Trends for 2019: Effectiveness wins the battle over efficiency

This prediction might be more wishful thinking than based in reality, but there are signs 2019 could be the year marketers succeed in getting their businesses to prioritise effectiveness over mere efficiency.


Over the past few years, we’ve seen forward-thinking brands integrate marketing effectiveness into their strategy. That has come in the form of effectiveness units, as was the case at Telefónica and Direct Line; effectiveness tools, such as Catalyst at Diageo or cockpit at L’Oréal; or insights and analytics units, as at Samsung.

These brands are held up as examples and invited to speak at events on marketing effectiveness precisely because they are leading the pack. Yet too often marketers still speak about efficiency, not effectiveness, and rely on digital attribution or short-term return on investment to measure the impact of their advertising; rather than more holistic methods of measuring how marketing creates profitable growth, such as econometrics.

READ MORE: Efficiency versus effectiveness – Why marketers need to move beyond ROI

For an example of the former we need only look at Next. It has pulled money out of TV advertising and placed it online based on a metric it calls ‘internal rate of return’, which is calculated from net cash flows from each campaign. Outflows include cost of creative and media, inflows are the profits of incremental sales. There’s little room here for top-of-funnel measures; it all comes down to conversion.

However, with increasing amounts of data at their disposal (and a growing number of consultants that want to help) more marketers are starting to measure what matters, not just what is easy, and retool their investments around both short- and long-term metrics. That has required hiring people (often difficult to find) with different skill sets, and these teams are starting to embed themselves within brands and really have an impact.

There is also growing pressure from the boardroom to prove that marketing investment leads to business outcomes. That will only increase next year as economic uncertainty in the UK continues (unless a Brexit deal miraculously appears that immediately creates a stable platform for global trade), weak consumer confidence hits spending and businesses watch costs.

Those marketers who shift attention to effectiveness will reap the rewards. According to a study by Ebiquity, if brands better allocated their marketing spend there would be an opportunity to increase business profitability by a combined £34.2bn annually. That gives an idea of the scale of the opportunity for marketers that take effectiveness learnings and apply them to their business. And it’s one the rest of the business will appreciate too.

To read more of Marketing Week’s trends for 2019, sponsored by Salesforce, head here.

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