Response - Clients
Welcome to Response magazine – International Marcomms Insights From Ebiquity.
International marcomms insights from Ebiquity
Issue 26 - Q1 2017
The pre-pitch checklist: five crucial steps for advertisers
The considered approach that advertisers are starting to take before putting media business out for pitch.
Laetitia Zinetti, Ebiquity’s Practice Principal for Strategic Media Consultancy, welcomes the considered approach that advertisers are starting to take before putting media business out for pitch.
For advertisers today, the increasingly digital media landscape offers unprecedented opportunities to connect – often directly – with consumers and customers. Yet the sheer complexity of the ecosystem threatens to overwhelm even the best-informed marketer. This threat is nowhere more obvious and potentially more damaging than in many advertisers’ perceived need to change media agency. This is often driven by a desire to capitalize on the opportunities they believe their current agency partners may be failing to seize on their behalf.
Over the course of the last year, we’ve been involved in more than 100 pitches for advertisers looking to refresh – and often change – their media agency of record. Some of these have been local, single-territory deals; many more have been regional, or global, multi-territory relationships. A quarter have been with the world’s leading advertisers. What has emerged during engagements with bigger, progressive advertisers is the increasing amount of work they now undertake before they ever go out to tender.
Changing media agency is an upheaval that advertisers should not enter lightly, and preparing the way for transition to a new agency partner – or a refreshed relationship with an established agency of record – requires both outward and inward-looking analysis. Advertisers need to make themselves aware of and understand what’s available in the market. But they also need to ensure that their own organizations are set up to succeed with new agency partners.
During recent engagements, we’ve observed five key trends among advertisers which show how behavior over agency partner selection is evolving.
"The sheer complexity of the digital media ecosystem threatens to overwhelm even the best-informed marketer."
1. Analyze the agency
Progressive advertisers are increasingly auditing the capabilities of their agency partners to understand what works – and what needs addressing – within current relationships and processes. This analysis often covers a diverse range of capabilities assessment, plus also data access rights and transparency, as well as identifying the detailed composition of the right tech stack to meet marketing objectives. This enables advertisers to define the key issues and challenges, set benchmarks, and prioritize what needs to change.
2. Audit internal organization
Understanding existing – and competitive – agency capabilities is critical; agency partners clearly need to provide what advertisers want and need. But it is equally important for advertisers to fully specify and articulate their own internal organization and processes to understand whether their own structure allows the agency to deliver what’s required of it. Often it does not.
Advertisers need to set brand requirements, business objectives, and KPIs. What’s more, they need to ensure they have the right talent and internal organization to support the agency. This means having the right people in the right roles, as well as ensuring that key internal partners – particularly marketing and procurement – understand and respect their mutual roles. The key outcome of this internal analysis is to define the optimum process and governance for future agency relationships.
3. Transform the organization
Given the unprecedented pace of change in marketing and marketing technology, every advertiser faces the imperative to transform their business to be fit for the digital age. This means advertising in its broadest sense, but it also encompasses the entire customer journey, taking in an increasingly broad cross-section of disciplines – from marketing to insight, customer relationship management to human resources, internal comms to employee engagement. Too often, however, the component parts of the potentially integrated whole operate in disconnected silos.
In pre-pitch work, we are increasingly observing progressive advertisers taking meaningful strides toward genuine transformation of their marketing communications infrastructure. This includes evaluating how they plan to embrace the evolving media landscape, restructuring so they stop working in silos, and building and executing better integrated campaign plans. It requires advertisers to be more agile, more data minded, and ready to be in a permanent state of test and learn – to experiment with and then optimize new communications opportunities as they emerge. In turn, this helps to shape the role that media agencies should play as genuine partners in this transformation.
"In pre-pitch work, we are increasingly observing progressive advertisers taking meaningful strides toward genuine transformation of their marketing communications infrastructure."
4. Prepare the contract
Before requests for proposals are issued, we find that progressive advertisers are increasingly bringing marketing and procurement together to draft and prepare a contract that is truly fit for purpose and for advertisers’ needs. Then, and only then, is it issued as a prerequisite for agencies participating in the pitch. The purpose – and benefits – of this approach help to guarantee data transparency by ensuring that all rights clauses are included in the contract.
5. Take control of adtech
A recent survey we conducted with the WFA showed that 70 percent of advertisers spend money with adtech and martech vendors governed through contracts held by media agencies on advertisers’ behalf. Often, these contracts fail to deliver data transparency. However, 30 percent of advertisers hold contracts directly with vendors, even if they ask their agencies to administer adtech – such as ad servers and ad verification – on their behalf. This proportion is growing and is evidence of advertisers looking to take back control of both their relationships and their data.
By taking these steps before putting their media agency contracts out to tender, progressive advertisers are establishing the elements they need to write better, more appropriate briefs that suit their circumstances. This, in turn, generates better responses from the most appropriate partners.
Advertiser-agency relationships typically last at least three years, though often much longer. So, this approach enables advertisers to set better relationships in the medium to long term with the winning agency – or, indeed, to reset the relationship they have with their existing agency. It enables them to test which agency has the best fit and the right understanding of its challenges, the best capabilities, and the most suitable talents to be their partner.
It really does make sense to look before you leap – to plan before you pitch.
 See ‘Breaking free from the swim lane mentality’ by Andrew Challier in this issue of Response
When was the last time you reviewed your media agency?
- Last year
- During the last three years
- Three to five years ago
- More than five years ago
Laetitia is Practice Principal, Strategic Media Consultancy, at Ebiquity, and has over 14 years’ media and marketing experience. She joined Ebiquity in 2010 as Managing Director of the Company’s French operations, moving from multinational automobile manufacturer, Nissan, where she was European Media Manager for more than four years. She then became Group Strategy Development Director at Ebiquity in 2014 where she was responsible for future-proofing products for the media practice.
Moving beyond the ANA report
The actions that marketers need to take to achieve transparency across all their media activities.
Bill Bruno, CEO of Ebiquity, North America, addresses three potential misconceptions about the ANA initiative and restates the actions that marketers need to take to achieve transparency across all their media activities.
2016 was the year in which debate about media transparency moved out of the shadows and into the mainstream. First came the study for the U.S. Association of National Advertisers (ANA) from K2 Intelligence. This was followed by the ANA’s recommendations for members – the report written by Ebiquity and FirmDecisions titled ‘Prescriptions, Principles, and Processes’ (more details here) – together with a new, model, media agency template contract (see here).
"It’s important for advertisers to address the wider issues associated with transparency to improve the return on their media dollars."
The process by which the ANA’s members adopt these recommendations is still just beginning. Overall, advertisers seem to have considered the recommendations to be well balanced. What’s more, they highlighted advertisers’ own responsibility for managing their media agency partners moving forward, rather than relying on agencies to do this job for them.
However, there was so much attention paid to the issue – in the media and in conversations between advertisers, their agencies, and their advisors – that, with some justification, many found it difficult when the term ‘transparency’ was brought up in conversation. This is unfortunate, because it’s important for advertisers to address the wider issues associated with transparency to improve the return on their media dollars: to become better clients and more effective advertisers.
‘The ANA review was all about media rebates’
While the reason for the market review was undoubtedly the contradictory viewpoints regarding the existence and extent of rebates in the US media market, both the K2 Intelligence study and the subsequent recommendations go much further and deeper.
The K2 Intelligence study clearly demonstrates that there are numerous media trading incentives in the market. However, one of the most important points in the entire study is the broader definition of media transparency (section 2.2.1). Essentially, advertisers need full oversight of all the factors that help them make well-informed media decisions.
This can take many forms. It includes access to the right research and data, the certainty that media plans are not compromised by conflicts of interest, and the best possible reporting on the effectiveness and efficiency of media performance. All of these can be adversely influenced by media trading incentives. And it’s impossible to measure the effectiveness of all marketing investments without full transparency into how budgets are allocated along the full length of the adtech and martech supply chain.
While the study was not just about rebates, it’s also clear that the word ‘rebates’ also covers a wide range of media trading incentives, including free media inventory. Globally, there has been a marked move away from cash rebates to other forms of incentive, and free or heavily discounted media space is in the ascendant. Media agencies’ practices are evolving to try to ensure that certain rebates can remain undisclosed to advertisers (and therefore not returned to them). In turn this provides greater flexibility and higher margin opportunities for the buying entities. So, the use of ‘rebates’ as a generic term can also lead to an understatement of the wide range of trading mechanisms in the market, many of which are described in the K2 Intelligence study and which advertisers should know about.
Lack of transparency is also fundamentally a data issue, as demonstrated by the difficulties experienced by both Dentsu (see this Financial Times article) and Facebook in 2016. For Dentsu, lack of transparency over trading led to hundreds of suspected cases of overcharging more than 100 advertisers, while Facebook was forced to admit it had overestimated average viewing time of video content by as much as 80 percent, over two years.
As the data-rich customer journey continues to increase in complexity, advertisers need to have confidence in and ownership of the data which their marketing activity generates. If they can’t be certain about the accuracy of the data, and if they don’t have the freedom to interrogate it using the technology platform of their choice, they will be unable to properly understand the impact and effectiveness of their media choices. This is the reason that data is increasingly viewed as the true currency of the advertising industry.
‘Transparency is only a US issue’
Since the release of the study and recommendations, there has been a tendency outside of the US to understate the relevance of the ANA exercise to other countries. This is partly because media trading incentives have been more commonly discussed and known for many years in other markets.
This is also because of the misconception that the review was only about rebates. The reality is that the ANA’s recommendations for advertisers are relevant right around the world. They describe the steps advertisers should take to take control of media governance, improve accountability, and achieve transparency. These principles are universal, and advertisers need to focus on internal housekeeping to ensure that they are properly protected.
Some in the industry suggest that the historic presence of rebates has led to tighter and more up-to-date contracts and audit rights in other markets, although it is true to say that those markets still lag best practice as described in the ANA’s guidelines. This is well demonstrated by recent data from FirmDecisions showing that contracts are frequently incomplete or unsigned right across the world.
Fundamental issues such as the advertisers’ free choice of auditor and audit scope also occur throughout the world. The new media agency template contracts from ISBA in the UK and the ANA go beyond former standards in helping advertisers achieve the accountability and transparency they need, and other countries should consider adopting similar standards.
‘The ANA review has harmed client/agency relationships’
There has been significant coverage of the differences between the approach taken by the ANA and the transparency initiative conducted by the Association of Advertising Agencies (4A’s) in the US. As widely documented, the ANA and 4A’s had diverging views on the contents of a mutual media transparency protocol. The 4A’s issued a statement that suggested that the ANA recommendations document was at odds with the agencies’ own experiences with clients, but any individual client/agency conversations are self-evidently between the two contracting parties.
It is not surprising that the agencies’ experience of talking to clients varies from the ANA’s new recommendations and draft media agency template. The purpose of the ANA review was to establish the facts as an essential basis for normalizing and improving relationships between advertisers and their media agency partners.
So, the K2 Intelligence study was not intended to be ‘anti-agency,’ but rather was designed to help provide the foundations for an open dialogue. This is a result that should benefit all parties, and is in the interests of the industry as a whole.
The recommendations produced by Ebiquity and FirmDecisions aim to provide the ANA’s members with a best-practice guide to how they should manage their media investments. The emphasis in the document is on the advertisers’ responsibilities, and underscores the need to have clear terms of engagement with agencies via a mutually agreed contract and a Code of Conduct. More details can be found here.
Moving forward, advertisers now have the opportunity and the blueprint to build better and more effective campaigns with clear measurement, governance, and accountability for all parties involved.
"The aim is to create more stable, clearer relationships. Such partnerships have always been at the heart of good advertising."
Ultimately it is important to remember that the K2 Intelligence study and the Ebiquity and FirmDecisions recommendations were designed to reveal facts and to provide a way forward in order for the ANA’s members to improve their media management at a time when it is sorely needed, given the scale and speed of industry change.
However, now that the industry dust has settled, it will be for each advertiser to decide how to take advantage of the ANA’s initiative for its own purposes. The outcome should be that more honest and frank discussions can take place between clients and their media agency partners, supported by clearer rules of engagement. They will be enshrined in better, more up-to-date contracts that are more suitable for today’s media market.
The aim is to create more stable, clearer relationships. Such partnerships have always been at the heart of good advertising. They are necessary for the industry to address, collectively, the new challenges which face all parties in the advertising ecosystem, such as ad fraud and ad blocking.
Perhaps most importantly, in moving toward a better industry, data is the new currency. If you own the data, you own the industry and thus your own destiny as an advertiser.
Bill Bruno is CEO of Ebiquity – North America. He began his career as the first employee of Stratigent, the global leader in multi-channel analytics consulting to enterprise level brands. At Stratigent, Bill quickly became CEO and led the company through its successful acquisition by Ebiquity in August 2013. He has actively worked in the multi-channel analytics space for over 12 years and has extensive experience helping clients navigate the ever-complex customer journey to generate ROI and create a high level of transparency across all marketing initiatives. In addition, Bill helped incubate and grow Ensighten within Stratigent before it became a separate company in 2009. Throughout the years, Bill has gained certification in every major technology within the analytics and marketing space and manages successful partnerships with over 100 solution providers in the industry. Bill holds a degree in Computer Engineering from the University of Illinois.
Breaking\ free from\ the swim lane mentality
Time to remove the swim lanes that are holding advertisers back from truly integrated brand communications?
Ebiquity’s Chief Client Officer Andrew Challier says it’s time to remove the swim lanes that are holding advertisers back from truly integrated brand communications.
Swim lanes exist across businesses, for obvious – and understandable – structural and psychological reasons.
Structurally, functions and areas of responsibility need to be led and driven by individuals who are charged by their organization to make a meaningful difference to performance within a specific area of expertise. Budgets are typically and traditionally allocated against these functions. Marketing, advertising, digital, and PR all have fees and expenses associated with execution, and the individuals leading functional teams are required to spend their budgets optimally to deliver against objectives.
Psychologically, being responsible for a specific function means that those in charge are more likely to clearly demarcate and argue for this function, at the expense of – or indeed in competition with – other functions to which the budget could be reallocated. How else could they make the case for more budget next year?
This approach apparently made sense when the different functions were relatively separate and there were no obvious benefits of distinct and discrete – if ultimately complementary – functions working together. In an omnichannel world, a world in which a wide variety of different skills and disciplines make interactive contributions to the experience of the customer journey, silos are not only unhelpful – they are actively counterproductive. In an environment where, say, the marketing team is responsible for driving traffic to a company website and the e-commerce team is responsible for improving conversion rates, both teams need to work in lockstep, not competition. There is no bliss in ignorance of what colleagues are doing down the hall.
"In an omnichannel world, a world in which a wide variety of different skills and disciplines make interactive contributions to the experience of the customer journey, silos are not only unhelpful – they are actively counterproductive."
Regrettably, in many businesses, complementary teams like these not only fail to work together – sometimes they either don’t know what the other is doing or, in extreme cases, that the other even exists. This can be the result of the radically different life cycles that different functions have – a year or less for marketing compared with two years or more for new product development.
Perhaps surprisingly, this even occurs in more modern, digital-first businesses less than ten years old, as well as considerably older organizations trying to adapt to the new realities of the digital economy. Too often we hear examples of retailers whose sales teams organize online promotions without finding out from buying teams first whether they have sufficient stock to meet the demand the promotion stimulates.
Why siloed organizations are bad for business
Swim lanes cause confusion within marketing and communications teams.
More importantly, they cause confusion for customers. A suboptimal customer journey with unnecessary friction, conflict, and contradiction along the way is quickly rejected by customers. One negative experience can outweigh 100 positive experiences, and negative experiences are much more likely to send users to social media in condemnation.
Under recent data laws, customers can ask brands to delete all data about them provided there are no legitimate reasons for retaining it. For siloed businesses that fail to remove all information from all systems – principally because individual customer records are splintered across the organization – there’s a risk of future contact if all traces of a customer are not deleted under a ‘right to be forgotten’ request. In Europe, businesses face fines of up to €20m for making this kind of mistake.
Swim lanes also make businesses function suboptimally. A disjointed business is much less effective than a joined-up business. They prevent knowledge share and shared learnings cascading through a business.
Working in silos means decisions are made in isolation. If you’re lucky, they’ll be complementary. If you’re unlucky, you’ll find potentially complementary functions working at cross purposes or in opposition to one another, like Dr Dolittle’s Pushmepullyou. And, worst of all, organizations that operate in clearly demarcated swim lanes actively lose money and alienate customers.
How to get this right
The utility of modern digital communications and the ease with which customers can interact with – and shape perceptions of – brands mean that marketing has evolved out of the hands of marketers and communicators and into the hands of those very customers. Accordingly, and to do its job with impact, contemporary marketing communications must work with a much wider collection of disciplines and functions within an organization than ever before.
Functions like marketing, sales, PR, digital, IT, social, insight, customer service, CRM, HR, internal comms, employee engagement … the list grows almost daily. And to achieve genuinely cross-functional working requires a fundamental shift in both attitudes and behaviors around ownership, hierarchy, and responsibility.
"A disjointed business is much less effective than a joined-up business. Swim lanes prevent knowledge share and shared learnings cascading through a business."
Put another way, marketing is no longer uniquely – or even primarily – responsible for creating a positive experience on the path to purchase. There are other equally or more impactful touchpoints and contributory factors that marketing doesn’t control but needs to partner with in order to have meaningful impact. Again, this requires a change in working culture.
Teams need to talk, to meet, to be properly structured cross-functionally. To institute a change program with impact, you’ll need an executive sponsor to fight your corner, a program manager to create change, and a storyteller to vocalize that the pain everyone has to endure will be worth it in the end. All partners – and particularly the storyteller – will need to talk from senior to junior levels, inside and outside the organization, with department heads and agency leads. At Ebiquity we have the experience and the temperament to help companies deliver just this sort of transformational change program, to use the power of the different departments to tear down walls between them.
As Isaac Jaffey, the lead character in the Aaron Sorkin TV series Sportsnight, said: “If you’re dumb, surround yourself with smart people; if you’re smart, surround yourself with smart people who disagree with you.” That’ll be your first experience of tearing down the barricades of silos. But quickly you’ll discover a new, cross-functional, integrated way of working that changes your business forever. Hold on tight. It’s going to be a bumpy ride.
Andrew is Chief Client Officer of Ebiquity. He joined the group in 2007 having previously held director level positions at Marks & Spencer, Verdict Research, and Ninah Consulting. With a pedigree encompassing both client-side and consultancy experience, and having spent many years advising clients on Marketing Effectiveness issues, Andrew brings a results-orientated and client-focused perspective to the challenge of helping businesses make better marketing decisions.
In conversation with...
Gerry D’Angelo of Mondelēz
Today’s media landscape offers marketers an unprecedented array of opportunities to connect and engage with people. With choice, however, comes complexity and the level of media expertise needed by advertisers has never been greater. Much of this is outsourced to media agencies, but marketers need to see this as a shared responsibility.
The 2016 media transparency initiative conducted by the U.S. Association of National Advertisers (ANA) emphasized the need for substantially increased accountability and more disciplined processes client-side. When Ebiquity and FirmDecisions published a set of recommendations for the ANA’s members, we recommended that advertisers should consider appointing a ‘Chief Media Officer’ or equivalent. This individual would serve as a centralized internal resource to oversee media strategy, partner with external providers, provide oversight of the data and technology resources needed, and manage all the contractual relationships necessary in the media ecosystem.
Some advertisers have operated in this way for some time, including Mondelēz. Nick Manning, Ebiquity’s Chief Strategy Officer, talked to Gerry D’Angelo, Director, Media MEU and Global Digital Media Partnerships for Mondelēz, about how the company manages its media affairs.
NM: How does Mondelēz think about media and its role in brand-building?
Gerry D’Angelo: Media is very important to our business and our brands. Traditionally, media was seen as a cost, with the resulting emphasis being on efficiency. But media is now increasingly seen as an investment to drive growth. Adopting a ‘Laws of Growth’ approach, inspired by Ehrenberg-Bass, helped us to adopt this new mindset, as well as embracing different routes to market such as branded content and media monetization.
NM: What are the main preoccupations for advertisers in today’s media environment?
GD’A: There are some troubling aspects of today’s media environment – in particular the level of complexity driven by ad tech and the straining of relationships between advertisers and media agencies; these are separate but interrelated issues.
Media agencies have become more commercially driven as their importance to the bottom line of holding companies has grown but, in fairness, advertisers also need to acknowledge that they have placed increasing demands on the media agencies. The only way to resolve this tension is by calling out the issues and both parties – advertisers and media agencies – working together to find a solution.
"In today’s media environment, the level of complexity driven by ad tech is straining relationships between advertisers and media agencies."
Gerry D’Angelo, Mondelēz
NM: How do you decide which external partners to work with given the choices now, for example, in ad tech?
GD’A: There is no perfect solution. Firstly, we must recognize that there are multiple routes to market, each with its own advantages and disadvantages. We have made a real effort to understand each route, and what the constituent parts are. Then we’ve done our best to make informed choices that lead to less complexity, lower costs, and increased accountability. With a clear approach to how we do marketing and – in turn – media, we are well set to evaluate each route based on a set of rigorous KPIs.
NM: How does Mondelēz view the media transparency debate?
GD’A: The best thing about the recent ANA initiative is that media transparency is now being discussed openly, and it’s a healthy debate. Mondelēz is in a good position to deal with this issue because we are a global company with an established playbook for addressing transparency issues. For companies with a narrower, more domestic footprint – companies that are less used to dealing with media transparency issues – it’s a new challenge.
NM: Do you believe that today’s generation of media managers can cope with the multiple demands they face?
GD’A: They have no choice but to cope. If they stand still and do not evolve, they will be overtaken by technology, consumer behavior, and industry disruption. Media is such a major investment for large advertisers that they need the right level of talent and resource to manage it: for example, a ‘Chief Media Officer’ or equivalent who is as dedicated, informed, and expert as, say, sales and retail specialists who are constantly looking at new ways to open up distribution channels.
Nick Manning is Ebiquity’s Chief Strategy Officer. Nick has spent 30 years in the media industry, principally having co-founded Manning Gottlieb Media (MGM) in 1990. MGM became one of the most highly respected and fastest-growing Media Specialist agencies before becoming part of Omnicom in 1997. His most recent position was CEO of OMD’s operations in the UK. Nick also co-founded OPera, the media negotiation arm for OMD and PHD, with billings of £1 billion. He joined Ebiquity in October 2007 as Chief Operating Officer, with special responsibility for the Analytics division, before becoming President, International, in overall charge of Ebiquity’s non-UK based operations. Nick is now Chief Strategy Officer, with responsibility for developing and implementing Ebiquity’s strategy across its three business segments.
Going for gold
Best-in-class marketing effectiveness from the Direct Line Group
Leading UK insurance brand Direct Line ended 2016 on a high after winning Gold at the Institute for Practitioners in Advertising (IPA) biennial marketing effectiveness awards. The award entry told how brand repositioning drove fundamental changes across the organization, from call centers to proposition research. The judges described it as “an extremely well-considered comeback that transformed the business from the inside out.” Ebiquity’s Nic Pietersma spoke to DLG’s Ann Constantine about this transformation and how the Group makes the most of marketing effectiveness.
NP: What role did the ROI measurement framework play in your recent award entry?
AC: It is a common misconception that the IPA Effectiveness Awards are based solely on ROI, at least in the narrow sense. Demonstrating ROI is an important part of the story, but it’s not the only factor the judges consider.
When we looked at previous winners, many report ROIs that would be unrealistic in our sector. So, we decided to adopt a broader approach. We wanted to put together a well-rounded argument that was evidence-based, demonstrated profitability, and told a compelling story about how the reboot transformed the business.
The Direct Line Fixer campaign ticked a lot of boxes. It improved brand measures like ‘Integrity,’ ‘Preference,’ and perceived ‘Quality.’ It was also successful in terms of the econometric ROI. And it was successful in terms of topline customer growth. It’s rare for campaigns that can demonstrate effectiveness across so many different types of metric.
"It’s rare for campaigns that can demonstrate effectiveness across so many different types of metric – brand measures, econometric ROI, topline customer growth."
NP: What do you think is particularly strong about your effectiveness program?
AC: The key thing is that we use a range of tools to measure our marketing effectiveness. Econometrics is central, but also not the be-all and end-all. If we relied on a single approach, we’d miss the bigger picture. In addition to econometrics, we’ve used geotesting to evaluate our campaigns over the last five years, initially to cut inefficient spend from our marketing budget, but more recently we’ve used the same approach to understand how novel media initiatives work across our company's portfolio of insurance brands.
Figure 1. Testing Cycle
When it comes to direct mail and paid social, we prefer to use a ‘matchback and hold-out’ approach wherever possible, because we believe that this is best practice. I know some companies use econometrics to measure direct mail but for us this would be missing a trick, as you’re not using the right tool for the job.
Figure 2. Matchback analysis
Call volume tracking – using tracked phone numbers – was state of the art in insurance marketing 10–20 years ago, but consumer behavior has changed and today we rely on this approach less.
"Digital investment needs to wash its face in terms of cost, reach and frequency, and viewability. Ideally, we also need to demonstrate effectiveness from a test and control perspective."
We use digital tracking to plan our day-to-day digital marketing but, even so, we don’t take tracked sales at face value. Digital investment needs to wash its face in terms of cost, reach and frequency, and viewability. Ideally, we also need to demonstrate effectiveness from a test and control perspective.
NP: Those approaches seem to cover the short-term media response from every possible angle. What about the brand?
AC: Ideally, marketing should impact both. The IPA paper – and the Winston Wolf, Fixer campaign – was successful partly because it showed that there were short-term benefits in terms of quotes and sales, as well as a meaningful, longer-term shift in brand metrics.
Figure 3. Direct Line – Brand Index Quality Score (Net), from YouGov
Ironically, some of the brand health changes happened very quickly. Our YouGov net quality score jumped up after the first month of the campaign.
We also saw a holistic improvement in the Direct Line brand tracking that would be easy to miss from a narrow ROI standpoint. Statements like ‘cares for customers,’ ‘resolves claims fairly,’ and ‘is easy to deal with’ all saw major improvements after the Fixer campaign launched.
Figure 4. Direct Line brand tracking statements, before and after launch of Fixer campaign
Those shifts laid the groundwork for long-term success. Interestingly, we reported a strong above break-even ROI, which benchmarked well for this sector, but since then our estimated ROI for Direct Line has improved further’.
Understanding how brand metrics fit together and work to drive quotes and sales in the long term is an ongoing area of work for us. One of the things that we’ve found is that certain elements of brand health tend to move together in the consumer’s mind and that these collectively drive sales in the longer term.
Figure 5. Clustering of brand metrics for the Direct Line brand
In a way, they form a family tree of positive brand attributes. For example, some recent work we did with our Churchill brand highlighted how ‘Britishness’ was linked to ‘Likability’ and also how notions like ‘Efficient / Dependable / Forward Looking / Straightforward’ are all linked in the consumer’s perception of the brand.
NP: What role does customer segmentation play in your strategy?
AC: We have a portfolio of brands and, while most use mass reach media lines (TV, PPC, etc.), the brands are nevertheless differentiated in terms of their core target audience. This plays a big role in shaping creative decisions across the portfolio.
We also use segmentation in our analytic approach. Our econometric models are segmented not only in terms of channel (e.g., phone versus web transactions), but also in terms of age and risk profile, which is important in the insurance sector. This gives us a clear and granular view of what kind of customers our media investments attract and the commercial impact of this.
"Segmentation gives us a clear and granular view of what kind of customers our media investments attract and the commercial impact of this."
NP: What is the role of an effectiveness professional in a modern marketing department?
AC: We strive to be seen as an internal agency that can give clear and concise opinions; we certainly don’t want to be seen as a blocker of exciting new initiatives. We work closely with marketing teams to understand the role that each media line is expected to play and which KPIs need to be tracked and understood. We have also spent the last 18 months bringing what were seen as three separate disciplines – brand research, market and competitor research, and marketing effectiveness – under one umbrella. This is unique and allows us to have a fully rounded view on performance.
Does your business integrate brand research, market and competitor research, and marketing effectiveness for a joined-up view of what works and what doesn’t in the marketing mix?
- We're working on it!
Nic is a Business Director at Ebiquity.
Before joining the group in 2008 he worked as an analyst at Mediacom, as an economics lecturer at the University of Cape Town and as a parliamentary researcher. Nic’s mission today is to make marketing analytics more commercial, more credible, and more useful.
Digital growing pains for online advertising
Reflecting on the digital hype of 2016.
Ebiquity’s Head of Communications Insight, Martin Broad, cuts through the hype about digital that assaulted marketers in 2016.
Over recent years, the marketing community has been subjected to a large number of sensationalist headlines which have eventually been revealed to be only partly true. “TV is Dead!” – TV isn’t dead: it’s changing; “Social Video is The Future!” – tell that to the likes of Vine; “YouTube Ads are 80% More Effective Than TV!” – effective in what way, and for who?
I say ‘eventually revealed’ because the nature of the advertising business often means that predictions and broad statements take time to prove, or disprove, with a tangible sense of uncertainty left hanging in-between. Nowhere is this uncertainty felt more than in online advertising – the mixture of an ever-evolving landscape, and predictions that are often as incorrect as they are correct, means that many tackle digital with trepidation rather than confidence.
Yet the juggernaut rolls on; the plaudits of online advertising are heralded more and more, and the promises they make grow ever larger. The questions are, with still so much confusion about digital, where does the line lie between fact and fiction, and did digital overpromise in 2016?
"The entire programmatic universe – especially difficult topics like visibility, fee allocation, and bot fraud – must have clearer signposting for clients."
Transparency and problematic programmatic
Two worries of digital cited more than any other are transparency and quality, particularly with respect to programmatic buying. A survey by Strata in August last year found that just over 50 percent of respondents were concerned with the transparency of programmatic buys, with nearly 60 percent worried about the quality. The Internet Advertising Bureau even offers marketers a free Programmatic Fee Transparency Calculator – its very existence pointing to the sheer scale of the transparency problem.
The moment transparency is mentioned, an immediate undertone suggests that agencies are intentionally trying to ‘cheat’ clients – undoubtedly an unfair view. Through our Marketing Effectiveness practice, we have seen good examples of where digital can work well if done right.
Nonetheless, the entire programmatic universe – especially difficult topics like visibility, fee allocation, and bot fraud – must have clearer signposting for clients. In March 2016, a report by Forrester revealed that 31 percent of companies have expanded to handle more programmatic needs in-house – a trend sure to continue unless confusions around programmatic are cleared up.
One of the most vocal critics of digital is Mark Ritson, Adjunct Professor at Melbourne Business School and prolific Marketing Week columnist. Whether claiming that “Facebook should hang its head in shame for measurement errors” or highlighting the little-publicized diagnostic discrepancies between digital and traditional TV views, Ritson’s message is clear: digital measurements demand closer scrutiny.
Poke’s Head of Strategy, Bogdana Butnar, echoes the view that analytics need to be improved, although she highlights that current analytics are outdated, rather than outright dishonest. At last September’s APG event Noisy Thinking, she commented: “The problem that we have is that the metrics we use [like impressions, views, and clicks] aren’t bad – they’re supposed to measure something else. They’re supposed to measure transactions, which is different from what we’re trying to measure, which is building brands and share.”
Whether metrics are clumsily deceitful or simply need updating, the incongruity between the promises they make and real-world results is harming the digital industry.
Micro-targeting: missing the target altogether?
Next comes the question about the necessity – if not the application – of micro-targeting. One of the frequently hailed accolades of digital in recent years has been the ability to drill down through reams of consumer data to a highly targeted level, often able to reach individuals.
Unfortunately, micro-targeting had not-a-little wind taken out of its sails when P&G, the world’s biggest advertiser, pulled back on its amount of targeted Facebook ads in August 2016. Global marketing officer Marc Pritchard stated that “we targeted too much and went too narrow.”
Let’s be clear; ‘pulling back’ is not the same as ‘pulling out.’ P&G will continue to invest heavily in Facebook advertising, as it should. But the decision does suggest that full-scale micro-targeting may not be entirely necessary, and with Mars and Unilever following suit into what’s been dubbed ‘sophisticated mass marketing,’ marketers are looking at micro-targeting with a more critical eye.
Ad blocking … Ad unblocking … Ad nauseam …
2016 also raised the seemingly intractable issue of ad blocking. Whether you see ad blocking as illegal ‘vandalism’ of a publisher’s digital property, or a necessary roadblock that makes advertisers work harder to create better ads, ad blockers are understandably vilified by the big digital players.
Facebook took measures into its own hands last August, announcing that “[we’ll] begin showing ads on Facebook desktop for people who currently use ad blocking software” in a move to outmaneuver ad blocking.
In response, Adblock Plus launched a new filter to bypass the technology … with Facebook introducing new code to beat the filter … only for Adblock Plus to roll out ANOTHER update … followed by a reply by Facebook. This cat-and-mouse game shows no sign of slowing down.
"The days of online advertising being prescribed as a marketing panacea have come to an end."
The notion of overpromise applies when you consider the extent to which Facebook knows it may be impossible to block ad blockers.
Whether down to browsers’ capabilities for personalization, or the fact that any kind of clouded approach to ad labeling won’t be allowed by the U.S. Federal Trade Commission, it could be said that ad blockers are here to stay. Indeed, as Princeton Assistant Professor Arvind Narayanan has said: “All of this must be utterly obvious to the smart engineers at Facebook, so the whole ‘unblockable ads’ PR push seems likely to be a big bluff.” This is just one more overpromise that Facebook knows it can’t commit to in the long term.
Significant and market-impacting challenges – challenges that have continued to grow in 2016 – can be summed up in three words: lack of clarity. Whether it’s clarity of how ads are bought and sold, how the metrics are working, what they are measuring, or who will see ads, the failure of the industry to have a bipartisan discussion of digital’s weaknesses as well as its strengths has led to a sense of distrust.
The days of online advertising being prescribed as a marketing panacea have come to an end. In 2017, adland needs to be honest, upfront, and clear about the strengths and the limitations of digital in equal measure. It is only in this way that the promises digital makes can, at last, be kept.
What are your plans for marketing investment in 2017 compared with 2016?
- Increase spend
- Keep spend the same
- Decrease spend
Martin Broad is Head of Communications Insight at Ebiquity. His team provides strategic insight into the Paid, Owned, and Earned comms of leading brands around the world, working regularly across sectors such as technology, alcohol, finance, mobile, and skincare and cosmetics.
The rise and rise of fake news
The impact and implications of the fake news phenomenon.
Sarah Wingrove, Client Services Manager at Ebiquity Australia, considers the rise, impact, and implications of the fake news phenomenon.
More and more people are turning to the internet as their primary source of news. The web is replacing TV, press, or radio. This is particularly true among younger users. However, the validity and veracity of online news content is now a concern, thanks to the growth in fake news content and sites. The legitimacy of news is compromised further by social media platforms, where real news and fake stories live side by side, making it hard to tell them apart. What’s more, channels such as Facebook and Twitter amplify the reach of fake news.
Fictitious information is nothing new online, but fake news is now being deliberately created to circulate inaccurate information about current events. The commotion surrounding the role of fake news in the recent US presidential election was best (or perhaps worst) characterized by the so-called pizzagate conspiracy theory. This even led to a member of the public using a firearm in a restaurant when trying to investigate the claims for themselves. And following the US election and based on a federal intelligence investigation, the outgoing administration expelled 35 Russian diplomats said to be involved in fake election news.
"The phenomenon is also starting to have commercial impact."
The phenomenon is also starting to have commercial impact. Kellogg’s recently pulled its ads from the right-wing news site Breitbart in the US, and this action has encouraged other brands to question whether they want to be associated with controversial, often fictitious content. More and more advertisers are now exposed to fake news sites as brands hand over control to trading platforms, for programmatic trading algorithms search for the cheapest advertising available.
The twin forces of fake news and programmatic trading mean that brands should monitor the quality of environments selected to carry their messages. Relying on a programmatic strategy that goes unchecked can place branded content in environments which are not aligned with corporate values. Brands need to be aware of the parameters put in place through trading desks to ensure their ads are served through publishers that offer quality and credibility.
As a result, the leaders of the dominant platforms – with Facebook and Google now accounting for more than 80 percent of both traffic and revenue – are already under increased pressure to use their power to act against fake news. Policies are already being implemented to cut off advertising revenue for websites and users posting fictional information.
"The twin forces of fake news and programmatic trading mean that brands should monitor the quality of environments selected to carry their messages."
But should it be these companies’ responsibility to act as the adult in this situation? Fake news stories thrive on Facebook because the newsfeed algorithm is set up to prioritize ‘engagement,’ based on the number of people reading, sharing, and responding to content. One suggested option is for Facebook to give legitimate, high-quality news sources an advantage in its newsfeed algorithm. But, again, should we leave it up to an automated program to make these decisions or should people be hired to verify news stories which appear on the Facebook newsfeed?
In Germany, by contrast, the government is planning to take a further step to keep these businesses accountable. It is considering legislation to penalize social media platforms that allow fake news to appear on their sites.
This issue will grow over time, and keen scrutiny is needed for the dominant social media platforms who will be increasingly required to put processes in place to limit the volume of fake news published. However, it is also up to brands to determine whether they are happy to be associated with false content. If the stories are creating engagement for advertisers, they may decide that fake news is a better option than fake eyeballs.
Sarah joined Ebiquity in May 2015 as Client Services Manager, with four years’ experience previously working for Ebiquity UK and agency side. She gained global media experience through project managing the English Premier League audience report and as part of the Trading & Investment team at Dentsu Aegis Network. At Ebiquity, Sarah works with clients across most areas of Ebiquity’s consulting services, including benchmarking, brief and strategy reviews, media process reviews, agency reviews, and developing KPIs.
Getting the best from Out of Home advertising
A quiet revolution has been underway for some time in out of home (OOH) media. Digital sites are now commonplace – a third of sites in the UK market are now digitized, and the pace of transformation is accelerating.
Digital OOH offers advertisers innovative opportunities for arresting creative. The medium also allows advertisers to reach ever more targeted audiences, by location or time of day, with messages appropriate to both.
But with these new possibilities come challenges. Media owners are investing in this lucrative side of their business and are understandably keen for digital sites to feature prominently on our streets and media schedules. There’s an obvious temptation for advertisers to get carried away by this innovation, and this should be balanced with common sense regarding campaign objectives, fundamental cost-efficiencies, and campaign reach.
And it’s not only in media planning where advertisers need to be more demanding of their trusted OOH partners – in this medium comprising media agencies, outdoor specialists, creative agencies, and media owners. Digital OOH raises challenges for creative, trading, and transparency and, for advertisers to get the most from these opportunities that digital offers, they should ask the following questions when considering OOH plans as a matter of routine.
Targeting: Who am I targeting? When and where should they receive the message?
- Environment, time of day, day of week, location
Formats: How do the proposed formats contribute to my strategy?
- Are they all efficient, effective, and necessary? Are there better options?
Campaign weight: Does my budget reach sufficient people for long enough?
- By format, environment, and overall?
Cost-efficiency: What is the point of free ‘value’ activity?
- Does it contribute to audience delivery and campaign objectives, or just exit costs?
Transparency and validation: How will I know my digital ads appeared?
- How will the campaign activity be verified?
Impact: Will the creative solution achieve standout and recall?
- Digital sites deliver much reduced screen time for advertisers
Success: How will I know my campaign worked?
- Are expectations clear and are metrics in place to verify them?
A viewpoint paper on DOOH will be available in Spring.
Judith Warn-Ford is Head of UK Media, having started her media career at Dorland Advertising as a Planner/Buyer in the early 1980s. When the media world decided to split the planning and buying function, she chose to align herself to the discipline of strategic media planning. Judith left Dorland to join Yershon Media (an Aegis company) as their lead Strategic Media Planner and consultant responsible for many clients, including Birds Eye Wall’s, Unilever, TSB, and ICI. She left Yershon to join Fairbrother Lenz Media (FLE) and set up the non-TV auditing department and later the online auditing department. FLE became part of Ebiquity 2013.