The big pic­ture has been lost to the short-term click

The short-ter­mism of cor­po­ra­tions has trick­led into their at­ti­tudes to mar­ket­ing cul­ture, which is los­ing sight of brand­build­ing. By Mar­cus Rich

Campaign UK - - NEWS - Mar­cus Rich is the chief ex­ec­u­tive of Time Inc UK and chair­man of Mag­netic

The av­er­age chief ex­ec­u­tive is in the job for eight years. For chief fi­nan­cial of­fi­cers, it is five years. For chief mar­ket­ing of­fi­cers, the av­er­age is just four years. Why does this mat­ter? Well, thanks to a new re­port com­mis­sioned by Mag­netic and compiled by En­ders Anal­y­sis, we can iden­tify this as just one piece of ev­i­dence of short-ter­mism that is hav­ing a po­ten­tially crip­pling im­pact on mar­ket­ing ef­fec­tive­ness.

En­ders cites the chang­ing own­er­ship of Uk-quoted shares, which are now held by di­verse in­ter­ests across global mar­kets, as a key con­trib­u­tor to this phe­nom­e­non. This new breed of share­holder is de­mand­ing faster re­turns than was pre­vi­ously ex­pected by UK in­sur­ance com­pa­nies and pen­sion funds, which owned 43% of UK shares in 1998 but now own just 9%.

This short-term out­look has also con­trib­uted to volatil­ity within se­nior po­si­tions at pub­lic com­pa­nies. In mar­ket­ing, a dis­ci­pline in which top-level tal­ent is al­ready thin on the ground, it is even worse, with just 2.6% of di­rec­tors at the ma­jor com­pa­nies mon­i­tored by Stan­dard & Poor’s com­ing from a mar­ket­ing back­ground.

This would not be such a prob­lem had com­pa­nies got their trusted ad­vi­sors by their sides. But again, when it comes to re­la­tion­ships with ad agen­cies, we see a move to­wards shorter-term ar­range­ments. The av­er­age part­ner­ship be­tween brand and agency fell from 86 months in 1984 to 30 months in 2013, ac­cord­ing to the IPA. Which, along­side the need to de­liver ef­fi­cien­cies, ex­plains why pro­cure­ment de­part­ments are now so heav­ily in­volved in mar­ket­ing in­vest­ment de­ci­sions.

There is no doubt­ing that tech­no­log­i­cal dis­rup­tion has also con­trib­uted to the uncer­tainty and prompted a shift to­wards shorter-term de­ci­sions about mar­ket­ing in­vest­ment. It is an­tic­i­pated that digital ad­ver­tis­ing will grow be­cause of the fore­cast that by 2020 we will be spend­ing an ex­tra 21 bil­lion hours online, 75% of which will be on mo­bile de­vices.

In a ses­sion at ISBA’S con­fer­ence in March, Saatchi & Saatchi chair­man and chief strat­egy officer Richard Hunt­ing­ton said of the in­dus­try’s re­sponse to con­sumers mov­ing online: “We be­lieve that qual­ity of media is sim­ply the qual­ity of the pipe, and whether it ac­cu­rately reaches some­one we have pre­dicted might be in­ter­ested in us, rather than the whole con­text around the mes­sage and the brand.”

Com­ing back to the work by En­ders, its re­port for Mag­netic noted: “Con­text and en­vi­ron­ment in digital media have not been sys­tem­at­i­cally quan­ti­fied as an in­flu­ence on brand, on pre­mium price po­si­tions and on a range of other mar­ket­ing ob­jec­tives… A re­lated fail­ure to mea­sure a range of mar­ket­ing risks, such as the neg­a­tive rep­u­ta­tional ef­fects of poorly ex­e­cuted re­tar­get­ing or the long-term im­pli­ca­tions of the rad­i­cal shift in spend from brand to ac­ti­va­tion”, could dam­age a brand for­ever.

The at­tri­bu­tion mod­els of re­turn on ad­spend have also be­come com­pro­mised. Build­ing the tools and analysing the re­sults of today’s com­plex mar­ket­ing in­vest­ment is costly and takes time, which means it is too of­ten ne­glected. Con­se­quently, there is not enough weight placed on pin­point­ing the true con­text and value of mar­ket­ing com­mu­ni­ca­tions.

It is not too late, though. We can defuse the ef­fec­tive­ness time bomb by recog­nis­ing short-ter­mism re­sults in at­tri­bu­tion and struc­tural bi­ases in the mar­ket­ing and media in­dus­try to­wards “the last click” at the ex­pense of brand-build­ing. It also leads to the ne­glect of cre­ativ­ity and plan­ning and a lack of fo­cus on the qual­ity of the con­text and en­vi­ron­ment in which mar­ket­ing mes­sages are lo­cated. Any­body look­ing for ev­i­dence that ad­ver­tis­ing can re­ally hit the fan in this cli­mate just needs to con­sider the sorry state of af­fairs that led to a boy­cott of Youtube by ad­ver­tis­ers over ads that ap­peared next to of­fen­sive con­tent.

Th­ese in­ci­dents high­light that it is time we got to grips with the ben­e­fits and risks as­so­ci­ated with the con­text in which mar­ket­ing ap­pears and its im­pact on build­ing brands and de­liv­er­ing long-term re­turn on in­vest­ment. It is worth com­pa­nies fo­cus­ing their re­sources on how each media en­vi­ron­ment pro­vides dif­fer­ent lev­els of trust, qual­ity and rel­e­vance for both brands and au­di­ences. That is the most ob­vi­ous and pain-free way to start rev­ers­ing the de­cline in mar­ket­ing ef­fec­tive­ness while avert­ing some of the brand crises that pose a real threat to share­holder value.

As Mag­netic chair­man and chief ex­ec­u­tive of Time Inc UK, I am com­mit­ted to in­creas­ing our in­vest­ment and ef­forts in ac­cu­rate mea­sure­ment tools. AMP, our new au­di­ence cur­rency, is a great start and lays strong foun­da­tions for bet­ter un­der­stand­ing of au­di­ence be­hav­iour. But we also want to play our part in devel­op­ing more part­ner­ships be­tween chan­nels, media brands and ad­ver­tis­ers to help quan­tify th­ese com­plex but crit­i­cal is­sues around con­text and en­vi­ron­ment.

There is plenty of ev­i­dence from the UK, the US and Aus­tralia about the long- and short-term role strong and trusted con­tent chan­nels such as magazine brands play, but it seems as though we will need to raise our game if we are to al­lay the “crack hit” that is our ob­ses­sion with the last click and show­ing im­me­di­ate re­turns.

“When it comes to re­la­tion­ships with ad­ver­tis­ing agen­cies, we see a move to­wards shorter-term ar­range­ments”

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