Commentary
Time To Bury John Wanamaker
- by Pat LaPointe , Op-Ed Contributor, November 24, 2009
Maybe it's because the very nature of advertising defies certainty.
Or maybe the definition of "wasted" is too broad.
Or maybe the reality is that the actual waste factor has been reduced to significantly less than 50% through digital message delivery and interaction channels, among other improvements. But no one famous ever said that "15% of my advertising is wasted, I just don't know which 15%." And it wouldn't make for a provocative PowerPoint slide even if they did.
It's difficult to ignore the many signs of great progress the marketing industry has made towards better understanding the financial payback of marketing and advertising. For example:
All of this is very encouraging. Most of the CMO presenters at this year's conference included in their remarks evidence that they have been systematically improving the return they generate on their marketing spend by use of these and other techniques. So where is the remaining gap (if indeed one exists)?
First off, it seems that we're often still applying the techniques in more of an ad-hoc than integrated manner. In other words, we appear to be analyzing this and researching that, but not actually connecting this to that in any structured way.
Second, while some of the leading companies with resources to invest in measurement are leading the charge, the majority of firms are under-resourced (not just by lack of funds, but people and management time too) to realistically push themselves further down the insight curve. In other words, the tools and techniques have been proven, but still require a substantial effort to implement and adopt.
Third, not everyone agrees with Eric Schmidt's proclamation that "everything is measurable." Some reject the basic premise, while others dismiss its applicability to their own very non-Google-like environments.
So what will it take to put John Wanamaker out of his misery before the 200th anniversary of the ANA?
1. Training -- exposing more marketing managers to more measurement techniques so they can apply their creative skills to measurement challenge with greater confidence.
2. A community-wide effort to push down the cost of more advanced measurement techniques, thereby putting them within reach of more marketing departments.
3. An emphasis on "integrated measurement." We've finally embraced the concept of "integrated marketing"; now we have to apply the same philosophy to measurement. We need to do a better job of defining the questions we're trying to answer upfront, and then building our measurement tools to answer those questions, instead of buying the tools and accepting whatever answers they offer while pleading poverty with respect to the remaining unanswered ones.
4. We should eat a bit of our own dog food and develop external benchmarks of progress (much as we do with consumer research today). Let's stop asking CMOs how they think their marketing teams are doing at measuring and improving payback, and work with members of the finance and academic communities to define a more objective yardstick with which we can measure real progress.
As we embark on the next 100 years, we have the wisdom, technology, and many of the tools to finally put John Wanamaker to rest. With a little concerted effort, we can close the remaining gaps to a tolerable minimum -- and dramatically boost marketing's credibility in the process.
This is the most succinct "state of the issue" I have read on the topic of marketing measurement. Copy and distribute to the entire executive suite....
I'm not sure about eating your own dog food, but you've definitely been drinking too much of your own Kool Aid.
First you and yours jumped on the click-thru bandwagon, heralding the arrival of the most accountable metric ever. Companies couldn't wait to add "click" to their names. When that didn't work out as plannned, you re-adopted the same soft metrics - brand lift, impressions, attibution - you had previously labled as utterly unaccountable.
Now you're saying John Wanamaker was wrong. Of course he was. He only claimed to be baffled by 50% of his ad buy. Anybody staring a .1% CTR in the face would reasonably conclude that it's more like 99.9% that 's wasted.
The fact that John Wanamaker funded his own research notwithstanding, you and your intermediary brethren should thank your lucky stars that a certain famous snake oil salesman's premonitions still hold true: There is indeed one born every minute.
Interesting. My own POV is that if John Wanamaker saw the current state of advertising, he would quickly conclude that he had it easy.
20 years ago, we worried about how media was fragmenting. Now that media is atomizing (we're well past the fragmentation phase), marketing efforts are in a very literal sense "all over the place".
To whom should we assign credit for a successful sale? Is it the TV advertising? Our paid search effort? The web banner campaign, or the CPA campaign? If we're pretty sure our PR department deserves the gold star, how much credit should we give the press release vs. the social media campaign? Isn't it more likely that when success happens, it's a sort of alchemy from all of these touchpoints working in some synergistic way?
But, for the sake of discussion let's pretend we could figure out with certainty *exactly* what drove our sales in the last campaign.
What makes us believe that this formula would work predictably (or work at all) in our next campaign?
In my opinion, we have more data than we've ever had -- which is not at all the same thing as having more insight or more knowledge.
We don't need to bury John Wanamaker. The spreadsheets we're relentlessly churning out in search of the "aha!" moment where we know exactly what each penny spent returns to the bottom line have him buried quite deeply already.
Part of the problem, it seems to me is whether or not anybody will accept and act upon the measurements.
For example, in over 50 years of Starch tests, not once did reverse type out-pull straight type. But, did that kill off reverse type? Or how about the tests that show that all-caps headlines don't get read or that headlines ending in periods diminish body copy readership? Or that full justified type gets higher readership than ragged right?
Most of the "professional" advertising practitioners I know aren't even aware of most of these things. And if you make them aware, they fall back on the concept of "exceptionallism" and insist that while these rules may be true most of the time, they are not true in the specific case of *their* work.
It's not so much that the knowledge isn't out there but rather that we ignore it.
I agree that the marketing team needs a greater understanding of their own input/output dynamics. In my work as a media analyst I spend a lot of time explaining to clients that they need to own this knowledge to become better decision makers. After spending this summer participating in an exhaustive media agency pitch, my worries grew. It appears agencies are no longer happy with brokering media. They've hired economists and now offer modeling - tools and insights galore. Their charts and graphs impressed everyone, yet no one questioned procedure. (I was the only one who asked on what basis they linked their results).
Objectivity was never the strong suit of media agencies, yet if media agencies are becoming the front-line of marketing metrics, who is going to draw the line between church and state? The client? Let's hope. But my experience has been they are too insecure of their own knowledge that they refrain from challenging procedure. Media agencies are very powerful and are doing all they can to retain or gain new clients. Throwing in some econometric modeling has become the one lure. If Wannamaker wanted to really know where his 50% was going, he needed only to check who planned his media.
Tom,
Very nicely put!
From #4..."Let's stop asking CMOs how they think their marketing teams are doing at measuring and improving payback..."
Better yet, let's hold a conference where we put two dozen CMOs on stage for a sort of spelling bee, call it an ROI bee. Ask each to work thru, right there on stage, how he/she would determine ROI for a basic three-touch campaign. Watch them stammer, hem and haw and probably crap their drawers.
The video of each CMO's performance would be required to play in the reception area of his/her company on a nonstop loop for 6 months.
"Integrated marketing" has been around for over 20 years. In Europe, where I spent a great deal of my advertising career, it was a no brainer. We didn't label it, just did it. That's what effective marketing is all about.
The total focus on measurement is one of the key factors of what's wrong with marketing today. At the end of the day, marketing and branding are about eliciting emotional responses. Yes, measurement is important as a strategic tool- but we need to engage our audience, not just create a knee-jerk purchase decision. In the "old days", we did as much tracking as we could, but advertising was at least 50% hit or miss. Yet, we built incredible brands with high degrees of loyalty by being consistently relevant and appealing to the emotional needs of our audience(s).
A couple of relevant background links:
http://www.advertisinghalloffame.org/members/member_bio.php?memid=814; and http://en.wikipedia.org/wiki/John_Wanamaker