot apparently thinks so, as they recently made a significant shift from “You Can Do It. We Can Help” to “More Saving. More Doing.” While I agree with changing tactics to reflect market conditions, for example shifting budgets from client acquisition to client retention, I am cautious to assume consumer sentiment has been so affected by this recession that value is now and will be the only viable positioning.