Let’s begin with a little story.
A couple of years ago I was at a conference where GE and their agency, BBDO, made a presentation of their new “Imagination” campaign. After showing some nice TV spots and explaining that they’d spent $300 million on media over the last year, they proudly declared that brand awareness had increased substantially. This generated polite applause.
Next up was the Marketing Director of blender manufacturer, Blendtec who proceeded to blend a brick, some ball bearings, an 8 ft garden rake and finally a Blackberry donated by a member of the audience (which had to be a plant, right?)
He then put up a single slide showing that every time they posted a self-produced, 10 dollar video on YouTube in their long-running “Will It Blend” campaign (which to-date has had more than 220 million views,) sales went up by an accurately measurable percentage. Understandably, the crowd went nuts.
The point being, GE spent hundreds of millions and couldn’t quantify with any certainty what they had achieved for all that money. Blendtec spent pennies and achieved consistently significant and measurable results.
In two weeks many companies will be paying close to $4 million a pop for 30 seconds of air time on the Super Bowl. They and their ad agencies will pronounce that this is money well spent, but there will be little data to substantiate this. A recent study of CMO’s demonstrates that the majority don’t establish their budgets according to ROI targets.
It also showed that the four major “brand valuation” companies put GE’s brand value in a wildly variable range, with two having it rising, and two having it falling in exactly the same period. And these are the experts. As one of the authors of the study put it… “That more than a fifth of marketers use brand awareness as their primary metric is disturbing, since it could be good or bad. After all, TWA had terrifically good brand awareness just before they went out of business.”
And the current obsession with social media hasn’t helped the situation, in fact in some ways, it has exacerbated it. There’s lots of talk about engagement metrics, re-tweets on Twitter, Likes on Facebook and clicks on everything else, but this is rarely correlated to sales. For while the audience for digital is easier to measure because there’s a ton of data attached to it, the question rarely asked is, what is it that’s being measured? It certainly isn’t the ROI. As I mentioned earlier, this is primarily the fault of the CMO who is using the wrong components to build his/her marketing plans, but it’s also the fault of their agency, which is merrily going along with the latest flavour du jour the client may have read about in the Harvard Business Review, or Wired, or heard about on the golf course. The agency goes along with it to show they are up to speed with the latest and greatest, but also because it will provide them with a bit more sustenance from the increasingly shrinking fees clients are paying their agencies these days.
And there, we have the suppurating nub of the problem.
Clients now see their advertising agencies in the same light as vendors who supply janitorial supplies or delivery services. They have become purveyors of a commodity product, and they have helped dig this hole for themselves. Over the years, I have seen many arguments expounding on how advertising agencies should be fairly compensated for their services. Most were written by ad agencies, so, per force, smacked of the expected smoke and mirrors, brand building rubbish I talked about at the beginning of this rant. But then recently, I came across a white paper from the Blamer Partnership, a consultancy dealing with client/agency relationships, with particular emphasis on compensation issues, which spells out a kind of AAAA (not AA) seven step approach to how clients may get a better ROI from their agencies, whilst their agencies may be fairly recompensed for their efforts. This is a long overdue, urgent discussion that with the increasingly frenetic obsession with new media, social networking and big data, needs to be addressed in order to achieve, as the Blamer Partnership describes it, a purposeful relationship between clients and their agencies that is accountable, measurable and honest. Good luck with that. We’ve certainly been waiting long enough.
George Parker has spent 40 years on Madison Avenue. He’s won Lions, CLIOs, EFFIES, and the David Ogilvy Award. His blog is adscam.typepad.com, which is required reading for those looking for a gnarly view of the world’s second oldest profession.” His latest book, “Confessions of a Mad Man,” makes the TV show “Mad Men” look like “Sesame Street.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.