Following his appearance last week at Advertising Week APAC, Toby Harrison explains why marketing effectiveness has sunk to an all-time low and what it has to do with marshmallows.
We now know more about how marketing works than ever before, and we are armed with more data to prove the genuine effects of our efforts too.
So why is it that the effectiveness of what we do, has sunk to an all-time low?
The simple answer is because we have become so focused on short-term outcomes, that we neglect the long-term health of our brands.
What is scary is that our industry’s crisis would be perfectly acceptable if we were all pre-schoolers. But the sad truth is, we are adults, and we really should know better by now.
In the late 1960’s, Stanford professor Walter Mischel conducted a simple test with pre-schoolers. He gave them an easy choice; one marshmallow now, or two in 15 minutes time.
For most pre-schoolers, the urge of instant gratification was too much and they would instantly grab the single treat. But by the age of eight, most children have come to understand that a mere 15-minute wait, for a 200% increase in return, actually constitutes good value. Turning the conversation back on ourselves, it is rather unsettling that the majority of marketing is making a mistake that even an eight year old wouldn’t.
At its simplest, marketing works in two ways:
- builds a brand, or
- drives a sale.
The former takes a long time to achieve, but the effects are powerful, long-lasting and eventually do more to drive sales than any other activity. The latter can be achieved quickly, but the effects decay fast and often leave you in a worse position than you were when you began. It is true, short term activations have the power to drive sales. But those effects become less effective every time they are used, which means you will need to spend more and more money every time you activate to achieve the same result.
Just like the poor souls who sit on pokie machines chasing their losses, the little wins of short-term marketing are addictive enough to keep us playing and take our attention away from the losses we are accruing.
On the other hand, there is a large and credible body of evidence that indicates that long-term brand-building is the most effective strategy for sustainable growth. Regardless of the facts and the plight of the industry, collectively we still fail to acknowledge this truth. The obsession with short-term activation has taken our time, attention and investment away from the most critical component of the marketing mix: brand.
In a few short years, the rise of short-termism has fundamentally changed the type of work our industry creates. And the result is work that simply isn’t working as hard as it used to. Since 2012, the IPA has evidenced a consistent and considerable decline in overall effectiveness ofadvertising.
Like most things, the answer to this crisis isn’t black or white. It’s a simple shade of grey: a balanced combination of long-term and short-term activity working together at an optimised ratio will drive sustainable growth.
With that in mind, doesn’t two marshmallows sound better than one?
Original article written by Toby Harrison on Marketing Mag. Find the full article on Marketing Mag here.