For years, great creative was the marketing holy grail. Success was largely the result of the quality of the creative, not the underpinning insight or corresponding strategy. In fact, strategy was often used as a means to retrospectively prove the value of the creative idea. This isn’t to say that the industry didn’t want or value true insight, more so that research was used as an evaluation tool, rather than a powerful way to fuel strategy.
More recently, the explosion of data and quality of thinking around consumer insights has helped elevate the role of strategy. While there is some way to go before we reach the point where insight, strategy and execution exist in perfect harmony, today it is more common to see ‘insight fuelled strategy’, where audience insight is used as the springboard for the strategy. Both the insight and strategy are also clearly recognisable in the subsequent executions. With so much data available to develop powerful insights, this should now be the norm when developing strategy.
Demonstrating how audience insights have helped create the concept is something that clients have every right to expect from agency partners. Without this understanding and logic, we’re essentially still operating in the ‘Mad Men’ era.
But what’s next for world of strategy? A number of dominant and emergent trends help pinpoint how strategy is likely to change in the next few years:
- ROMI: justifying a return on marketing investment is now often a prerequisite for any campaign.
- Predictive analytics: the ability of data scientists to forecast the likely outcomes of marketing activities is a fast-emerging discipline.
- Behavioural economics: relatively lower costs of creating prototypes and beta versions is enabling people to implement more test and learn experiments.
- Performance-based remuneration: paid-for advertising is changing the way that clients remunerate many of their agencies, based on pre-promised outcomes.
Based on these trends, we are heading towards a situation where the quality and effectiveness of strategy will be assessed on the forecasted outcomes, not the retrospective results. Put simply, strategy will be expected to demonstrate the tangible improvements the thinking and work will deliver.
Great agencies will continue to create great work, but in future the creative ideas will be accompanied by a business forecast, to be approved by clients. Clients will continue to reduce their risk by asking their partners to structure fees and incentives based on how well they deliver against their own forecasts.
These changes present a new challenge for the marketing industry. How will we be able to forecast the outcomes of work before it’s even been launched? It will require a different mentality, focused on experimentation, optimisation and forecasting – rather than the outdated model of learn, develop and test.
A/B testing enables people to predict the potential of their ideas and, wherever possible, these kinds of live experiments will grow in popularity. Where this isn’t possible, market research can also have value in predictive analytics. Techniques such as choice modelling, econometric forecasting and behavioural science have the power to help clients understand the likely impact of their future actions.
So what do these changes mean for the industry as a whole?
- We will see clients holding their agencies accountable based on their predetermined forecasts vs. actual performance.
- This new approach requires a new kind of joined-up agency model. Agencies will need to work together to ensure data, insight, strategy, execution and forecasts are seamlessly aligned and integrated.
- Within organisations, business cases will change and evolve too. They will become anchored around the demonstrable improvements the work will drive, not just how good the strategy, concept or idea is.
This is an exciting time for the marketing industry. Demonstrable strategy will enable marketers to make more informed and robust decisions, while creating more credibility with the rest of the C-suite. We can expect the future to be less about ROI and more about how campaigns perform against their forecasts.
Chris Paxton is managing director at The Leading Edge.