You’re invited to AW2020, Advertising Week’s digital event, September 29-October 8 to help work through solutions to some of the advertising and marketing industry’s biggest problems. From climbing unemployment to racial inequality and an unclear future, now is the time, more than ever, to think and work together. Register to learn more.
- The Future of Advertising: Omnichannel & Hyper-Local - July 16, 2020
- An Economic Downturn May Make Us Reassess Everything In 2020 - December 19, 2019
- We should leverage the urgency of current economic indicators to create new models of measurement that will hold us in good stead through both growth and contraction.
These are turbulent times in the marketing world. The global political climate is uncertain and troubling, and there have been persistent whispers about an inevitable economic downturn. There are differences of opinion on just when the next recession will actually happen, but many businesses and consumers still suffer from the residual anxiety caused by the last downturn due to the global market crash a decade ago. Also, Trump’s trade wars with China and others have added to the anxiety of brand marketers as my colleague Stan Coignard recently explored.
Economic uncertainty typically forces companies to reassess everything, sometimes even bedrock principles that are hallmarks of their brand governance. So as long as our industry is in a contemplative mode with 2020 approaching, I’d like to take this opportunity to open a conversation that would crack open one of these core pillars that has driven our industry for generations. Instead of evaluating campaign success on traditional branding key performance indicators, we need to finally commit to that long-elusive Holy Grail of accountability–the business outcome KPI. Or true ROI, if you will.
Yes, 2020 is finally the time for us to collectively put to rest our acceptance of advertising waste as long articulated by the Wanamaker notion paraphrased here that “half my advertising works; just don’t know which half.” If companies are grappling with uncertainty in terms of their supply chains and macroeconomic threats like new e-commerce trends, a purer accountability model will sit well with their boards and the public and private markets that hold their feet to the fire.
The luxury of a growth economy kept us complacent in the past about making this paradigm shift. We should leverage the urgency of current economic indicators to create new models of measurement that will hold us in good stead through both growth and contraction. The technology and methodology finally have coalesced and matured to a level that business outcome KPIs are no longer a pipe dream but a true reality of possibility. For the first time, after 15 years of the refinement and effectiveness that comes through trial and error, the technology exists to optimize a brand’s advertising spend by marrying a customer’s offline journey to his or her online footprint in real-time. Big advances in mobile and location targeting have been the glue joining together these disparate behavioral profiles in a privacy-compliant manner as we all brace for the California Consumer Privacy Act (CCPA) on January 1st. Machine Learning advances have also, of course, played a critical role in the evolution of corporate tech stacks.
Another strong argument against campaign measurement inertia would be a competitive imperative. If you are running a major piece of Fortune 500 business at a big holding company, you are probably aware that marketers have already begun to walk the walk when it comes to putting business outcome KPIs before branding KPIs. Chief Marketing Officers have certainly found religion in this regard. It has become crystal clear to CMOs–the forward-thinking ones anyway–that they can no longer get away with their departments being cost centers. CMO’s are starting to align much more closely with Chief Revenue Officers to transform their P&Ls to profit centers. This CMO-CRO alignment can generate better margins that will make them the best friends of the CFO.
I am confident that agencies will make this pivot to align their missions similar to those of their clients. With management consultancies–who have shaped their client compensation models around the importance of business outcomes– continuing to encroach upon media and creative agencies’ traditional turf, there is no lack of incentive for agencies to evolve.