Is this really the 3rd age of effectiveness?

By Nigel Hollis

I have just watched The 3rd Age of Effectiveness presentations. Kudos to Les Binet, Dr Grace Kite, and Tom Roach for their compelling, empirically-based presentations and the IPA for making those presentations available to those of us not at Cannes.

Five things stood out to me, but the presentations also triggered memories of this post from 2014 where I called out the importance of memory in influencing sales over time. All three presenters highlighted that the majority of advertising’s effect on sales comes from long term effects. Those long term effects only happens if people remember the ideas and impressions communicated by the advertising. And I cannot help wondering if we are really entering the 3rd age of advertising effectiveness. Thanks to effective measurement, we know better now, but are we really leveraging that understanding to make more effective digital advertising, particularly that which builds brands over the long-term? I know digital can do so, but why do I still see so much crap digital advertising? Setting that aside, here are my five takeaways.

Attribution is a lousy way to understand effectiveness

Les Binet walked us through why even multitouch attribution gives marketers the wrong understanding of what is effective and what is not. Comparing results from attribution and econometric modeling across a range of cases he finds the effect of paid search to be over-estimated by a factor of 2 and brand TV under-estimated by a factor of up to 10.

Advertising pays best when it works over the long-term

The biggest problem with attribution is that it does not give credit for indirect or delayed effects. Binet confirmed that long-term strategies win out over short when it comes to delivering profit and confirmed the importance of video – both TV and online – in delivering longer-term effects. Intriguingly, Dr Kite suggested that normal advertising (rather than that entered for the IPA Awards) might benefit from a budget skewed even more to brand advertising than Binet & Fields much quoted 60/40 and she added print (paper and digital) and outdoor to video when it comes to doing long-term well.

Advertising effectiveness hit bottom around 2015

Dr Kite overlaid the Gartner Hype Cycle with data from the ARC database to suggest that advertising effectiveness had been on a slow decline from 2005 to 2015 as marketers grappled with how best to use online advertising. Effectiveness is now improving, largely driven by product categories where people do their research and purchasing online. In my 2014 post I talk about the power of impressions and memories to motivate purchase. Now, if marketers really have got smarter about how to use online to build lasting memory structures, would we not also see a rise in effectiveness for brands bought offline?

You can build brand memories with digital

Tom Roach explicitly called out the importance of gaining attention and creating memories if advertising is to have a long-term effect. He also affirmed that digital, particularly video, can be just as effective as broadcast, provided the content is adapted to the specific context and is designed to create brand memories not just trigger an immediate response.

Obey platform effectiveness rules, break category advertising rules

If marketers are going to leverage the true power of digital, according to Tom Roach, they must learn the rules of a given platform to make sure that their content gets attention, and they need to leverage the power of creativity to build memory structures that make people more likely to think of and choose the brand. The latter requires breaking the category advertising rules, not abiding by them. This is probably why TikTok finds that native created advertising works better than non-native – native creators know what gets their own attention and are trying to reach similarly minded people.

Are we experiencing a 3rd age?

The implication of all three presentations is that we are finally getting digital advertising right. But are we? I suspect that the reason Dr Kite finds effectiveness is improving for categories researched online and flat for offline categories is more to do with a changing category mix and higher average purchase price in the online data set, as much as changes in the way digital advertising is created and deployed. Maybe I am wrong, but unlike Tom, I do not see a lot of attention-grabbing ads in my newsfeed. I do see a lot of ads for products I have already bought. So, lots of failed sales activation, little brand building.