Summits Yellow

What is Effectiveness?

David Murphy

With the Effective Mobile Marketing Awards Ceremony taking place in London this evening, Alistair Hill, CEO of On Device Research considers what effectiveness is, and what it isn't.

Brands advertise to make money. There is little doubt in this fact. When stripped of the complexities involved in strategic media plans and award winning creative, one simple truth remains: brands invest in advertising to make a positive impact on their bottom line.

While this is the purest measure of effectiveness, analysing results in terms of sales impact is often easier said than done. There is a considerable time lag between an ad campaign and its success (or lack off) being realised. Digital marketers need therefore to look for precursors of effectiveness: metrics that correlate with, and give an early indication of sales, to gain a faster read on the effectiveness of campaigns.

At tonight’s Effective Mobile Marketing Awards ceremony, advertising practitioners from across the industry will be proudly sharing how they have transformed businesses by leveraging data and creativity to create impactful mobile ad campaigns.

Yet at the same time, it is going to be interesting to see how many of them have heeded the advice outlined in the IPA’s Media in Focus – Marketing effectiveness in the digital era report produced by Les Binet and Peter Field this summer: a report which again asserts that the optimum split between longer-term oriented brand spend and shorter-term activation spend remains at around 60:40. How many of tonight’s finalists have the correct measurement frameworks in place to assess the impact of their mobile campaigns on long-term business goals?

Mid-life crisis
The digital ad industry seems to be stuck in a mid-life crisis of confidence when it comes to digital measurement. This year has seen the world’s largest advertiser dial back its digital spend, and its chief brand officer, Mark Pritchard, declare at Dmexco that he is still only 60 per cent of the way through P&G’s much publicised digital clean-up operation. In reply, the IAB’s new CEO Jon Mew has rightly delivered a well-informed rallying cry to the industry to move away from generic KPIs when measuring digital, and move towards measures of true effectiveness.

We at On Device Research have been advocates of this approach since our inception eight years ago, and have built up a wealth of insight and tech solutions to help advertisers really unpick how digital works for them.

And digital really does work. An analysis of 300+ brand impact studies reveals an average delta improvement in upper funnel metrics of 9-15 per cent and lower funnel metric improvements of 5-7 per cent following ad exposure. For cross-platform campaigns, the differences are even larger with those exposed to ads on multiple devices seeing improvements in spontaneous brand awareness that are 9 percentage points higher than those exposed on a single platform.

What is not an effectiveness metric?
Our starting point for helping brands understand the effectiveness of their digital spend has always been to consider what digital effectiveness actually is.

Effectiveness certainly isn’t a clickthrough rate. CTRs do not correlate to long terms sales (and are really only of use in performance marketing). When the first ever online ad was launched by AT&T twenty-three years ago and achieved a 44 per cent clickthrough rate, maybe it meant something, but now with most ads barely reaching a 0.01 per cent CTR, it is a metric that tells us little of impact.

Engagement metrics, such as interaction rates and dwell times, may seem to provide a richer source of data, but even they tell us nothing about how people actually feel about brands (they rarely correlate to a brand’s sales) and whether they’ve connected with them on any sort of emotional level following exposure (and as we’ve shown, digital ads which perform best for emotion, on average, result in a purchase intent improvement over five times higher than those which do not resonate emotionally).

For many the answer is viewability, but with a viewable impression registering when half a standard digital ad is in view for only a second, the IAB would be  the first to admit that viewability is a measure of delivery, not effectiveness.

Viewability is a hygiene factor – it’s the very least we should expect from digital ad spend, but once again this does not correlate to a brands sales or business objectives.

In terms of measuring short-term impact, the performance marketing discipline is a finely-honed machine when it comes to digital, with every online acquisition and attribution model optimised to within an inch of its life.

But going back to Field and Binet’s work for the IPA, this type of approach will be great for assessing the 40 per cent of your spend that you should be devoting to short-term outcomes, but it will tell you nothing of the 60 per cent you should be devoting to brand spend.

Which metrics are a precursor for sales?
The branding funnel remains a tried and tested model for assessing brand impact. At the lower end of the funnel, Purchase Intent is a key indicator for brands, with long-established academic theory supporting the link between stated Purchase Intent and actual sales (Jamieson & Bass, 1989; Stapel, 1971). However, while applying campaign buy details to Purchase Intent can apply a real-world efficiency metric such as Return on Brand Impact to digital spend, there are those who will always want to take their measurement further by assessing actual in-store behaviour.

Partnering with geo-location data providers allows us to assess the impact of digital ad spend on driving actual retail location footfall to within an accuracy of 10 metres. With our norms data for footfall, we have seen an average uplift in store visits of 35.2 per cent, enabling us to demonstrate the real-world effectiveness of digital in a market that will continue to face considerable disruption to its distribution channels.

Digital effectiveness should not simply be an afterthought. It should be fully embedded in to measurement frameworks that create a continuous feedback loop throughout the planning cycle. Creative Optimisation research enables brands to perform a creative pre-test live in market at the start of the campaign, placing budget behind those ads which have been proven to move metrics that genuinely correlate to real-world business objectives.

As many brands will doubtless showcase at tonight’s Awards Ceremony, the desire to drive digital effectiveness, at a time when the industry is facing unprecedented levels of scrutiny, is greater than ever before. But as always, it is only those marketers who measure true metrics of effectiveness who will enjoy long-term success.

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