Why Marketing Effectiveness Continues To Erode

The good news is that a U.S. fiscal default won't compound global macroeconomic concerns. The bad news is that there continues to be weakening sentiment in the U.S. and worldwide, and by at least one independent measure -- an ongoing tracking study by the U.K.'s Data & Marketing Association (DMA) -- it comes at a time when overall marketing effectiveness continues to erode.

In fact, based on the DMA's analysis, which is derived mainly from surveys it conducts among its annual awards entrants, overall marketing effectiveness remains below pre-pandemic levels for the second year in a row.

While that assessment comes from self-reported data, it is a big pool of data -- 1,200 DMA awards entrants over a six-year period -- and DMA Director of Insight Ian Gibbs believes it is stable and directional enough that it reveals a potential minor crisis for the overall effectiveness of marketing -- or at the very least, how it is measured.

"Proving marketing effectiveness has become a complex task," he says citing the increasing complexity, as well as fragmentation of marketing channels.



To help organize those metrics, the DMA released a new CMO Measurement Toolkit and published a companion report advocating some steps that marketers, agencies and the media can apply to get more ground truth around the return on marketing expenditures.

The report recommends focusing on five key actions:

  • "Measuring what matters" to a marketer's actual business.
  • Assess which metrics are linked explicitly to their business outcomes.
  • Contextualizing marketing performance against those explicit benchmarks.
  • Stimulating future consumer demand vis a vis "brand-building."
  • Rediscovering the "lost art of creativity" to drive brand response.

Some of those recommendations may seem like obvious no-brainers, but two of them are especially notable to me, including the DMA's push for brand-building, which is something I think the marketing industry has moved too far away from due to its increasing push for short-term performance KPIs.

The other big takeaway is the fact that many marketers are still relying on loosey-goosey KPIs that are either vestiges of quaint times when they could afford less-than-precise effectiveness measures, or are just something that makes them feel good, like "brand lift." (Has anyone ever seen a brand-lift study in which it went down?).

Most damning of all, in the DMA's most recent analysis, it found that only 8% of all the marketing-measurement KPIs it pooled from marketers in 2022, only 8% were explicitly tied to metrics that have a material impact on their business outcomes.

"The really big factor is sub-standard measurement," Gibbs confided in me during a briefing following the release of the report and the new toolkit.

Specifically, he says the DMA's database includes "180 different metrics that people use to measure advertising effectiveness," but that 92% doing relate explicitly to business outcomes.

In fact, he says 40% of all those metrics relate to "less meaningful" criteria overall.

"The problem," Gibbs concludes, is that marketers "are not speaking the language of their boards."

2 comments about "Why Marketing Effectiveness Continues To Erode".
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  1. Ed Papazian from Media Dynamics Inc, June 5, 2023 at 10:51 a.m.

    One of the reasons why KPIs play such a surprisingly limited role in advertising is that large amounts of ad spend are based on direct response---like search----and image shaping, "must buys" like TV sports.

    In the former case, the advertiser usually pays only when a response is made so it doesn't matter how many "exposures" were generated or whether the ads were sent to the "right people"---though this obvously helps---if the added "targeting" cost is reasonable. In the case of sports----and one might add other high CPM forms of TV like news, specials and even prime time broadcast network entertainment fare---- using these is often mandated based on "intangible benefits" or brand image needs or promotional tie-ins with the leagues and top players---as is so common with sports. So it's not surprising to find that attempts to survey how advertisers evaluate the "marketing effectiveness" of their efforts are frustrated and replete with seeming inconsistencies. Many marketing/advertising decisions are still being made by seat-of-the-pants judgements or because, "That's the way we do it", thinking. And, at many companies there is no serious effort to challenge this basically unscientific approach.

  2. Robert Barrows from R.M. Barrows, Inc. Advertising & Public Relations, June 5, 2023 at 11:58 a.m.

    One of the key metrics that every business in the universe should be using is some easy-to-use Advertising and Marketing math called "The Barrows Poplarity Factor."

    It’s math that will actually let you QUANTIFY the relationship between your Advertising and Sales and you can use the math to help you fine-tune your entire marketing program.

    The math will give you more of the information you need to make key marketing decisions with far less risk, and businesses of all kinds can use the math to help them increase their sales, increase their profit and decrease their risk.

    You can read more about it and download a booklet called “The Barrows Popularity Factor” for $4.95 at

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