More than a third of marketers think awareness effectiveness is decreasing
Clutter, ad avoidance, declining reach and decreasing trust in advertising are all blamed for top of funnel effectiveness declining, according to new research by the WFA.
More than a third of marketers believe the effectiveness of top funnel ad activity such as building awareness is decreasing, with clutter, ad avoidance, declining reach and decreasing trust in advertising all to blame.
The results come from a survey of 100 marketers from 70 of the largest advertisers by the World Federation of Advertisers (WFA) unveiled at Cannes Lions. The companies have a combined media and marketing spend of more than $115bn ,
The survey found that 24% feel the effectiveness of awareness advertising has ‘decreased somewhat’ during the past five years, while 13% believe it has ‘decreased dramatically’. That is in comparison to the 11% who feel the effectiveness of performance advertising has ‘decreased somewhat’ and the 3% that feel it has ‘decreased dramatically’.
The proportion of marketers who feel the effectiveness of performance has increased is also much higher – with 42% believing it has ‘increased somewhat’ and 30% that it has ‘increased dramatically’. Just 8% of marketers say the effectiveness of awareness has ‘increased dramatically’ over the past five years.
The study did not question if marketers thought awareness or performance marketing was more effective overall. But it did find that 55% spend their money on ‘mostly’ top funnel advertising, while 31% say they have an even split between awareness and performance and just 7% invest ‘mostly’ in performance.
The perception that performance marketing is increasingly effective comes despite well-documented challenges such as ad fraud, measurement issues and brand safety, particularly in digital advertising.
Of those who felt ad effectiveness was on the decline (equal to 32% of respondents), almost two-thirds (63%) blame the fall on ad ubiquity and clutter, 53% on advertising now being easier to avoid, 42% on declining reach and 39% on declining trust in advertising.
Only 32% blame it on increased investment in programmatic advertising and 26% on the inability of solutions (such as dynamic creative optimisation) to deliver effective messages.
This might explain why programmatic advertising across search, social and display is the main priority among the marketers surveyed. Some 26% label it a ‘top’ priority and 47% a ‘high’ priority, ahead of ecommerce and point-of sale.
Data and programmatic advertising are also the main priorities over the next three years for marketers, with 90% expecting both their importance to increase ‘somewhat’ or ‘significantly’. Influencer marketing comes next on 61%, followed by voice on 55%.
“As an industry… we’re spending more and more time questioning if we’re prepared for the constant stream of changes that have come to be the norm,” says Mark Cripps, CMO at The Economist Group which co-authored the survey along with the WFA.
“With so many fires to put out, it is not surprising we rely on tactical solutions for quick results. When performance is judged quarter to quarter, or in some industries, day to day or even hour to hour, it’s understandable we’re transfixed on the short term in order to deliver results now.”
The ‘over-stated’ trend towards in-housing
WFA CEO Stephan Loerke also believes the survey is a reminder that the trend towards in-housing has been over-stated. Three-quarters of respondents say they are spending ‘somewhat’ or ‘signifcantly’ more with agencies on traditional media buying, while 66% are upping investment in big ticket creativity, 64% in traditional media planning and 57% in creative strategy.
However, other areas are being more impacted by in-housing. For example, 38% are planning to up in-house investment in low cost fast creative executions, 34% in short-form content marketing and 33% in influencer marketing.
Even in these areas, it was only low cost creative execution where a greater proportion of respondents said they would in-house versus outsource. And in programmatic a higher proportion are spending more on agencies than in-housing.
“CMO’s are turning to agencies for help specifically in development of big-ticket creative and creative strategy, as well as media strategy and buying. They’re also moving programmatic out of house to external agencies. In-house resources have become dedicated to delivering tactical production tasks and development of short-form content,” says Cripps.
A future without advertising?
The survey respondents largely disagreed with the premise that in five years’ time there will be no traditional advertising, with 34% disagreeing somewhat and 28% disagreeing strongly. However, that leaves a rarely significant minority of 31% that can imagine a world without traditional ad formats by 2024.
Where they did agree was that in the future advertising will need to involve a value exchange and that direct-to-consumer brands will inspire traditional advertisers to find new and better ways of connecting with their audiences.
There was also scathing views on the industry itself, with more than two-thirds (67%) agreeing marketers have been obsessed with their own problems rather than putting the customer first and 65% that most examples of brand purpose fail to resonate with consumers because they lack authenticity.
More than half (52%) also bemoan the rise of digital and automation coming at the expense of creativity.
“What we take away from this survey is that we need to balance short-term needs with long-term brand building,” concludes Cripps.
“Of course we need to continue to put the fires out. And we also need to reforest with an eye to the future. Advertising is transforming with increasingly sophisticated audiences, media and tech. We need to plant the right trees for a changing climate.”
Blame it on everyone except themselves. What has happened is a huge decrease in critical thinking