Marketing has always been about effectiveness. But ROI is not a straightforward thing. It never has been and it never will be.
It is complicated. So there will always be doubters – those who cannot see how inspirational strategy and outstanding creativity give real financial edge (while they simultaneously applaud the global financial success of, say, Sky or Burberry). And, to be fair to the doubters, the digital explosion makes it increasingly difficult to demonstrate how everything works and works together.
Which is why we need to work together, cross-industry, to address this. This is where the EffWorks initiative – spearheaded by the IPA – comes in. It’s not so much a justification of why marketing is great, but an evidence-based demonstration of how marketing is great and, critically, how marketing effectiveness can be marketed, managed and measured in this wild digital era.
One of the most significant pieces of research to come out of the initiative’s recent flagship conference, EffWeek, was the new and largest-ever research survey among IPA and ISBA members about marketing effectiveness culture. It looks at how day-to-day management behaviours within client organisations and between marketers and agencies can affect our ability to deliver. Undertaken by Libby Child of Greengrass Consulting, this report – based on a sample of 100 marketers from more than 60 companies across 12 sectors and 113 agency participants across planning and client services from more than 60 agencies – seeks to determine current practices that are helping and hindering the creation of an effectiveness culture and provide the opportunity to track progress over time.
The good news is that the study shows that marketing effectiveness is definitely on the to-do list of many marketers, with an increasing number seeking to make a more co-ordinated effort to create an effectiveness culture. There is also growing pressure from senior management on the marketing team to demonstrate its value and to be seen to apply even more financial rigour to decision-making processes.
When marketers were asked to give themselves marks out of 10 for their current performance, their average rating is only six – so there is still some way to go.
So what behaviours will make the difference?
1 Plan the short term in the context of the longer term
Marketers are definitely under pressure to deliver in the short term and 73% admitted that short-term tactical needs often take priority over longer-term (12 months-plus) objectives.
Only 14% of marketers felt they "strongly agree" that they have one to three-year marketing plans in place, while just 5% of agency respondents thought the majority of their clients had one to three-year marketing plans. Agencies also feel that marketers tend to demand five-year visions in pitches but then revert to short-term planning in practice.
This short-term focus would appear to be undermining strategic planning and long-term brand development.
Align and share KPIs and marketing objectives upfront
There are encouraging signs in that 69% of marketers agreed that their marketing and customer data is both trusted and used within the business, with 57% agreeing that they make the relevant data accessible to the right people at the right time to facilitate informed planning and decision-making.
Less than half (48%), however, were able to agree upfront their marketing success criteria across all relevant stakeholders and business areas such as marketing, strategic planning, finance, research and insight.
Meanwhile, agencies believe there is still room for improvement when it comes to briefings – only 48% of agencies currently receive written communication briefs from their clients that include definitive objectives.
When it comes to performance-tracking against objectives, the impressive range of data sources now available can be challenging to absorb and prioritise, with sales data and brand tracking still the most actively used to assess marketing impact by marketers.
3 Make marketing effectiveness a shared responsibility
There is fresh evidence that brands are building a range of capabilities in insight and analytics around marketing effectiveness. Most often, it is linked to the marketing team, although it may not always report to marketing.
In fact, 52% of marketers agreed that marketing effectiveness processes are being used to help the organisation learn, rather than to justify marketing activity, while 45% claimed to have successfully developed new structures and processes that break down legacy silos.
However, there is still much room for improvement. Marketing effectiveness is a capability that is still felt to require significant additional investment and experienced resource.
So we can be optimistic about the future
Cross-industry evidence-based initiatives such as EffWorks help create the right climate as well as the right tools to allow marketers and agencies to drive cultural and behavioural change in their businesses.
And this new and extensive benchmarking research is another strong piece of evidence to support our movement.
Already, we are succeeding in putting marketing effectiveness higher up the agenda and, indeed, this research sees marketers setting their own improvement targets for the next one to three years. By 2020, 75% of marketers surveyed expect to see their score out of 10 for marketing effectiveness growing from an average of six to eight or above.
There is growing interest, across the marketing community as a whole, in demonstrating the "how" of marketing, as opposed to justifying the "why". This marketing effectiveness revolution is positively influencing both internal ways of working in brand organisations and in their partnerships with agencies.
By switching from doubt to evidence-based clout, we can continue to drive this change.
Stephen Maher is chair of the IPA Effectiveness Board and chief executive of MBA; Janet Hull is IPA director of marketing strategy