At last! A new way agencies can demonstrate their superiority to an increasingly marketing-savvy breed of clients.
Econometrics.
Advertising's new "Holy Grail", according to no less an authority than WPP Group's Sir Martin Sorrell.
As indeed it is for any harassed agency account director on the receiving end of a smart-ass lecture by a client's management trainee, fresh out of business school with an MBA in marketing.
Experts in gamesmanship recommend the following counter-attack. Await an opportune moment, assume an earnest demeanor, nod loftily, then go for the jugular.
"Ah," you ask, "but does it necessarily accord with the results of testing for stationarity in heterogeneous panel data where the time dimension is finite?"
And the glorious fact, folks, is you'll not be kidding. All but the first few words of the above gobbledygook is a straight quote from The Econometrics Journal, March 2005.
Small wonder, then, that Sir Martin is so impressed. Speaking to the Wall Street Journal, the adland savant averred: "There is no doubt in my mind that scientific analysis, including econometrics, is one of the most important areas in the marketing-services industry."
But - Holy Grail or Black Art - what the heck is econometrics? The Oxford English Dictionary defines it thus: 'The branch of economics concerned with the use of mathematical methods (especially statistics) in describing economic systems.'
The WSJ offers a windier contribution: "Econometrics uses statistical analysis to measure the relationship between different sets of events, such as the effect of educational qualifications on wage levels. To determine an advertisement's effectiveness, econometricians write an equation to measure the effect on sales of different factors, including the weather, price cuts and advertising. For the advertiser, the purpose is to help decide which ads to run."
In the face of such constipated prose, adland remains skepticaL At last month's Cannes Lions event, Chuck Porter, chairman of US hotshop Crispin, Porter + Bogusky shared the stage with Sir Martin.
In response to Sorrell's urgings to adopt a more scientific approach to measuring the effectiveness of ads, Porter responded, "I don't understand what we're talking about." The packed audience cheered and applauded.
Industry cynics wonder if Sorrell isn't simply talking up a recent injection of resources by WPP in its media network MindShare. The agency has increased employee numbers working on econometric modelling from just twenty in 2000 to a current level of 150.
Data sourced from Wall Street Journal Online; additional content by WARC staff
