Adam & Eve Beware: Another Apple in the Garden of Accountability

I saw an article in Ad Age today headline: Banks That Spend the Most on TV Ads Performed the Best. It referred to "A new report from financial-services research firm Aite Group, which examined ad-spending trends and return on advertising performance of 32 of the largest 50 U.S. retail banks from 2006 through 2008, found that top 25% highest-performing banks are those with TV-heavy buys.". The data was provided by TNS.

Great news for TV sales reps. Likewise for TV production companies. But a sucker's bet for bank marketing executives who would rip out that page of Ad Age and run into their CFO's office to defend a recommendation to spend more on TV.

First, this "study" didn't isolate the non-media marketing variables which may have affected the outcome. Little things like customer service quality, direct marketing spending programs, message effectiveness, word-of-mouth, etc. Bet they didn't count the number of toasters given away either.

Nor does it appear to have accounted for other characteristics of the banks themselves which may have driven performance higher. Price perhaps. Or interest rates charged/paid. Or branch location demographics. Or in-branch cross-sell incentives. Or other things which would never show up in syndicated spend data.

So what can a bank marketing executive take away from this study? Nothing. They just measured what was easy to measure and didn't answer ANY of the open questions surrounding the payback on marketing investments beyond a reasonable doubt. Worse, it is the apple and marketers are Eve. It beckons with faint promises to fulfill the desire to believe that it may offer "evidence" of the beneficial impact of marketing.

If you value your credibility, don't circulate stuff like this within your marketing organization, and don't EVER use it in discussions with a savvy financial executive. When you see a headline like this, just pass it along to your trustworthy, naturally-skeptical research professional and ask them to find the flaws.

Stuff like this isn't research. It's PR. One bite of this apple will cost you your reputation - perhaps permanently.

We'll keep working on raising the standards in the media on what passes for good content.

Fools Rush In - Searching for Magic ROI

If the current economy is encouraging you to think about shifting resources from traditional media to digital alternatives in search of cost effectiveness and overall efficiency, beware: nearly EVERYONE ELSE HAS THE SAME IDEA.

Implication: you will be moving into an increasingly cluttered marketplace, where broad reach options will continue to lose effectiveness and highly-targeted delivery will come at a higher price as demand outstrips the supply of good inventory and good people to execute. Consumers too will become increasingly savvy with respect to their digital media usage patterns, and harder to “impress” with incrementally new ideas or executions.

I know I’ll get lots of letters about this post “educating” me on the infinite scalability of the digital media, and reminding me that true creativity is likewise boundless. I’m sure many of you have research that shows how the returns to digital marketing programs just keep growing as the audience of users grows across more and more platforms. Fair enough. But the laws of marketing physics suggest that more marketers and marketing dollars will rush in to the arena than proven executional avenues can accommodate in the short term. And most of them will NOT bring breakthrough new creativity with them. That will create lots of failure and un-delivered expectations, which in turn may slow adoption of otherwise valuable marketing options.

Here’s a simple suggestion as you contemplate the great digital shift towards the promise of better ROI… set your expectations based on poorer results than you may have experienced in the past, and/or ratchet-down vendor claims of look-alike results presented in “case studies”. Before committing to the “me too” plan of going digital, ask yourself if your planned online campaigns would be a good investment if they were 10% less effective than originally anticipated? Would your new social networking programs still provide good payback if they had a 20% less impact on potential customers? These may very well be the new reality when everyone rushes in.

In stark contrast, a friend who’s CMO of a packaged goods company tells me that while he is continuing to shift the balance of his total spend towards digital media, he’s doing so in a measured way built on careful experimentation. He’s working on a cycle of plan>execute>learn>expand>plan again. So he’s spending 20% more on digital media in 2009 than in 2008, but not moving huge chunks of his total budget all in one big push for magic returns. Nope. His philosophy is “hit ‘em where they ‘aint.” He’s buying more radio and magazines – media he’s developed clear success cases with in the past and places he can more accurately predict the impact on his business. He may find himself all alone there. But I suspect that’s part of the appeal.

Trying to "Justify" Superbowl Spending?

"...as a responsible employer of more than 290,000 employees and contractors world-wide, there is a time to justify such an ad spend and a time to step back."

This quote was provided by the director of advertising at FedEx, in response to a question about why they would not be advertising on this year's Superbowl - the first time in 12 years they would be absent from the annual ad-fest.

The implication from his statement seems to be that, up until now, the Superbowl ads were "justified" by something other than sound economics. Sure, there was the fabulous reach into an attractive target demo, but the price is high. So maybe the premium was being "justified" by some "softer" benefits like employee morale, channel partner collaboration, or even that most elusive of all... "brand preference". And in these days of extreme bottom-line focus, these non-economic "justifications" just weren't going to cut it. It would send the wrong message to people losing jobs and benefits.

The sad truth here is that each and every one of the "softer" benefits can, in fact, be economically measured to a reasonable degree. There are practical, credible ways to calculate the ROI of employee morale, partner collaboration, and brand preference. But they require some techniques that few marketers have yet investigated, let alone perfected.

I don't have any idea if Superbowl advertising is a sound economic decision for FedEx, and I'm not questioning their judgment. It might have been a superb use of shareholder funds, or it may have been a terrible waste. I just cringe when I hear how such important marketing decisions are still, in this age of measurement enlightenment, being made on the basis of "justifications" that suggest something less than a robust economic framework was applied.

We, the marketing industry, can do better. We can measure each and every one of those softer elements in ways that our finance partners will embrace. Those 290,000 employees and contractors need us to do better. For their sake, let's try to ramp up our measurement game in 2009, shall we?

TiVo to the Rescue?

Hot on the heals of the Google/Nielsen partnership, TiVo has entered the measurement fray with its announcement that it will begin providing advertisers with data on the viewing (and skipping) habits of consumers using TiVo’s panel of 20,000 set-top boxes. This has the potential to be far more illuminating than the Nielsen data as TiVo can provide insight into who is skipping ads (both on the demographic/lifestyle segment level and on the individual-addressable level) and which ones they are skipping. The result could be a wealth of information on ad performance, sliced and diced on many dimensions.

Even more interesting, TiVo will offer advertisers the ability to learn (on a blind basis) the viewing habits of their actual customers. By providing TiVo with a customer file, marketers can get insight into exactly how many (and which types) of customers are skipping their ads, which should help both fine-tune message execution and enhance negotiations with networks.

TiVo still can’t tell us who is watching the ads – only who isn’t. But with its jump on the interactive feature options, TiVo may be faster to offer advertisers the back-end direct response element of the engagement chain.

This is a promising frontier for advertisers seeking to understand the actual payback of their advertising investments. It’s not in itself a magic bullet, but another step forward in getting the objective insight we need to draw credible conclusions.


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