LONDON: To exploit the full potential of marketing in the changing media landscape, brand owners must strike a better balance between the long and short term, a new study claims.
Media in Focus – Marketing effectiveness in the digital era, written by Les Binet and Peter Field, is based on evidence from the Databank of IPA Effectiveness Awards case studies, and it updates the media-related findings in two previous analyses of the IPA Databank: Marketing in the Era of Accountability (2007) and The Long and the Short of It (2013).
In their latest work, previewed at last year's IPA Effectiveness Week, Binet and Field set out three key ways agencies can improve the effectiveness of their campaigns.
The first is the need to adopt a longer term strategy. Measured by their ability to generate large activation effects, short-term strategies can seem effective, they said, but only when viewed over the long term are they revealed as highly ineffective: only 3% of short-term cases generated very large market share growth, whereas 38% of 3+ year cases did so.
In a related finding, the authors asserted that the optimum balance between brand and activation expenditure remains at around 60:40. They reported evidence that deviation either side of this point results in a marked decline in long-term effectiveness.
The third point relates to measurement, where Binet and Field advised a focus on profit rather than an efficiency metric, such as ROI.
Profit growth, they reported, correlates most closely with broad improvements across the range of long-term business metrics, especially sales and market share growth, as well as brand metrics and penetration.
Binet maintained that "marketing is still primarily a numbers game, and that the main way brands grow is by increasing penetration, not loyalty".
But, he added, "the key message is that brands must rebalance their budgets towards brand building to maximise the potential of the changing media landscape".
His colleague warned that "by ignoring the enduring effectiveness truths of the changing media landscape, businesses are undermining the tremendous potential of the new tools at the marketer's disposal."
He recommended marketers return to a more balanced perspective on long vs short-term objectives while recognising "they will pull campaigns in different directions".
Data sourced from IPA; additional content by WARC staff