What does "effectiveness" mean to you? Does it make you come out in a sweat? Does it make you yawn uncontrollably? Does it make you feel ever so slightly smug?
I can own up to the first two feelings at various times in my career, and only once to the last, but that was fleeting. Having the background of an "artist" rather than a "scientist", I've always found the subject somewhat daunting. But I know it's important. So it's been interesting for me to be involved in the IPA Value of Advertising Group, which has recently taken a really close look at the whole world of communications effectiveness in today's market.
The group commissioned some thorough research among marketing and finance directors from across a wide range of industry sectors, including the public sector, and among management teams across advertising, digital, integrated and media companies. The objective was to provide agencies delivering creativity (in its broadest sense) with a clearer understanding of what today's clients are looking for when it comes to effectiveness, and then to offer advice on how they can best meet those needs.
The results are chastening, revealing that the subject of effectiveness is in need of therapy. This paper outlines some of the issues and prescribes some potential treatment that could be applied. Try and stick with it, it's worth hearing.
First, here's some context on the environment in which many clients claim to be operating. It has a critical bearing on their perspective.
Clients' agenda: It's tough out there
Businesses are under increasing pressure to deliver: they have to be more accountable, more transparent and work faster than ever before. We should not forget that chief executives are regularly sacked for short-term failure. Hence clients are very focused on results. It's a brutal world where good results equal rewards and bad results equal punishment. The current financial climate of credit crunch and looming recession merely adds to the pressure-cooker feeling.
And it seems that the horizons for achieving these results are contracting - some targets stretch to the year ahead, but most focus on the next quarter. It's all about the here and now and the near future; the past is over, and the distant or possible future is a long way off.
It's a business world dominated by the issue of cash and cashflow. For commercial organisations, it's all about managing the creation of cash. They're making daily risk assessments, asking themselves questions such as "What use of available cash will benefit the business most?", "Is this a safe use of cash?", "If I were to invest the cash here rather than there, what would the consequences be?".
Marketing is but one business driver that they could invest in. But it represents a risk. The value of creativity is recognised by all the clients in the research. But creativity often represents a big risk. Many means are adopted in an attempt to control and police creativity and mitigate risk, such as Awareness Index scores and bespoke research tools. Clients are looking for certainty. This explains some of the seductive power of the digital world, with its seeming ability to provide hard data on consumer behaviour (click-throughs, SMS responses etc) and to provide it in real time.
How clients evaluate effectiveness
For the vast majority of clients, overall business results remain the only real arbiter of the effectiveness of creative campaigns.
In a cash-driven business world, marketing communications that depend entirely on long-term payback to generate commercial value are perceived to have little practical relevance to most clients, despite efforts to convince them to the contrary. Assessment of the value of communications comes within a short time frame. For many, medium- to long-term payback is irrelevant without short-term success.
This is not to say that they don't care about the effectiveness of their communications in the short, medium and long term. One of the interesting research findings was the tightly focused client view on what is believed to be important. When it comes to seeing whether their communications have worked or not, there are two over-riding factors that they look for: branded cut-through ("Did people notice it, and did they know it was from us?"); and take-out ("Did they see/hear what we wanted them to see/hear?"). The key focus is efficiency.
This perspective is interesting when matched against the theories that the likes of Paul Feldwick and Robert Heath have been espousing over the years. In his recently published article Exploding the Message Myth, Feldwick has suggested that the rational proposition might be a bit over-rated; overall brand impression and feel is where it's at.
A new effectiveness agenda
Clients are all saying they want creativity from their agencies - it's what they value most of all. Yet they also want this creativity to be channelled to good commercial use. They want agencies to be as creative as possible in a way that is of value to their business. In short, what clients are seeking from agencies is Purposeful Creativity.
Purposeful Creativity is a concept that encourages greater understanding and management of risk from all parties involved - the reason for taking the risk. It's different from planning; it's not just about deciding whether it is a good idea (planning), but also about having a point of view on how much should be spent on the idea - ie. adopting the mindset of an investor. Creativity per se only opens up an option to create value; it needs subsequent investment to generate cashflow.
As a phrase, Purposeful Creativity is naturally energising - representing a forward-looking perspective; it's about planning ahead, less about measuring and analysing the past. It also goes far beyond the traditional role for advertising, as it defines the purpose and potential of creativity in its widest possible sense. It respects the central role that uncertainty and risk play to business decisions.
There is certainly an appetite out there for agencies that know how to apply their creativity responsibly for the betterment of the client's business. Here's how:
How to achieve Purposeful Creativity
Purposeful Creativity is an ongoing endeavour, not a sporadic event. It requires collaboration and discussion with client and agency partners to agree the purpose and continually interrogate its relevance.
You have to decide what you want to be, because as an agency there are options available. Do you want to offer a wider perspective on all aspects of evaluation of Purposeful Creativity or are you happy to leave that to the specialist researchers and consultants? In which case, are you purely about creative execution? Client expectations of expertise in collecting and analysing data will vary by type of agency (eg. digital specialists). Whatever your decision, make it your business to know what purpose your creativity is setting out to achieve, and have a strong and clear point of view as to how it is going to do that.
It's important to think long term, but live in the short term. For many clients, the medium- and long-term impact of communications is only relevant if there is a short-term effect. This is a fact of life that agencies need to address. This is not to say that agencies have to change their beliefs and adopt a solely short-term mentality, but they must be sensitised to the client's perspective.
There are many IPA published cases for the long-term effects of communications campaigns. Indeed, the latest thinking is that, in general, campaigns break even after about a year, and start to show real payback after about two years. Agencies should use this evidence to help put forward the case for thinking longer term. They should also reference the very positive approach to communications investment from the private equity world, which also helps build the case for longer-term brand-building.
The point, though, is not just to think long term, it is to build momentum towards the long term. Understand and constantly monitor the short-term and the medium-term effects, because without their coming through, there may not be a long term.
It seems obvious, but it's also advisable to make sure you identify and agree the client's business metrics and challenges. Spend time with the finance director, read the shareholder reports and other public declarations of intent. Work out how communication sits in the organisation versus other drivers of business and customer value.
We must all remember to learn from failure as much as success. Although the IPA Effectiveness Awards celebrate successful strategies and campaigns, we all know there are many examples of unsuccessful cases, which are in the public domain. The more open you are in admitting and recognising failure, and taking the lessons on board, the less likely you will be to fail in the future.
Using past experience and learning, devise a clear point of view on how your communications are going to work before they are distributed, and use this as the basis for your measurement parameters. And remember to think short as well as long term. Refine the hypothesis based on what actually happens in the market and how people react to the communications.
The research showed that it's a good idea to be open-minded about remuneration. Purposeful Creativity is future-facing. It opens up possibilities for agencies to share in the risk and the reward of the creativity they deliver at a commercial level. This can be based on understanding the appetite for risk and reward within the client organisation; the historic notion of success and failure; and the appropriate levels of investment required to achieve the objectives.
These are exciting times for communications. As the modern business world continues to change at pace, so too does the agency world. It is critical that effectiveness keeps up with the pace and remains relevant and useful. Purposeful Creativity provides agencies of all persuasions with a clear vision to rally around. It sets a new agenda for effectiveness.
The independent researcher Mark Stockdale of Wheelbarrow conducted all the research. This was done under the direction of Gurdeep Puri, then of Leo Burnett and now the co-founder of The Effectiveness Partnership.
- Charlie Snow, the head of planning at Delaney Lund Knox Warren & Partners, on behalf of the IPA Value of Advertising Group