While the effectiveness culture of UK brands and agencies is “encouraging”, there is still “significant” work to be done in marketing to boost business performance, according to the inaugural IPA Effectiveness Culture Monitor.
Published today (16 September), the study finds that securing buy-in from senior leaders for an effectiveness approach is a “key driver” of culture score improvement across brands.
Supported by ISBA, the trade body representing British advertisers, the annual Effectiveness Culture Monitor aims to provide an industry benchmark that will demonstrate how marketing effectiveness is evolving year after year. Culture is assessed on how well a marketing organisation delivers tangible improvements to business performance.
Brand effectiveness culture scores rose from 5.7 on average when there is no senior buy-in, to 7.4 when those values are shared by leadership, the monitor reveals.Airbnb shows faith in brand by boosting marketing investment
Yet, marketers have long struggled with their relationship to the CEO and CFO, particularly when it comes to justifying long-term brand building, which does not provide immediate return on investment.
Recent research by Forrester found that only 28% of B2C marketing decision-makers are confident they can accurately measure and attribute the incremental business value of their marketing efforts, as 71% say demonstrating the value of marketing to the CEO and CFO will be extremely challenging this year.
ISBA’s head of media effectiveness and performance, Clare O’Brien, tells Marketing Week the results of the monitor confirm the trade body’s “long-held view” that a fully functioning effectiveness culture within brand organisations has to be led by senior leaders.
“We backed the study to produce data that would improve internal conversations in order to get the backing of those senior leaders for improved business-wide effectiveness initiatives,” O’Brien explains.
“This monitor has now provided some key baseline benchmarks that can demonstrate the value of business-wide investment in establishing the culture.”
The industry’s culture is healthy overall
The study received some 178 responses from 91 different brands and agencies, including 37 brands across all major categories.
Asked to rate their own marketing effectiveness culture out of 10, brands on average achieved a “healthy” score of 6.9. Agencies ranked slightly higher at a score of 7.3, although the spectrum across each set of respondents ranges from two to 10.
With participants in the study self-selecting, the favourable skew towards marketing effectiveness is unsurprising. Interestingly, however, those organisations and agencies which claim to have an effectiveness ‘roadmap’ in place scored 26% higher (7.7) than those which did not (6.2).
In particular, implementing a roadmap provides a notable boost to an organisation’s ‘focus’ score – having a clear vision which understands the levers to impact and value – from 5.4 to 7.8.Just Eat drives UK growth after tripling marketing investment
The IPA defines an effectiveness roadmap as a “coherent strategy and plan for continual improvement to business value” across four key effectiveness pillars: people, process, focus and data, tools and measurement. The roadmap has to be understood by the organisation as a whole.
While nearly half (49%) of respondents state that their organisation has a marketing effectiveness roadmap, rising to 54% among brands alone, 22% do not and the rest are unsure.
“The benefit of a roadmap is that it provides an agreed framework and plan of action, which can be shared and communicated across the whole organisation and the ecosystem of agencies in support of it, giving focus and purpose to the programme and an internal benchmark to build from,” explains IPA director of marketing strategy and executive director of IPA Effworks, Janet Hull OBE.
The study finds that brands with an effectiveness roadmap are also more likely to balance long- and short-term value, and to consider long-term value crucial.
Past evidence, particularly from effectiveness experts Les Binet and Peter Field, has revealed that a balanced long-term and short-term approach to marketing leads to superior growth for brands. Implementing an effectiveness roadmap can help to deliver this approach, the IPA suggests.Diageo ups marketing spend as confidence in effectiveness soars
Respondents from brands with an effectiveness roadmap were more likely to agree (55%) that a balanced short- and long-term approach is best for value creation, and were also more likely to agree (38%) that long-term brand effects are considered crucial within the organisation.
Hull continues: “It is most encouraging to see that according to these agencies and brands, there are so many that are understanding and realising the impact that a focus in marketing effectiveness can bring.
“This is our benchmark year so we would like to be able to look back and report that more organisations have started their effectiveness journey and, hopefully, that there is better understanding across brands and agencies in what effectiveness means to them, and what the roadmap to increased value looks like.”
Asked for an example of a brand which has mastered effectiveness, Hull points to Diageo. Rising confidence in the effectiveness of its output, coupled with an improvement in the quality of its campaigns, encouraged Diageo to ramp up its marketing budget by 23% during the year to 30 June.
“Diageo is the company brand par excellence which has mastered marketing effectiveness,” Hull adds.