Ian Whittaker’s Post

‘Lost in translation’ There is a gap between ‘pro advertising’ investment analysts, the effectiveness evidence of businesses like Ebiquity and Nielsen; and the reality of brands’ advertising investment patterns. 😶 Ian Whittaker Brand Finance IPA survey last October found 89% of investment analysts believed marketing spend should be capitalised (i.e. booked as an investment) some or all of the time. 🌱 The recent ‘Profitability’ report by Thinkbox reported an average Profit ROI of £4.11 across the econometrics client base of Ebiquity and Group M. 💰 But in the UK, growth in ad investment outside of PPC and Retail media has been a paltry 1.6% a year for the last 5 years. And Nielsen say 50% of their clients are leaving profit on the table by under-investing. ➖ In the7stars recent effectiveness survey, 45% of senior marketers believed their organisation saw marketing as a cost rather than an investment; in sharp contrast to the view from the investor community. 👎🏻 This sentiment was embodied by Richard Warren, Director of Marketing at Nationwide during the unveiling of the Profitability research 2 weeks ago: “Whilst we [marketers] might think this is really clever and shrewd to cloak advertising in the word investment, they [Excos and boards] just think it’s bollocks.” 💣 I’ve written a piece for WARC (see comments) that analyses the disconnect between these two camps. When investors look at strong brands they see attributes like pricing and distribution power, sales persistence, and high barriers to entry for competitors. But when brands put forward the business case for advertising these metrics rarely show up; replaced instead by a basket of custom brand metrics, in-year sales, or more problematically - attributed outcomes. The article (no paywall) analyses the problem in depth and proposes three practical ways to close the gap between analysts’ and C-Suites’ contrasting perceptions of advertising. 🤝 Lena Roland Catherine Driscoll David Tiltman Paul Wilson Tom Fishburne Dr Grace Kite Nic Pietersma

Why, if the effects of advertising can span beyond the immediate to months or years, do we seemingly only focus on the immediate? Focusing solely on short-term sales responses can significantly underestimate the value of media investments and potentially reduce your long-term ROI. Heck, the recent Profit Ability 2 study by Thinkbox reinforces this point (see screenshot). The problem is that you can only measure the long-term effects once they've happened or haven't happened, and by then, it's too late to change anything. So, short-term sales responses and indicators or longer-term effects need to be measured at the same time. If both are positive or negative, the decision is easy. When they diverge, more challenging decisions ensue (sometimes, even though it falls short on one measure, the other may be so strong as to just "run with it"). More immediate advertising impacts can be assessed by comparing measures like revenues, traffic, website visits, search levels, etc., against weekly ad spend. To better understand the potential for longer-term impact use proxies. Often, these are known to have some relationship with revenues based on the category. It could be things like brand consideration, unaided awareness, or even advertising awareness. In some ways, advertising awareness can be the easiest to see movement in (assuming it is strong, of course), given that the other measures can be more easily blunted through external measures. For more continuous spending, isolating and evaluating advertising contributions becomes more challenging which is where additional methods like geo testing, cross-media research, copy testing, and market mix modeling can be used. While most brand survey measures change slowly over the long term, advertising can reshape brand perceptions and build strong associations with specific buying contexts and occasions. Effective advertising can quickly impact brand associations, especially when communicating a compelling fact or claim about the brand. Ultimately, a holistic approach that balances immediate and long-term metrics is critical to unlocking the true impact of your advertising efforts. #revenues #marketingstrategy #advertising

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Why are so many agencies struggling if ad budgets aren't shrinking? For as long as I can remember, EMARKETER has predicted double-digit growth for nearly all digital channels.  I would often include these charts when asking brands to increase their digital investments. But my reliance on this type of research early in my career was naive. I regularly overfit their data into my ‘spend more on digital’ narrative.  In hindsight, I should have also noticed a different trend - that marketing budgets as a % of revenue have been steadily declining for years. According to Gartner’s “CMO Spend and Strategy Survey”, 2024 marks a 10-year low (with the exception of the 2021 pandemic year), with only 7.7% of revenue going to marketing.  That number had been in the double digits before the pandemic, but has never recovered.  The graph, via the The Wall Street Journal, is below. Brands are actively reassessing their non-media investments by cutting back on labor, tech and agencies to protect profitability.  And AI is only just getting started, which disproportionately threatens these three groups.  From my vantage point, this is a time of significant realignment in the advertising industry.  My advice? 1️⃣  Brands need to shed both the technology that doesn’t serve them, and the agencies that are too embedded in yesterday’s ecosystem.  2️⃣  Agencies need to adjust their contract terms to align their financial incentives more directly with the brands they serve.  Sit in the CMOs foxhole! 3️⃣  Individual marketing professionals need to increase their AI skillset, lest they be out of the job in the not-so-decent future. As someone who has been in the industry for years, I am happy to help. What can I do to be of service to you? Let me know.

An interesting article in Marketing Week reporting on the latest 'Profit Ability 2' study, which brings some fascinating insights into the world of advertising proving that all forms of advertising not only drive business growth in the short term but also promise substantial returns in the long run. Commissioned by Thinkbox and analysed by a consortium, this study scrutinized £1.8bn of media investments across 10 channels. The numbers speak volumes - with an average short-term profit ROI of £1.87 for every pound spent, rising to £4.11 when considering sustained effects up to 24 months. Perhaps most intriguing is the finding that 58% of advertising's total profit impact unfolds beyond the initial 13-week period, underlining the importance of consistency and repetition in advertising campaigns (I always go on about consistency and this is why). This insight is crucial for any business aiming to harness the full potential of their advertising efforts - you must keep the momentum going. The study's findings on the profitability vary by media channel. Notably, print, despite a modest 3.3% allocation of advertising investment, emerged at the top with the highest full payback ROI of £6.36. Conversely, generic PPC achieved rapid ROI but showed rapid decline post-one week, highlighting the fleeting nature of its effects (I realise this will vary by business type). 'Profit Ability 2' not only advances our understanding of advertising impacts across different channels but also emphasizes the strategic value of long-term investment in advertising for sustained business growth. It demonstrates the business case for prioritising both immediate impact and long-term gains. What do you think of these results? Are you surprised at some of the ROI in both short term and long term? You can find a breakdown of the ROI by channel in the article from Marketing Week. https://bit.ly/4b9WM55 #MarketingInsights #AdvertisingROI #BusinessGrowth

This is Rosser Reeves, creator of a very persistent but wrong method for evaluating advertising 🙀*   His method is quick, simple and it nearly always shows big ad effects… which is probably why it’s been so persistent.   All you need to do is compare the brand perceptions of people who say they have seen your ad with perceptions of people who do not remember seeing it. You then chalk up the difference – which is almost always big and positive – to advertising!   The trouble is, it’s wrong.   People aren’t brilliant at remembering whether they’ve seen an ad or not. And one of the big things that helps them remember is whether they’re “close” to the brand. Whether they use the brand, or whether they are planning to.   That means people are more likely to notice and remember ads from the brands they use, know and like. So remembering an ad is the *effect* of liking the brand, not the *cause* of liking the brand.   The crazy thing is, this kind of analysis keeps being used – by big reputable brands with massive research budgets - even though it’s been discredited for years!   👀Watch out for it, and be sceptical when presented with data like this.   In our new Data works course, you’ll find 4 questions you should ask when presented with evidence that one thing causes another. It’s just one of many recipes in the course that will help you do brilliant things with data and avoid being misled.   🚩Read more at the link below or email Imogen Howard via hello@magicworks.training with your questions. Course kicks off on 23rd April. 🪧If you’re interested in analytics or consultancy, drop me a message.   * Rosser Reeves also invented the USP and wrote a book called “Reality in Advertising” which was pretty good! https://lnkd.in/evkgPgnu

“What if we just stop advertising for one year? We could save millions of dollars!" It is a question I get asked often in non-profit health care marketing, where margins are razor thin and we are frequently asked to prove our value. [Insert thorough and beautifully designed presentation deck with data from brand tracking surveys, marketing mix modeling and attribution metrics - none compelling enough to convince our budget-setting colleagues that marketing is a profit driver, not a cost center.] So, what does the published research tell us about the value of brand advertising? Or the implications of a reduction or hiatus? The Ehrenberg-Bass Institute of Marketing Science conducted a study in 2018 to answer this question: What happens when brand advertising stops? Its findings? The vast majority of brands in the study experienced a decline in market share, with the rate of declined being dependent on a brand's size and prior sales. The average change in sales after stopping advertising for one year was a 16% drop, and 36% after three years. In addition, the rebound period to get back to prior sales trends after advertising is resumed is often longer than the period in which advertising was paused. "The sales of a brand are like the height at which an airplane flies. Advertising spend is like its engines: while the engines are running, everything is fine, but, when the engines stop, the descent eventually starts." - Simon Broadbent #marketingmatters #advertising #profitdriver #marketingspend #marketingmixmodeling #mediamixmodeling #marketingvalue #branding #brandadvertising #factbasedthinking #positioning

Friendly reminder: Marketers creating more creatively effective ads are delivering more cash for their brands.

Here's how I've scaled a singular brand from $10k → $200k spend per day: 5 tips for your paid media strategy during this Q4. 1. Go Bold with Budgets ↳ Push your daily spend based on real-time performance. ↳ Brands can often increase daily ad spend by up to 20x ↳ It's better to scale too much and dial back than leave money on the table 2. Diversify Data Views ↳ Don't rely solely on platform data; it can lag up to 72 hours and is incomplete. ↳ Use platform reporting it to compare what's working within the platform. ↳ Use iMER, aMER, and total MER to understand impact. 3. Evergreen's Power ↳ Keep your evergreen campaigns running. ↳ They provide valuable historical data and attract varied buyer personas. ↳ These often out-scale promotional ads with lower CTRs, but higher CVR. 4. Recycle Success ↳ If last year's ads worked, reuse them. ↳ The complexion of your buyer may shift and these older ads can cover you if they do. 5. Constantly Innovate ↳ Replace underperforming ads quickly. ↳ Fresh creatives or different copy can keep the ad account active. Remember, be dynamic, data-driven, and decisive. Make this Q4 remarkable for your brand! What tips do you have for Q4? Let's discuss in the comments.

The results are notable: a robust correlation exists between advertisements identified as possessing high creative quality and campaigns yielding high ROI figures. #Creativity #Creators #ROI #CreativelySquared