How the digital revolution led to a greater justification for advertising

How the digital revolution led to a greater justification for advertising
The Media Leader Podcast

Businesses have started to see marketing and advertising as investments rather than costs.

What’s behind that change, and what has been the effect on the broader media ecosystem on a renewed interest in measuring effectiveness and impact?

Reporter Ella Sagar sat down with editor-in-chief Omar Oakes and columnist Nick Manning to discuss how advertising is now being considered a “proper business discipline,” which has, in turn, put more pressure on media owners and audience measurement companies to prove their worth.

Listen to the clip, or read a transcript of the conversation (edited for clarity) below.

Ella Sagar: Impact is a big word that we’ve been talking about since The Future of Media, and effectiveness we’ve been writing about a lot [too.] What’s your take on this [subject]?

Omar Oakes: We have been writing about it a lot. You mention The Future of Media; every session that we put on at that — our flagship event where we try to talk about all things media — we can’t put on enough stuff about data and measurement.

Again, to reference ITV, I suspect it’s part of that part piece as well where there is so much pressure on media owners to prove the effectiveness of their mediums.

I was talking after the [ITV] presentations to an agency planner. I asked what they thought of Kelly [Williams] and Simon Daglish’s talk and they said, “I just think they have to work so much harder in terms of what they’re selling.”

You look at the charts and the presentations that they’re putting on at a sales event, and he was like, “What’s left for media agencies to do?”

So why are we talking about this so much? On the audience measurement side, these companies are now owned by private equity, they’re under pressure to deliver more. Media owners are under pressure to deliver more. Advertisers demand a lot.

Nick Manning: What I liked about the Media 3.0 theme at The Future of Media conference was the focus on impact and effectiveness.

This is exactly what it’s all about, and to a certain extent it’s part of the zeitgeist of times being hard. What do you do when times are hard? You focus on ROI. Part of this is driven by the need to demonstrate effectiveness.

Hats off to Ian Whittaker who is doing a great job of trying to say, “We know that big companies in their earnings statements and analyst calls are saying we believe in the ability of brands to build business, to grow revenue and profit.”

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This wasn’t always the case. It’s starting to be the case much more now.

It’s quite a good sign. It’s a sign that what we do is starting to be recognised more and more as being a proper business discipline. Therefore, we have got to make it more like a proper business discipline in terms of proving our worth, using statistical analysis in a different way, [and] having more data to prove effectiveness.

The reason I like the word “impact” is because it’s more than effectiveness. It can also be about changing people’s attitudes about sustainability, or other things.

ES: Behaviour change.

NM: And attitudinal change as well.

When this word ‘impact’ was coming through at the conference, I was thinking “Actually I keep talking about effectiveness because I was thinking it’s the thing that matters most to brands, but actually I like the word impact as well because it kind of takes some softer values and allies it with some of the harder effectiveness measurements as well.”

Advertising has the ability to do both of those two things really well, but only when it’s well executed.

It’s all about, how do you make the media work hardest at delivering impacts and effectiveness for brands.

Not just brands, actually, because some clients aren’t just brands. The Government is not just a brand.

OO: It kind of is, isn’t it?

NM: Well it is, but its advertising is trying to change behaviour and attitudes more than it is about building the ‘Government brand.’ Though I’m sure they’re trying to build the ‘Government brand’ by doing that.

We need to be conscious of the fact that not every brand is a brand, if you know what I mean. They have different objectives.

For some people, advertising is trying to do more of the softer stuff, the “impactful” stuff. So, I would argue, for example, if I’m a big energy company like Shell, I’m probably using advertising more to soften attitudes towards me than expecting people to go fill up their cars at a Shell station instead of someone else’s filling station.

So I quite like the fact that impact and effectiveness came through as parallel themes from that particular conference.

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ES: “Impact” covers a bit more.

Just to pick up on your point, you were saying that it has not always been the case that the importance of brand-building, marketing and advertising was being discussed in this way by those board of directors.

What has changed? You said that it’s been changing over time. Is it because there’s a justification that we can provide now?

NM: It’s a really interesting question. Because I’ve been around a long time, I can talk about this with, I think, with some authority.

Marketing directors, CMOs, advertising; it was seen as being a business expense, not a business investment. It sits on the P&L (profit & loss), not on the balance sheet, all that sort of stuff.

I don’t know why it has happened, but I think that’s changed now, and it’s now seen as being a proper business driver.

If I were to pinpoint one reason for that, it’s because of digital.

There is now a much clearer picture of inputs and outputs. In other words, digital media allow you to measure, at least ostensibly, what you’re doing. So I would say that the digital revolution has led to that sea change.

In the past if you advertised you had really no proof of what made something work.

If you advertised and there’s no return path, no interactivity, then your sales might go up, but you might go, “Oh yeah but we put our prices down or we got more distribution, or our competitors did something different.”

Now it’s much easier — it’s not easy, but easier — to make that distinct, to track it across time.

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