‘Marketers invest too much in short-term sales comms’

New research suggests the marketing industry is focusing too much on the short term and that this is having a negative impact on awareness, share of voice and sales.

Too many brands are taking a short-term view on effectiveness. That is the conclusion of a new report from the IPA released to coincide with its first Effectiveness Week.

The research, based on analysis of case studies entered into the IPA’s Effectiveness Awards, found that while the optimum campaigns have a 60:40 ratio of long-term brand building versus short-term sales activation, few campaigns are adhering to this.

On average, 47% of a comms budget is now spent on short-term activation strategies, up from 31% in 2014. But share of voice is down by 9 percentage points over a decade.

Les Binet, report author and head of effectiveness at Adam&EveDDB, says: “This latest research provides empirical evidence that our industry is focussing too much on the short term. The pendulum has swung too far in favour of brand activation, yet for truly effective advertising we must continue to invest more in long-term brand building.”

Part of the issue is the rise of owned and earned media, which has led many marketers to question the need for paid media. However, the research shows that awareness and penetration are still key in driving growth and profit; they are three times more likely to be the main driver of growth versus loyalty.

Yet it is the combination of paid, owned and earned that creates the biggest benefit. Adding owned media to a paid campaign typically increases the effectiveness of a campaign by 13%, while earned media causes a rise of 26%.

Scale is also important. Adding TV to a campaign increases effectiveness by 40%, making it the most effective medium and the one that is best at generating top-line growth that drives profit.

One reason for TV’s effectiveness is the synergy of live TV working with video-on-demand and online video. Brands will see a 54% in the average number of very large business effects by using them together, versus 32% for TV only and 25% for online video on its own.

Janet Hull, IPA director of marketing strategy explains: “Here lies the proof that the digital transformation has helped make mass media work even harder. It also proves that while it is good to have earned and owned media, for top-line growth brands must invest in paid-for, mass reach.”

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