This document summarizes a panel discussion on improving marketing effectiveness in the digital era. The panel discussed that (1) effectiveness has been declining as brands focus more on short-term activation and sales over long-term brand building, (2) there is a lack of coordination between marketing, insights, and finance which hinders effectiveness measurement, and (3) panels recommended treating effectiveness as a competitive sport, taking a more holistic view of ROI, and introducing risk and reward language to improve marketing effectiveness.

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Jonny Protheroe
Head of Marketing Insights UK
Google
Lindsey Clay
CEO
Thinkbox
Michael Barrett
adidas GLITCH
Sally Taplin
Managing Partner
iris Concise
Sophie Lewis
Head of Planning,
iris
Chair:
Paul Bainsfair
Director General
IPA
Ben Essen
Executive Planning Director
iris

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Latest
thinking
from
the IPA In association with
LES BINET ADAM & EVE DDB
PETER FIELD PETER FIELD CONSULTING
NEW LEARNINGS FROM THE IPA DATABANK
MARKETING EFFECTIVENESS
IN THE DIGITAL ERA
IN F CUS

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What do we mean by effectiveness?

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24/10/2017
Successful delivery against business objectives.
Driven by an evidenced view of what is and isn’t working.
Active decision
making
KPIs
Consistent
measurement
Learning
culture

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How is your organisation doing?
24/10/2017
Self-assessed
‘scores out of 10’
Source: IPA Culture First

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However overall levels of effectiveness are falling
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2006 2008 2010 2012 2014 2016
Numberofverylargebusiness
effects
10 years ending
Source: IPA Databank

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So what’s going on?

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Source: Companies; Jefferies analysis
Organic sales growth in Global Foods & HPC since Q1 2009
1 Average of Nestle, Unilever, Danone, Kraft, Mondelez, P&G, Colgate, RB & L’Oreal
(1.9%)
(0.2%)
1.4%
4.9%
6.3%
5.7%
5.0%
4.6%
3.7%
3.0%
2.2%
1.5%
2.0%
2.6%
1.6%
2.4%
2.4%
4.0%
3.2%
2.7%
2.0%
1.5%
0.2%
0.5%
0.0%
(0.1%)
0.2%
0.1%
1.5%
1.6%
1.3%
0.8%
0.3%
0.3%
5.1%
2.7%
1.8%
(0.4%)
(1.3%)
(1.3%)
(0.6%)
(0.0%)
1.1%
3.6%
4.0%
4.7%
4.0%
2.3%
2.4%
2.0%
1.9%
0.6%
0.9%
1.3%
1.3%
1.7%
2.8%
3.0%
3.0%
2.8%
2.6%
3.5%
1.6%
1.4%
1.5%
1.2%
1.3%
1.1%
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
Volum e Price/m ix
With growth slowing, efficiency trumps effectiveness

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Brands are spending less on media
0%
2%
4%
6%
8%
10%
12%
14%
16%
2006 2008 2010 2012 2014 2016
AveESOV
10 years ending
ESOV all
ESOV long cases
Source: IPA Databank

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Sales activation has grown
40% - 50%
advertising spend.
0
2,000
4,000
6,000
8,000
10,000
12,000
2000 2015
Analogue Digital
Direct response ad expenditure (£m)
Source: Enders Analysis
Harnessing opportunities to activate immediate sales

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Source: Emma Harris, IPA breakfast
86
30
0
10
20
30
40
50
60
70
80
90
Months
1984 2013
65% decline in length
of agency tenures
Exacerbated by shorter tenures

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Increased activation of sales, lack of investment in
brand
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2006 2008 2010 2012 2014 2016
%casesreportingverylargeeffects
10 years ending
Activation
effects
Brand
awareness
growth
Source: IPA Databank, 1998-2016 cases

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Effectiveness Unit within Marketing but separate from Insight/Analytics
Effectiveness Unit within Marketing inside Insight/Analytics
Effectiveness Unit inside Commercial Department
Responsibility split across Marketing and Insight
Responsibility split across Marketing and Insight and Finance functions
Finance are far more involved
“We are focussing
more on this now.
The budget is
as big as the capex
but has none of the
rigour”
Commercial Finance
Manager

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“Putting a financial outcome on our brand campaign is virtually
impossible, because it’s not driving a specific customer to come in and
buy xyz – it’s driving a brand halo effect.”
Marketing Finance Controller
We’re failing to justify ‘the fluffy stuff’
“I am a Finance person. I like certainty. Marketing also look at – I can’t quite
remember the name of it – something to do with brand equity. If I’m really honest
from a finance point of view I don’t give much weight to the softer ones – the brand
equity stuff.”
Finance Director. Source: IPA Culture First

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Sales uplift over base
Time
Source: Binet & Field 2013
Sales activation
Short term sales uplifts
Brand building
Long term sales growth
Short term effects dominate ~6 months
We need clearer distinction between short and long term levers

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“It’s about equilibrium and balance. Finance gives you an indication of
the current health of the company. The brand is an indication of the
future performance.”
Corporate Innovation and Strategy Director.
“We need to think of marketing as less of a cost centre but as a
strategic growth driver.”
Lindsey Clay, Thinkbox.
Source: IPA Culture First, iris Eff Event
We need clearer distinction between short and long term levers

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So what do we need to do?

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Commit to the KPIs that matter
Methods
(

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Start talking the language of finance
24/10/2017
‘If we change the
language, Financial
Directors will start
paying attention’
Jonny Protheroe, Google

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Non working media
Brand halo effect
Soft metrics
Longer term spend
Asset Creation
Value/Margin protection
Levers to unlock future growth
Margin defence /Share protection
Start talking the language of finance

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Pushing the effectiveness agenda forward

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98.6%99.8%
no
data
targeting
with
data
targeting
1. Move beyond
effectiveness
by increments

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1. Move beyond
effectiveness
by increments

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1. Move beyond
effectiveness
by increments
“We need old forms of measurement for new forms of
media”
Lindsay Clay, Thinkbox
“Sometimes you need to throw all the cards in the air to
try something else. Rather than optimise towards the
middle, ask yourself what was special about the top 1%?”
Jonny Protheroe, Google

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“If everyone were to
advertise effectively,
then advertising
wouldn’t be effective”
Ivan Spiegel, Snapchat
2. Treat
effectiveness as a
competitive sport

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2. Treat
effectiveness as a
competitive sport

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“For any brand with competitors,
there’s no such thing as the no-risk
option. If you don’t do it someone
else will do it…
But a small controlled experiment can
demonstrate that it can work”
Michael Barrett, adidas Glitch
Source: iris Eff Event

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“This £ spend is worth £xx in its
lifetime”
• Beyond direct sales returns
• Create proxys for long term profit growth
• Don’t underestimate the unmeasurables
• More focus on price elasticity
3. A more holistic
view of ROI

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“Don’t be too quick to judge short term measures. They tell you that you’re doing
something right now that is working. It’s ok to embrace the pragmatic within the big
picture.”
Michael Barrett, Adidas Glitch
“How do you give quantifiable value to the brand in the future? How demonstrate
its value vs quick fire returns?”
Sophie Lewis, iris
“Back in 2007 Marketing in the Era of Accountability identified the most accurate
predictor of effectiveness was likeability. That’s not a bad measure”
Lindsay Clay, Thinkbox
Source: iris Eff Event

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4. Introduce the
language of risk
and reward

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“Risk taking isn’t gambling. It’s having a culture that is prepared to
look forward and plan. If you don’t have the planning you can’t
confidently take a risk.”
Sally Taplin, iris
“Brand response means we’re doing it for brand reasons but we’ll
measure it using response metrics”
Jonny Protheroe, Google
Source: iris Eff Event

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Jonny Protheroe
Head of Marketing Insights UK
Google
Lindsey Clay
CEO
Thinkbox
Michael Barrett
adidas GLITCH
Sally Taplin
Managing Partner
iris Concise
TODAY’S PANEL
Sophie Lewis
Head of Planning,
iris
Chair: