Efficiency will trump effectiveness until success is better measured

Effectiveness is a matter of marketing management.  A framework is the best way to ensure brands are doing the right thing, not just doing things right.

What is the first duty, and the continuing responsibility, of a business manager?

The question was first posed in Peter Drucker’s iconic 1963 article ‘Managing for Business Effectiveness’. His answer was “to strive for the best possible economic results from the resources currently employed or available”. For marketing managers, first duties and continuing responsibilities ought to be no different. Marketing is a business function, after all.

Going by the staggering amount of nonsense that came out of Cannes, few among the supposed marketing cognoscenti seem to have realised this. Instead, they were heard waxing lyrical about how the most important thing for brands is to “connect with GenZ by harnessing story-living”, among other things.

As the late Christopher Hitchens liked to say, it is enough to make a cat laugh.

Seemingly further detached from reality with every passing year, the Cannes Lions festival is becoming better known for its puerility, platitudes and pointless CMO posturing than marketing, advertising or effective creative work.

The awards are still there and still provide a nice revenue stream for the organisers. Entering a campaign costs, depending on the category, between €550-1,885. Whether the winning entries are effective is a completely different matter. New research from the IPA and Gunn Report shows recent creatively awarded campaigns of are less effective than they have been in 24 years of collected data. In fact, they are no more effective than non-awarded campaigns.

Hardly surprising, of course, when all it takes to win a Bronze award in print is to take an image off Shutterstock. I wish I was kidding.

So how do did we end up here?

It is said by many that marketing performance is now synonymous with performance marketing. According to the aforementioned IPA report, the percentage of short-term campaigns receiving creative awards has risen to almost 40%. Until 2010 that figure had remained below 5%.

The long and short of it

Short-term campaigns focus on efficiency over effectiveness, typically by targeting consumers with established affiliations to the brand and imminent purchase intentions. In order to create a sales boost, purchases are pulled forward. However, the void left is seldom wholly filled, which means an inevitable sales dip after the campaign has ended. Matters are then made even worse by competitor response campaigns.

Long-term campaigns, conversely, focus on effectiveness over efficiency and all kinds of buyers – be it light, heavy or those who do not yet have any established affiliation to the brand. Penetration is the name of the game. This in turn, due to negative binominal distribution found in consumer purchase patterns and the law of buyer moderation, tells us to prioritise net reach over targeting. Done correctly, effective marketing will increase baseline sales over time. The question is, how long you can afford to wait?

Marketing, in other words, requires management of efficiency and effectiveness. To ensure the best possible economic results from the resources currently employed or available, the short-term and the long-term must be balanced on a strategic level.

Marketers are confusing efficiency with effectiveness, prioritising what is urgent over what is important and what is easily measured over what is crucial to know.

Unfortunately, despite readily available advice on how to do it, Cannes and a seemingly endless array of industry reports tell us we are failing woefully at the task. Marketers are confusing efficiency with effectiveness, prioritising what is urgent over what is important and what is easily measured over what is crucial to know.

There are, of course, many potential reasons why, ranging from individual career progress to pure ignorance.

However, we must also acknowledge a rather sizeable elephant in the room – there is yet to surface a universally agreed-upon definition of what effectiveness really means. Though it ought to be a measure of long-term business effects, many brands simply define it as whether what they are doing ‘works’.

Lately, this has morphed into how well a brand achieves its goals. But what if the goal is to increase efficiency? An objective, in and of itself, rarely says anything about its inherent value (or lack thereof) for the business and thus little about the wisdom of trying to achieve it.

A framework for the future

As Drucker put it in his seminal piece, “it is fundamentally the confusion between effectiveness and efficiency that stands between doing the right things and doing things right. There is surely nothing quite so useless as doing with great efficiency what should not be done at all”.

If brands want to ensure they are doing the right things, not merely doing things right, they should establish an effectiveness framework within the organisation that takes both short and long into account. Once they have defined what they mean, they can identify and agree upon what is required to measure, evaluate and forecast.

Effectiveness is, clearly, a matter of marketing management. The industry needs to stop pouring money into areas where even extraordinarily successful performance ends up having minimal impact on overall results.

Sure, it may be efficient, and some might even call it effective, but it is strategically, not to mention financially, pointless.

It is painfully obvious to see once you take off your rosé-tinted glasses.

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