A challenging, well reasoned case on advertising effectiveness | Blog thoughts from Randal Dobbs of Framework Marketing on WordPress.com
- March 24, 2017
- Damien Venuto
Peter Field is one of the world’s foremost experts in advertising effectiveness. And he’s very worried about the current trends, so much so that he has decided to become slightly more confrontational in an effort to counteract the high concentration of bullshit he sees in the market. He’s looked at decades worth of case studies through the IPA Databank and figured out how the best brands build profitability, and he believes the current focus on short term activation metrics over long-term business effects is a very dangerous shift. He was in New Zealand as a guest of CAANZ and TVNZ and he spoke to StopPress editor Damien Venuto about the magical 60/40 rule, the need for big brands to use mass media, the role of social media for brand building and the slick and very successful PR campaign that has been waged by the rather secretive digital behemoths.
Damien Venuto: In the lead up to any interview, I always have to do a bit of Google stalking, and I noticed that one of the first things that came up with your name was that you’re regarded as the godfather of effectiveness. So, how does one gain that title?
Peter Field: Do you know, I wish I could answer that. I don’t even know who first coined the expression. It might have been someone in Australia, but it might have been somebody in London. But, I mean, I’ve spent the last 10 years or so reading case studies, analysing case studies and analysing the database in case studies. So everything I do is all about effectiveness and I guess I probably do sometimes come over a bit gangster about it. So I love it, I think godfather is a great expression and one day I’ll get the whole piece and dress gangster, but …
Just as long as I walk out of here with my kneecaps, Peter, that’s all I’m hoping for.
Exactly, no horse’s heads in the bed.
So effectiveness is a very big interest of yours and it comes at a time when people perhaps aren’t talking about it as much as they used to. So, why is it that effectiveness is such an area of interest?
I think a lot of marketers around the world have discovered in recent years that something seems to be wrong. They’ve been doing everything that they were told they should do. During the digital revolution they put their money into social, into search, playing with big data. And yet, increasingly, many of them are finding that they’re just not getting the kind of growth and returns that they expected and once enjoyed. So I think there is a growing realisation that there is something broken in marketing. And the data I work with absolutely echoes that. We’ve had a kind of 20 year run of improving results. We’ve seen campaigns increasingly learning the tricks of the media landscape and learning how to use new media and getting better and better results. All of that stopped sometime around the beginning of the global financial crisis.
So 2008? Like round that area?
Yeah, around about then. Sometimes it’s difficult to pinpoint exactly, but at some point around about then, suddenly all the effectiveness indicators started turning down. So clearly something wrong was going on, and I put it down most centrally to an obsession with short termism and short term results. And this has been the biggest single factor, I think, that explains why the wheels seem to be coming off the marketing machine. And it’s for two reasons really, because when you get short term, it changes two things: the kind of strategies you pursue, the kind of things you want to say about your brand and it changes the kind of media choices that you make.
So you choose strategies that work most powerfully to drive short term sales now, so they’re going to be what I sometimes refer to as activation messages, behavioural prompts. Could be a deal or an offer or perhaps a seasonal message. Or some reason why you should just damn well go out and buy it now. And, so you do more of that and you do less of the kind of thing that builds preference for the brand in the long term. Those usually emotional kind of sells that mean that next year’s sales results are actually going to be easier than this year’s were, because people have started to really like my brand and warm to it and they want to buy it. I don’t have to keep selling to them all the time, they actually want to buy.
So you start to change the messages from brand building towards activation, but you also choose media channels, you make media choices that are also geared to short term selling. And of course, that plays very conveniently to the world of digital, because digital happens to have some immensely powerful activations tools: search, the whole pay-per-click kind of world is a hugely powerful way of activating sales in the short term.
Yep, definitely. It kind of feels like relying on gambling to earn revenue. It might work in the short run sometimes, but in terms of a long term strategy, it perhaps doesn’t work that well?
Yeah, to a degree. Putting money into short term sales activation is of course very sensible. No company can sensibly try and live exclusively in the long term. We’ve got to make sure we’re not just making sales next year easier than this year, but also that we’re getting the most out of our increasingly, hopefully, valued brand by consumers. So you have to do long and short term pieced together. It’s a question of balance, and that’s the problem: the more we live in this short term world, the more it has become imbalanced.
And we’ve seen billions of pounds, billions of dollars, pulled out of brand building messages and brand building media and moved across into activation messages and activation media. And that has been driven, I suspect, by a number of factors. We can’t blame it on any one. Partly the risk averse mood that followed the global financial crisis, when I think a lot of CFOs and CEOs said “Look, this long term piece is a luxury. We just need to get down to survival.” And that unfortunately hasn’t changed. It hasn’t bounced back in the way it usually does after recessionary periods.
So what does that do to creativity when-
Completely kills it. I mean this is the trouble. Creativity is the single most valuable thing that we can harness for long term sales. There is nothing else we can do, period, in terms of what we say and the media choices that we make that can come close to the extra value that highly creative ads can bring. Highly creative campaigns are an order of magnitude more effective than non.
But all of that only plays out in the long term. In the short term, they are, if anything, less effective than non-creative campaigns, because what works best in the short term is a very bald, unvarnished message that just gives you a reason to go and buy my brand. I’m not going to try and seduce you with creative, emotional stuff for the long term, I’m just going to tell you to god-damn well go and buy my brand and I’ll probably re-target that message at you a dozen times until I’ve beaten you around the head so often you just buy that brand. That’s where you get.
I suppose the one counter argument that somebody might have is that they could raise the example of a brand that’s done incredibly well in the digital space, like a young brand that’s emerged in the digital age and only is digital to grow and to develop. So Karma Cola would be an example over here. Internationally I’m sure you have a few examples in the UK as well. What would you say in that regard?
Here’s the interesting observation, that what we see globally, more and more, is that these brands that built themselves and created themselves on the internet increasingly are turning to good old-fashioned mass media to maintain the momentum. Because when you’re young and unique, and particularly if you trade in the digital space, of course you don’t need off-line media to do that. But there comes point when actually to maintain the momentum, and to conquer new categories, as many of these have to, to broaden your sales pitch, that you suddenly discover the benefits of mass marketing and mass media. And they are very considerable.
So, we have in the UK both Google and Facebook major advertisers in traditional media: TV, outdoor-
It’s the great irony.
It’s the great irony, and these two organisations both told us in their past that they were going to kill advertising, and yet they are both now, essentially, conventional advertising media. They are selling space for the kind of advertising messages that they once said they were going to kill.
We’ve seen a growing trend of marketers either pulling back on television advertising or pulling back on magazine advertising, pulling out of newspaper advertising entirely. Do you think that they’re doing this to the detriment of their long term strategy? Do you think that it might be an error to act so hastily in terms of pulling that budget out?
Yeah. Well, what we do know, is that the most successful campaigns tend to combine on and offline. So, yes, sure we need diversity in the media, within reason. Depends on our budget. If we have limited budgets then frankly spreading them across too many media channels is probably not a good idea. But what we do know that there are great multipliers and synergies that can work if we mix online and offline sensibly and judiciously. So, to some extent, perhaps the reallocation of funds and experimenting, creating multi-channel campaigns is sensible. But the entire withdrawal … What I really question is the completely unfounded belief in a uniquely digital future. Because we already know that’s not going to be the way it plays out. We know that successful brands will coexist across both digital and, for want of a better word, analogue, platforms.
But increasingly this is becoming an irrelevant distinction. I work in the UK with news brands, so they were once just a print medium, but now there a print and online medium. The question is what they deliver to the consumer, which is reliable news, which, heaven help us, we really need in the modern world. And that can be delivered in a number of ways. Sometimes I might want to read it on my tablet, sometimes I might want to read it in print, and so on and so forth. Actually, the delivery platform is not always as important as we sometimes think it is, but, yeah, I would generally strongly caution any advertiser from withdrawing wholesale money from proven, established traditional media, in order to put it into what are in many instances actually not fully proven digital media.
It’s also at a risk of the brand’s safety. Because I mean this week you’ve read a few scandals with brand ads ending up on extremist websites, on dubious websites, on controversial websites. So, you don’t get that when you go to a trusted source, I suppose.
No, I mean this is the problem with the kind of programmatic algorithm driven way of thinking is there just are none of those human checks. There’s no kind of common sense thing. And I’m sure the guys at Google and Facebook will say “Yeah, but we’ll get there. We’ll get the killer algo going one day that will be able to make these artificially intelligent decisions.” But in the meantime, we’re going to be witnessing an awful lot of very dodgy media placements. So in the UK, the UK government has pulled advertising from the Google platform because they were discovering that Royal Navy recruitment ads were funding terrorist organisations [other big brands like HSBC, Lloyds, RBS have boycotted Google and others like Sky and Vodafone are looking to follow suit]. So when you get these kinds of misplacements, when you get household family brand names appearing on kind of pornographic websites, places they would never have allowed any human being to put them on, then you realise you’ve got a problem. But of course the problem requires human intervention at the moment and this is the one thing that the digital platforms have been very reluctant to commit to, because they know there’s a big cost.
Massive cost. To update a blacklist every day is not an easy task.
Absolutely. But with great authority and influence comes great responsibility and they’re very happy to accept the authority and influence but they’ve been much less happy to accept the responsibility that comes with it. So they are, I think, going to be forced … Well they can either accept this willingly and embrace the need to change themselves, or sooner or later I think government regulators will force them, if they don’t, to find some way of cleaning up this act. It’s going to happen.
What is interesting is that you’ve also seen, with the rise of Google and Facebook, you’ve seen the use of the language of effectiveness being used in the PR of digital.
So you have things like “targeted” being used, “cut away the fluff”, “focus on the consumer that matters”. What are your thoughts about that, because it does seem like a very clever PR game.
Oh yeah, it’s a very seductive … And of course, I’m not saying that tightly targeted communications don’t have their value, but unfortunately their value lies exclusively in the short term. If I want to activate short term sales, then if I’ve got a highly targeted digital database that is a very effective and efficient way of doing it. But unfortunately, the long term success of brands relies on very broadly targeted broadcast media. Because we need to be bringing consumers into our brand. We need to be warming them up to our brand way ahead of purchase, long before they get round … And if we don’t do that, we end up with a kind of bidding war for that last moment of the decision. And that is an extremely damaging and dangerous prospect for a brand name.
The whole point of mass marketing is it gives you options. You create desire for your brand and there are many impressive case studies whereby building the brand actually … The brand owners have been able to reduce their expenditure on things like search, for instance. Search is very much about the short term, brand building is very much about the long term. So if you create a culture of short term measurement, it plays very strongly to the world of digital and digital tools. It’s been very convenient.
Doesn’t the whole dynamic of marketing create a bit of a problem in the sense that marketers tend to stay in a single job for, say, 18 months and they need to drive results in that month … In those 18 months, in order to get a good reference letter.
Absolutely. Yeah and it’s not just CMOs, it’s CEOs and everyone. This is the problem, the tenure of the job means that often they have no incentive to be long term. I think there is a growing mood amongst the investment community round the world to say “Look, CEOs really should not be rewarded for taking short term decisions.” Their bonuses should somehow reflect the value they add to that business over the medium to long term. That’s yet to work its way through, but it’s certainly the beginning of-
Can you imagine the CEOs biting back against that a little bit?
Yes, absolutely. It needs to happen. One of the great benefits that family owned businesses, like a number of German businesses, or indeed the Mars organisation, is that these are not organisations that are going to take the long term value of their brands and businesses lightly. They will not thank anyone for exploiting for short term gain, sacrificing the long term success. See, family often have a great advantage because they inherently have this in-built desire to nourish the long term, to preserve it for the future-
You can’t leave your family, I suppose.
Absolutely. And conventional commercial businesses need to get some of that going for them as well. We’ve become far too driven by short term effects and short term success.
You’ve spoken a little about your 60–40 rule for effectiveness. Do you want to elaborate on that a little and just explain it?
It’s in many ways a very simple analysis, but it seems incredibly robust. It’s been robust over time and it seems to be robust from category to category and even geography to geography. There is some kind of optimum balance, and it may vary slightly from the 60–40 rule, but if we want the most effective and sustainable campaign for business success, we should be spending about 60% of our budget on building long term, brand driven success. So working on positive associations with our brand, making consumers like and want our brand. And the remaining 40% we should be spending on short term activation. So, essentially exploiting this growing sense of popularity we have in our brand in order to drive short term sales. And time and time again we find … You can look at campaigns across a number of metrics for success, long term success, and always you come to the same conclusion: it was the ones that did the 60–40 balance that were the top achievers. So there seems to be some real robustness in it.
So we make that suggestion, but we already know, in the UK, and I’m sure in New Zealand as well, that the typical advertiser has already drifted way beyond that. They’ve gone way beyond 40% of the budget on activation. Search is huge. It’s already, in the UK, almost without question, bigger than TV. In New Zealand about half a billion dollars a year is going into it. In the UK it’s something like £4 billion going into search. These are enormous sums of money, and some of that, or course, is sensible. But my point is, it’s too much. No sensible business should be spending these enormous kinds of percentages of their budget on search. There’s a good case study from the UK, from Easyjet, who are a discount airline very much an online model. And part of the value the got from their brand building campaign was that they were able to reduce the share of their budget they spent on search from the kind of low-30s percent down to about seven percent. And that is one of the benefits of having a strong brand. You don’t have to spend so much on driving that last click, if you like.
Because people will go to your website.
They go to your website anyway, they’re already predisposed. You don’t have to keep retargeting them all the time and throwing offers at them … They’re very favourably disposed to you. And for a mass market brand, that is always going to be the most efficient way in the long term.
Another thing that you have spoken about in the past is how the effectiveness of creativity has decreased over time.
So, it was previously incredibly effective and if you look at creative advertising today, it’s not nearly as effective.
So what we’ve seen over the last five or six years is essentially a halving of the enormous creativity bonus. So if we go back about five or six years, then typically a highly creative campaign was about 12 times, I repeat that, 12 times as effective as a non-creative campaign. That’s halved to about six times. And if you look at that, it is simply down to short termism requiring and developing those campaigns to work in a very short time frame. Because creativity takes time, really, to deliver its full benefit-
It makes you feel uncomfortable when you first see it.
… the magic it works on the brand. Sometimes that is the case. I’m not saying they won’t work in the short term, but they really deliver their benefits over the long term. And we just don’t tend to see that in the short term, so the more we constrain creativity to work in the short term, the more we neuter it. And that is happening again on a big big scale.
In the past 12 months we’ve had three thinkers in the advertising industry passing through New Zealand. We’ve had Bob Hoffman, we’ve had Mark Ritson and now we’ve had you. And I couldn’t help but I read an article in Digiday about the “Rise of the Truthers“. And they said that we basically have an analogue fringe of conspiracy theorists questioning everything that’s happening in digital. How would you respond to something like that? Especially given that everything that you say is backed by facts.
Yes. Well, no organisation or no media should be worried about scrutiny and cross-questioning. If they are worried about people questioning then they’re hiding something and they’ve got something to account for. And I like Mark Ritson and I like Bob Hoffman. I just happen to look at a lot of data and a lot of evidence that suggests that there’s a lot of stuff being oversold in the marketplace. I’m not saying remotely that digital is valueless, it clearly isn’t valueless. I just think it has been over valued. I see too much money chasing channels that are in some instances not fully proven and are often being misused. But they’re being used often in the way that we were told we should use them.
So when we look back over the last 10 or 20 years of the digital revolution, we’ve seen some amazing u-turns by media owners. On the one hand telling us that broadcast media was dead and it was all about one to one and then we see, very recently, a major global advertiser, Proctor and Gamble who finally were courageous enough to take Facebook at face value and try that experiment, only to get their fingers, commercially, horribly burned.
So we’ve been given an awful lot of false certainties over the years. And the organisations themselves have often changed their points of view about this quite radically over those years, but I’ve never, to the best of my knowledge, witnessed any kind of apology about that, it’s a funny thing. They never said, “guys, we’re sorry, we got it wrong. We don’t actually think that reach and mass marketing is dead. We know we once said that, but we’d like to apologise to you, because we actually probably misled you.” We don’t get any of that. We just get the new certainty that is going to ignite our sales again. And I think we’re all getting to the point now where we’re saying “How can we trust this?” You know? “How can we be sure that this time you’re right?” And that’s a legitimate question to ask.
Especially when you have a string of continuous metrics issues that are emerging.
There’s huge amounts of online fraud of course, through bots and what have you. Endless nefarious organisations who are of course the most creative of users digital that there are. So there are lots and lots of reasons why we should all be extraordinarily wary of anything we do and any dollar we put online. For no other reason than there’s a lot of bad shit going on out there, frankly. And we should, and we have a right to expect safeguards and transparent metrics that enable us to scrutinise what’s going on out there. You know, it’s got nothing to do with Facebook or Google. They’re not doing the bad shit, it’s the criminals and terrorists out there. But they are our interface and they need to help us protect ourselves from them.
So there is, I think, a perfectly legitimate reason why we can all expect greater transparency and, frankly, a bit more help, in getting to grips with the quite daunting uncertainties of the online world. It is not the paradise we were once sold it as. The online world has rapidly turned out to be really quite a dark world in many many ways. And we increasingly have to struggle to get the good stuff out of it and not be endlessly taken advantage of by the bad stuff.
So we need help. We need transparency, we need metrics, we need organisations who really care about this and face up to their responsibilities that their enormous power and clout should give them. So I think there’s a lot needs to change, personally.
It does seem to some degree that the PR blanket is slowly being pulled off, and it’s being exposed for what it is: a media channel that has its problems and it has its advantages really.
Yes, and there are many great advantages to social media and in many ways I’m a great fan of it. I think, used properly and in the right way, it can be a huge contributor to success. Ditto, search, ditto, online video and so on, these are potentially powerful media. But the trouble is that we’ve not been given clarity about how to use them. We haven’t been given, in many instances, wise advice. And nor have we been able to work with metrics that enable us to make fully informed comparisons with other media and other channels. So there’s a lot that needs to change if we are going to allow logic and reason to inform our media buying.
So last year we saw, like you mentioned, Marc Pritchard coming out and setting a challenge for digital to sort itself out. Do you see that evolving this year? Do you see more marketers coming up and challenging their digital partners to do that?
I do. At this precise moment there’s a lot of interest in the whole idea of the bad stuff that’s been going on out there and that, I hope, will come to pass. I hope there will be a response to that and we’ll be able to, to some degree, return to safety. But the other issues remain there, about what digital delivers of commercial value to marketers and the metrics that go with that. And I think that is again something that really needs to be worked on. We need comparable, audited, transparent data to work with, so that we can make a comparison between a TV buy and, say, a social buy. Or between a YouTube buy and, say a radio buy or whatever. We need some way of being clear about this and at the moment it’s difficult.
What do you think it would take to get that level of clarity? Or is that just something that the marketers are going to have to work out themselves?
It takes only the enthusiasm of the key players to offer it, and I still don’t understand what they’re offering. Clearly there is an enormous demand from marketers who are increasingly getting hacked off with what’s available. In most businesses, if you know your customers are unhappy, you do something about it. You understand their needs and you move to meet them. I just don’t get it. I do not understand why Facebook in particular, but also Google, seem to be dragging their feet over meeting the perfectly legitimate requests of advertisers who are pumping billions into their businesses. I mean, “Hell, these guys are trying to tell you something, shape up.” I don’t see how they can ignore them for much longer and I would have thought it’s much better to enthusiastically espouse the need to change and to be shown to be enthusiastic and responsible than it is to be dragged kicking and screaming all the way to change. But that, quite possibly, will have to happen.
Do you think that there’s some concern among marketers to criticise Google and Facebook on account of sounding like a Luddite or somebody who’s against technology, essentially.
Yeah, of course this is the way it’s played. Somehow to criticise the duopoly is somehow to be a heretic in some way. That you are some hokey kind of individual living in a straw covered field somewhere in the middle of nowhere. And I think that’s a completely unfair kind of accusation. Many of the people, myself included, who remain critical of the way many of these big players operate, are also their greatest fans. I’m a big believer in, as I said, social and online video as an advertising medium. I would very much like those media to be tradable in and for us to have open, honest, fully accountable data to work with. Because I believe they have a success story that’s worth telling. But eventually you kind of get annoyed with the way they’re playing it. So it’s a crazy situation, it’s a crazy game and it has to change.
Are you optimistic that things will come right, or do you think it’s going to take some continued criticism in questioning what’s happening?
I think we’ll see a little bit more criticism, a little bit more arguing. But I am optimistic, I think things will come good in the end. Don’t ask me about timescales, but I think it will happen. I think it will have to happen.
Well, Peter, from my perspective, that covers all the questions that I had jotted down, but is there anything else that you’d like to add to the conversation that you think is quite relevant that people might want to … That you think people might find interesting out there?
I suppose there’s a big issue around trust, and we had begun to talk about trust. And I think there is a certain amount, again, of misinformation about the fact that consumers no longer want to engage with brands in some way. I question that to some degree, I really do. I think it’s just that brands have slightly lost their way in recent times. Brands still have an enormously valued role in life. Those who would suggest to us that we are in an information-driven age and that we’re able to make perfect and informed decisions clearly have never done the grocery shopping.
If you are faced with accompanying a couple of screaming kids around a grocery store, with half an hour to make 50 purchases, you do not have the time, the interest or the inclination to make fully informed purchases. You are going to make purchases driven through gut feel, instinct and habit and all the rest of it.
You’re not Googling the alternatives on your mobile.
You’re not going to do it. You’re using what the neuroscientists call heuristics to enable you to make mental short cuts. And that will involve conjuring up all sorts of memories, half memories and half impressions that you’ve picked up about brands that you may or may not have bought before. And that is not going to change because we live in the real world. That’s the truth. So brands are, I think, just as important as ever. The more we are bamboozled by choice, and we are overwhelmed with choice in many markets, the more important it is, actually, to have a strong brand. And the fact that there may have been some declines in trust for those brands, I think, is in part a reflection of the fact that many of the marketing practises in recent years have started to disturb consumers. Particularly how we use their data. We know consumers are very angry … It’s been one of the main reasons whey we’ve had the ad blocking revolution. It’s just consumers’ real disgust at the way their data gets bought and sold.
It’s an uneasy feeling.
And that could end tomorrow. We should just stop damn well doing it. Data is not as valuable as we thought it was. Because consumers don’t like us using it in the way that we once thought we could.
You touched on behavioural economics, but it’s a very rational argument. If you send somebody something that you think they want to buy, they’ll appreciate that. But these things aren’t always rational.
It’s not your buddy knocking on a door offering you some milk.
Absolutely. And it’s everything within reason. But if I do a search for a washing machine and for the next three weeks of my life I get endless re-targeted ads for washing machines, I’m going to get bored at some point. Particularly, I’m going to get bored the moment I’ve made the purchase and I’m still getting the goddamn re-targeted ads. And it seems to me, for what is supposedly such an intelligent system, it seems conspicuously dumb. But again, just a lack of controls on the volumes of ads served to people and the relentlessness with which it’s done. And these things all need to change.
Peter, it’s been an absolute pleasure talking to you and I really appreciate the time you’ve taken.
And you Damien.
Originally published at randaldobbs.wordpress.com on March 30, 2017.