Cathy Taylor, WARC’s US Commissioning Editor, summarizes the articles in the latest Spotlight, which takes a distinctly American look at marketing effectiveness.
It may be the most famous quote in American advertising: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
This article is part of the March 2023 Spotlight US series, " It's time to talk about marketing effectiveness” Read more
Attributed to John Wanamaker, the legendary Philadelphia retailer from more than a century ago (a similar quote is attributed to Lord Leverhulme elsewhere in the world), it remains a pertinent observation because so many marketers have so much trouble proving effectiveness.
But, increasingly, it doesn’t have to be that way. With the right pieces in place, that 50% of what works appears to be moving northward.
In WARC’s Spotlight US, we look at effectiveness from an American perspective, and at some of the latest thinking, structure and data that can be helpful in making sure the marketing conversation focuses on outcomes.
What does “effectiveness” mean?
Before introducing the Spotlight’s articles and authors, let’s answer the question you may be asking: Is the study of, and focus on, effectiveness any different in the US than elsewhere?
Admittedly, an answer can be tough to get at here, but a few things suggest that, historically, we are a country that sometimes doesn’t have the focus on effectiveness that some other markets do.
There are plenty of worthy marketing academics in this country, but the US industry at large doesn’t tend to revere effectiveness luminaries, even when their research can easily apply anywhere in the world. (For fun, try the following exercise: do a search on Advertising Age or Adweek for “Les Binet” and see how frequently his name shows up. Then do the same search on Campaign.)
And then there’s our overt focus on ROI, which can lead to confusion between effectiveness and efficiency. The latter persists as a pervasive proxy for measuring effectiveness, when, of course, it’s really a measurement focused on media cost.
One of this Spotlight’s authors, Frameplay chief strategy and operations officer Cary Tilds, puts the difference front and center:
Effectiveness is producing a desired outcome, while efficiency is achieving the desired outcome with the least amount of effort or waste.
For better or worse, that stands to reason, since the US is not only the world’s biggest advertising economy, but also the center of the vast global media buying industrial complex. There are the media agencies themselves, and then there’s programmatic advertising, an “invented here” offshoot, that has helped advance the endless pursuit of cheap CPMs.
But our Spotlight contributors are here to shift this familiar narrative, offering up the latest insights into how a heightened focus on effectiveness can be game-changing.
Structuring for success
In an interview on her company’s approach to effectiveness, Pam Forbus, Pernod Ricard’s North American svp/chief marketing officer, emphasizes the importance of structure.
Not only has the company put a rigorous system in place that measures campaigns at every stage, but it also believes in ensuring that insights and analytics sit outside of the marketing team.
“I've been a big proponent that analytics and insights should never report to marketing. But, in most cases, it does report to the CMO,” she says. “However, it's really difficult for that function to speak truth to power, to be objective, and be that truth-teller, when someone's got your career in their hands.”
At Pernod, it’s a three-way conversation among marketing, insights and finance – and that setup, in turn, leads to more transparency, and more support for the marketing budget. “I don't have to fight for my budget,” Forbus says. “I'm getting more budget next year, because I have a track record of showing that my marketing dollars drive growth.”
Effectiveness metrics and the chief financial officer
The relationship with the CFO looms large throughout this Spotlight as, especially during uncertain economic times, brands have to put extra effort into seeing their budgets are, at the very least, maintained.
Analytic Partners has recently been advising brands on how to make this relationship more productive. Fleur Sohtz, the company’s CMO, outlines her case in a “Letter to the CFO: Here’s why we should support marketing investment, together.”
In it, she cites data from Analytic Partners’ ROI Genome project to emphasize the importance of upper-funnel channels: “What [last-click attribution] doesn't do is take into account previous touchpoints, like linear TV or digital display,” she says.
“Nor does it introduce our brand to new customers. The average brand would lose as much as $50 million for every $25 million spent by optimizing toward that last click.”
In the WARC Talks podcast that is part of this Spotlight, David Beaton of Crater Lake & Partners cites another reason there can – and should – be a deeper connection between the CFO and CMO: It helps combat ad fraud.
How does this work in practice? Because, Beaton says, effectiveness metrics can uncover clear disconnects between how a campaign seems to be performing – especially in the online universe – and how that translates into hard objectives, like sales.
Often, that gap means bots are polluting the media buy. Optimizing budgets against outcomes instead of costs, by contrast, can make bots irrelevant. “I think the CFO can be the most powerful ally that a marketer can have, because they are focused on bottom-line impact. Both the marketer and the CFO have a fiduciary duty,” Beaton says.
Looking at the “how”, not the “why”
When discussing effectiveness, it’s not just about the “why”, but the “how”, and two articles in this Spotlight take a closer look at how measurement needs to be refined to expand what’s possible.
In the article, “When measuring the effectiveness of media channels, one size does not fit all,” Frameplay’s Tilds observes that more nuance is finally being brought to how effectiveness differs among media channels.
“Instead of focusing on media cost, brands should ask themselves which channel, targeting and creative strategies are working the best against their objectives, whether it be growing in-store traffic, increasing online sales, or creating the ultimate end-to-end brand experience,” she argues.
Tilds points to advancements like the Interactive Advertising Bureau’s (IAB) recent move to refine metrics around intrinsic in-game advertising – including requirements such as engagement within game play – which take into account the unique characteristics of that specific environment.
Furthering that thought is the article, “Using attention metrics to drive effectiveness: Four dimensions brands need to know about.” In it, Max Kalehoff of Realeyes explains that the most promising effectiveness measurement advancements will be those that focus on media and creative attention simultaneously.
“Scoring the attentiveness of a piece of creative within the context of a specific media environment is becoming a new standard metric,” he says. “Assuming a media environment delivers an attentive audience, the creative … must capture and sustain attention in order to have a chance at persuading.
“Hence, understanding the intersection of creative and media attention is equally as important as understanding either in isolation.”
Effectiveness in the real world
Finally, this Spotlight takes a close look at the Grand Prix winners of the recent North American installment of the WARC Awards for Effectiveness, showing what effectiveness looks like in the real world.
The biggest takeaway: Keep it simple, even though that can be hard. As jury chair Cheryl Guerin, evp/global brand strategy and innovation of payments firm Mastercard, explains, “Great ideas don't take long to explain. They're really simple: What is the understanding? What's that insight? How does it manifest itself in a brilliant idea?”
Yes, there’s a lot to unpack in this Spotlight. But its overall message is clear: A focus on effectiveness, rather than just efficiency, opens up major new opportunities.
Read more in this Spotlight series
Letter to the CFO: Here’s why we should support marketing investment, together
Pernod Ricard North America’s Pam Forbus discusses how marketers can put the focus on effectiveness
Pernod Ricard North America
When measuring the effectiveness of media channels, one size does not fit all
Using attention metrics to drive effectiveness: Four dimensions brands need to know about
Why they won: WAFE North America jury chairs Pam Forbus and Cheryl Guerin discuss the Grand Prix winners
How measuring effectiveness combats ad fraud