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Short-termism hits ad effectiveness

News, 24 June 2016

CANNES: Increasing short-termism and pressure on budgets is weakening creative effectiveness, and the digital revolution has exacerbated these trends, marketing consultant Peter Field has argued in a new report for the IPA.

Field's research, which "fused" two databases that cover decades of campaigns – effectiveness data from IPA Effectiveness Awards entries, and creativity data from the Gunn Report – revealed these two worrying recent trends. Field spoke at an event organised by Warc at the Cannes Lions International Festival of Creativity.

The study found that creatively-awarded campaigns are now six times as efficient as non-awarded campaigns, down from 12 times in 2011, and that the increasing prevalence of short-term campaigns – which generally work over a period of six months or less – is largely to blame. Short-term campaigns, the data suggests, are only around one third as efficient as campaigns that aim to last over six months.

One of the big factors driving this trend is the rise of digital advertising. When measuring effectiveness, digital metrics have allowed instant campaign tracking, making it easier to look for instant impact rather than long-term brand building.

"Clearly, creative awards judges have been seduced by this mantra of short-termism," Field said. "We've been told, the great thing about digital comms is that you can measure them instantly. But they are playing with fire when they encourage short-termism. Because it undermines the whole business case for creativity.

"Digital has done many good things, but it has really been toxic in encouraging short-termism, because these short-term metrics have become more available and are easier."

Field also found that budgets are facing big downward pressures, partly due to the financial crisis of recent years. On one metric, Extra Share of Voice (ESOV), calculated by deducting share of market from share of voice, the typical creatively-awarded campaign has drifted from +10% in 2000 to a net negative ESOV: they are spending less on share of voice than share of market.

"It's completely irrational to expect growth if you put that amount of budget behind the campaigns," Field said. "We need to put this case to executives if this is to be solved."

Field also had high praise for this year's Creative Effectiveness Grand Prix winner, Monty's Christmas, by adam&eveDDB for John Lewis – which cuts against the two big negative trends in creative effectiveness. The campaign showed a commitment to TV, budgeting for brand effects across the whole year, not just the two-month campaign period, and a smart partnership with a charity, Age UK.

"This campaign has grown John Lewis's market share from 22% to over 30% in just six years," he said. "The ROI is well over eight to one now. Those are stellar results. And this is all properly econometrically modelled – real data."

Warc subscribers can read all of the Lions entries here.

Data sourced from Warc