Sixty Percent of Global Adspend is Wasted, Claims Report

22 January 2009

LONDON: As much as 60% of all tracked advertising expenditure worldwide during 2008 failed to deliver the results expected by its marketers and can therefore be considered wasted.

That's the startling conclusion of all-media marketing effectiveness tracking specialist, the Fournaise Marketing Group.

The firm, which specializes in tracking, measuring and auditing the real-time performance of marketing and advertising campaigns (both in traditional and online media), monitored their ability to generate both direct and indirect engagement with their target audience.

The key criterion by which campaigns were measured was their ability to boost the advertiser's  bottom line via increases in:

  • Retail traffic;
  • Sales; 
  • Leads/prospects captured; and/or an increase in positive target audience conditioning.
While the average Marketing Wastage Rate (MWR) in the business-to-consumer industry is 65%, it falls to 47% in the business-to-business industry.

Reveals Fournaise ceo Jerome Fontaine: "We noticed that the majority of B2B marketers are very focused on making their campaigns deliver hard, tangible results, ie leads or prospects that they can convert afterwards.

"On the other hand, the majority of B2C marketers tend to rely heavily on the old and traditional model of brand building: by mainly going after awareness and recall through expensive and impact-driven media buys, they hope to deliver more sales and/or instore traffic down the line – a fundamental mistake nowadays given the high level of advertising clutter, which leads to high levels of wastage."

The three most effective media for the campaigns tracked in 2008 (ie those with the lowest Marketing Wastage Rate) were:

  • Text emails and eDMs (online category)
  • Direct mailers (direct marketing category)
  • Newspapers (print category)
Conversely, the three least effective media tracked (those with the highest MWRs) were:
  • Sponsoring (sponsorship/endorsement category)
  • Posters/billboards (outdoor/out-of-home category)
  • Banner/display ads (online category) <
With an eye on drumming-up further business for his firm, Fontaine argues that marketers around the world must overcome four key challenges:
  1. They must accept the reality that their job as a marketer is to grow their company's P&L, nothing else.
  2. They must become more bottom-line-focused and embrace P&L-related key performance indicators: every single advertising spend must be tracked and deliver tangible results.
  3. They must be prepared to handle the truth, to take the necessary action to adjust their plans and to move their budgets to the sources that achieve the highest yields, real time. Even if this  means excluding or reducing traditional spending areas.
  4. They must start thinking like business owners and treat their budget as if it was their own money.
At which point, Fontaine poses a rhetorical question: "Would you agree to give away 60% of your own money every month without getting anything back in return?"

All together now …

Data sourced from Fournaise Group; additional content by WARC staff