Marketing effectiveness at critical juncture

Without a new understanding between marketing and finance, establishing a culture of marketing effectiveness within an organisation is impossible, according to speakers at EffWeek 2017 run by the Institute of Practitioners in Advertising (IPA) in partnership with the Market Research Society (MRS) and other industry bodies.

“Don't underestimate the crisis in growth, especially FMCG,” said Martin Deboo, consumer goods analyst at Jeffries International. “With top line growth at 2-3% for many organisations, it’s the bottom line that’s now being squeezed, and that means budgets.”

With growth at its lowest and marketing budgets under huge pressure, the clock is ticking for marketing teams to mobilise themselves while they have the resources to do so.

The very existence of EffWeek – only in its second year – is evidence that marketing is at a critical juncture. In fact, said the IPA’s new president Sarah Golding, effectiveness is actually getting worse.

“Growth in digital marketing means we are ignoring channels that work,” said Golding. “It’s great at delivering quantifiable numbers and short uplift today. But we are getting worse at effectiveness.”

More rigour and accountability is what finance directors need to justify the marketing budget. They understand the value of brand, said Deboo, but marketers need to change their language if they want the C-suite to take notice.

Fran Cassidy, board director of The Marketing Society, quoted one finance director who was interviewed for a new IPA report Culture First: “I am a finance person. I like certainty. I don’t give much weight to the brand equity stuff.”

The London Business School’s Patrick Barwise outlined a number of factors that have contributed to this new era of marketing investment scrutiny. Key is the growth in digital marketing that has led to an emphasis on short termism – on sales activation rather than long-term brand building. Data analytics and A/B testing has reinforced this obsession with fast responses and quick wins.

Also, according to Barwise, the procurement function is now agreeing the majority of deals between clients and agencies, and activist investors are increasingly involved in the management of companies and looking to cut spend.

However, there are some encouraging signs, according to Cassidy. “Customer experience metrics are being incorporated into commercial decision making. One third of organisations interviewed have created specialist effectiveness units over the past three years. And by far the majority of the sample said that improving marketing effectiveness is a priority for them.”

The challenge is to fill the skills gap in marketing teams around evidence and evaluation, especially within client organisations. A case study from Diageo saw the rollout of new global measurement software and a global training programme that includes marketers, finance and agencies, establishing common performance metrics with financial performance short- and long-term metrics.

Cassidy referenced a data science team interviewed in Culture First whose ambition was to be obsolete in three years – by then the data and skills to make use of it would be available and dispersed across the organisation.

Judging by this conference however, much needs to be done between the present and that future vision to embed a culture of effectiveness across the marketing function.

EffWeek 2017 events continue all week.

Christian Walsh is digital director at the MRS.