Marketers have always had to overcome advertising scepticism. But new research suggests they are losing faith in the very tools they use for proving the doubters wrong.
According to the latest survey from the Institute of Practitioners’ in Advertising (IPA), clients are becoming increasingly dissatisfied with the methods used for measuring above-the-line advertising effectiveness. It goes some way to explaining the growth in direct response advertising and an almost Holy Grail-like search for greater accountability.
The survey of 115 Incorporated Society of British Advertisers (ISBA) members reveals growing concern about existing evaluation techniques, so essential when it comes to justifying budgets internally. It comes at a crucial time, with marketing departments increasingly squeezed by boards demanding cost savings and agencies struggling to deliver them.
Frustrated marketers’ complain in the survey: “There are so many conflicting measures”, and “The age-old problem of commercial clutter has only got worse. Isolation of any one effect is increasingly difficult”.
One respondent comments: “It’s often difficult to find measures that everyone in the company buys into.” Another says: “The advertising payback analysis methodology that has been developed is inefficiently convincing for advertising sceptics.”
The IPA is committed to addressing these concerns. Last week, it held its first seminar with the Market Research Society to bring clients, agencies and market research companies together, and aims to make this a regular part of its activities. A research project has also been set up with the Marketing Council and the London Business School to study marketing effectiveness.
The issue of accountability dominates the marketing industry in the late Nineties. Many companies have looked at their internal workings, restructured, engineered their products and processes to iron out defects. Now they are turning their attention outside – to service providers.
Gary Duckworth, convener of judges at the IPA’s 1996 Advertising Effectiveness Awards and chairman at Duckworth Finn Grubb Waters, says: “In marketing and in business in general people are more questioning about all forms of cost and all forms of investment. This has had an impact on advertising as much as everything else.
“There is also a whole new set of advertisers in the market, such as banks and building societies, with something to sell that involves people, rather than just a product on a shelf. Assessment means having quality information, and in these markets – for example if you are selling mortgages rather than packaged goods – there isn’t the wealth of research data such as Nielsen.”
Janet Hull, IPA director of advertising effectiveness, says advertising is increasingly a part of a multi-faceted communications programme, making it harder to isolate its effect. Ironically the survey shows that there are also levels of dissatisfaction with evaluating other marketing services including direct marketing and public relations.
“The whole communications process is getting ever more complex. There are many more ways for marketers to distribute money,” says Hull.
But doubts remain. John Williamson, director of consultancy at design agency Wolff Olins, voices the scepticism displayed anonymously by many of the marketing directors in the survey about a convincing correlation between sales and advertising impact.
“Advertising agencies drive the marketing strategies of their clients. They had an easier time in the past. But business has changed. We will see different sorts of successful brands emerging, based on simple strong ideas (such as Virgin, Orange and First Direct), rather than just a quality mark or a bundle of product features. The idea builds the brand whatever the medium.
“You can test awareness, and how people feel about a brand, but this does not necessarily mean they will act and buy it. You can test the ad against the brief, but that doesn’t mean the brief is right.”
But Duckworth counters: “For some peculiar reason advertising is always called upon to justify itself, in a way that a company would never expect to do with its training budget or IT budget.”
Winston Fletcher, chairman of Bozell UK, and chairman of the Advertising Association, believes more investment in developing client-friendly research techniques is required. “Marketing directors believe that when measurement in different areas of industry such as productivity and stock control have developed to almost a scientific process, they are surprised that the evaluation of advertising has not progressed to the same degree,” he says.
But pushing research methods further and developing appropriate techniques takes time, talent and money. Econometric modelling has been used in entries for the past four IPA advertising effectiveness awards.
It studies a huge range of variables which might affect sales and operates on the basis of a process of elimination. Meridian and Scottish TV have started to collate “single source” data, measuring what ads people watch and then what they buy.
Tim Broadbent, Young & Rubicam’s joint managing partner and head of planning, defends Britain’s evaluation techniques as the best in the world. “It’s not the techniques that are the problem, but the clients’ lack of will.”
He points to the growing climate of short-termism in companies, where the only result which counts is an immediate sales increase, and to the decline in the importance of research, which is being outsourced by more and more marketing departments as it drops down the list of priorities.
“If marketing directors are only going to last 12 months if lucky, they are more likely to go for sales promotion and price cuts and spend relatively less on brand building,” says Broadbent. “Why should they do something for the health of the brand in five years’ time, which will be three marketing directors down the line?
“A large part of the impetus for measuring effectiveness comes from advertising agencies. ISBA doesn’t publish studies or give out awards, the IPA does. We look after the brands and the brands survive much longer than the marketing director.”
The agencies are understandably concerned about a lack of credence given to research – it is after all, how they defend themselves in the face of progressive attempts by clients to force down costs. Fletcher says: “The advertising industry should be confident enough to do everything possible to measure the results and not play ostrich.”
The IPA is, perhaps surprisingly, encouraged rather than despondent about the results of its latest survey. It sees the trend as a positive one, with clients becoming more questioning and more discriminating, and agencies putting more effort into research. It hopes this will prompt debate and ultimately lead to marketers being better armed against those who question the effectiveness of advertising.