Commentary

Truth In Advertising?

by Jason Heller , March 8, 2011

When was the last time you stopped to question some of the fundamental truths in digital media? Have you ever challenged common industry practices that may simply be riding the path of least resistance rather than fulfilling strategic imperatives?

Unfortunately, we rarely have the time to slow down and ask the difficult questions. As the newest member of the Online Spin team, I plan on fostering conversation, or at the very least providing fodder for thought, regarding a series of important and even controversial topics within the digital marketing industry today. Momentum and a demanding business climate keep us moving forward at status quo until enough pressure forces us to rethink some of the fundamental driving principles, and elements of our day-to-day routines and processes that we once held as truths. Join me in a healthy journey to question everything we know -- to confirm the approaches that contribute to business growth and to debunk practices that sustain mediocrity.

So here are a few topics on my mind this week:

Clients, have you hugged your agency lately? Agencies have been forced to compete in an environment where they are being paid to execute, and strategic thinking tends to be an expected value-add. Thus agencies are motivated to execute. Clients continue to blame the agency when the strategy and digital business planning doesn't translate into effective execution. But very few clients are willing to take ownership of, and thus the responsibility associated with, strategic planning. It's a vicious cycle. I'd argue that the agency model isn't broken per se, but rather the client/agency relationship is broken -- and there are two sides to that coin.

Agencies, clients are becoming savvier. Armed with a new generation of marketing staff, many recruited from the agency world, it is not unheard of for clients to be as knowledgeable as some of their day-to-day agency staff. Additionally, as agencies grow their client base and expand service offerings, it can be difficult to ensure that every hire is a homerun. Selecting the right agency team and fostering productive relationships can be taxing for clients , as every agency claims to have "the best people, processes and technology."

In an industry full of data, we lack significant insights. Data and analytics can be fairly black and white for direct marketers. However, brand marketers have struggled to decipher a growing palette of shades of gray. While online advertising is indeed growing, large marketers need more research that models the correlation between digital ad exposure and marketplace sales. While econometric modeling is the exception and not the rule for most clients and agencies, brand marketers have one crude predictive model that has been universally accepted for traditional media. The GRP (technically TRP) is a metric that can predict a range of sales volume based on historic levels of media weight. While I am not an advocate of jamming the square GRP peg in a somewhat round digital hole, conceptually, marketers do need the ability to predict the marketplace impact of digital investments. After all, it's just the Internet, not a magical parallel universe. Developing a media mix model that can be replicated is no overnight process. It takes leadership and commitment on both the client and agency side. I'd also like to see the IAB partner with several large agencies and brands to revisit a modern day-version of the XMOS studies that held so much promise before falling off the face of the earth in 2004.

As proud card-carrying digital champions, it is our responsibility to challenge the momentum of the status quo and to ask the difficult questions. We must take a tough-love approach to our darling digital media channels. In the long run, this will make us better marketers who develop and produce better marketing programs.

What are some of the burning tough questions on your mind?

advertising, digital

6 comments about "Truth In Advertising?".

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Bruce May from Bizperity, March 8, 2011 at 4 p.m.
Gross Rating Points? How do they connect to sales? Without engaging the customer through some kind of meaningful follow up communication or business process any advertising metric you choose proves nothing. I agree with you that we need to focus on this. Doing that requires that we get our clients to understand that advertising only opens the doors to conversions (however you want to define that). Developing customer relationships (and sales) requires much more and as advertising professionals we continuously fall short of teaching our clients how to leverage the response that ad campaigns can create. So a million people visit your website... so what? What do you do with them once they get there? And how do you integrate that activity into future campaigns? Those are the critical questions we should be asking our clients.
Reply

Jason Heller from AGILITi, March 8, 2011 at 6:21 p.m.

Bruce - different issue/context.

For direct marketers, sure - it's all about the linear relationship of ad-->sale.

But for the largest advertisers, and any brand marketer who does not have control over measuring point of sale, the predictability of the performance of significant media investments helps drive somewhat accurate forecasting of their businesses.

In no way am I advocating GRP - in fact, I have been a fairly staunch opponent of using it online for various reasons (which maybe I'll get into in a future column).

But I can support the concept of a proxy metric that can predict the outcome in the marketplace of certain levels of media weight / investment. This is what these same advertisers have wanted for digital media for years. In the current state of the market, that predictability does not exist for various reasons.

Digital media has become a significant direct response channel for so many categories - driving search to become the largest % of ad share and driving the current explosion in DSP-based buying. But there are so many advertisers that will never be direct marketers. We need to help them too.

Jan Van den bergh from Holaba, March 8, 2011 at 6:26 p.m.

When 20-50% of all purchase decisions are directly influenced by recommendations during face2face / person2person talks, how can you still believe that measuring the good old GRP has the ability to predict the marketplace impact of digital investments. Measuring permanently the recommendation power of your brand (NPS, Holaba ...) improve what is needed to increase that power ... and influence the influencers. That's the way to go.

Sarah Federman from Telmar, March 9, 2011 at 5:03 a.m.

We've had some good fun going beyond GRPs ourselves. Rather than doing expensive custom ROI models, Telmar joined with Marketing Evolutions to create ROI norms across verticals. We found that the impact of an ad depends on the marketing objective (new launch, brand awareness, etc). This 'combined' with R&F and GRPs gives our clients a new spin. sarah@telmar.com

Jason Heller from AGILITi, March 9, 2011 at 3:54 p.m.

@Sarah - "norms" is such an oxymoron these days isn't it.

Are you modeling the impact of changing mix models? Are you modeling impact of digital weight variations? Would be very happy to get in touch to hear more if you are!

Clyde Boyce from Firefly Media, March 13, 2011 at 10:50 p.m.

Interesting that the majority of responses focus on metrics and norms versus the first half of your article discussing agency/client expertise and relationships. As you pointed out every agency claims to have the best people, processes, and technology. Seems to me only one agency can truly make that claim and fame is fleeting so it actually can only claim it for a very short time. My belief is agencies rely to much on intuitive decisions rather than data and analytic insights. They struggle just to get the day-to-day work done which causes them to take the path of least resistance which leads to mediocrity versus strategic innovation. The truth in advertising is that few of those who claim to be experts....are!