Digital has failed to solve adland’s problem with measurement

This article was originally published in The Guardian on August 17th, 2015

“Let’s prove to the world,” said DDB’s William Bernbach, “that good taste, good art, good writing … can be good selling.”

The mechanism of attributing customer’s purchase to a creative idea is, at best, different each time. At worst, it’s unknown. The ad industry has struggled with the idea since its inception and the advent of digital, despite its many promises, has done little to solve the problem. Marketers are now more mystified than ever about whether their marketing works.

Forrester Research claims that 43% of marketers still don’t know what works.Millard Brown Digital found that 70% of marketing executives would be more willing to increase their spending on mobile, digital and social platforms if there were better ways to measure return on investment. Determining content marketing effectiveness is still a challenge and native campaigns do not yet havethe universally agreed-upon success metrics.

In order to figure out the way forward, marketers need to dispense with the old measurement models and instead look at how today’s fastest growing companies measure value creation.

Alan Tisch, co-founder of Spring, the app which recently secured $25m in funding, said at the Northside Festival in New York that he and his team know exactly the net promoter score of each of their customers. The net promoter score is a metric that measures the likelihood of a customer to recommend a brand, product or service to their friends.

Tisch’s team believe each piece of data can be “used to the customer’s benefit, but only for targeting when it’s relevant.” Relevance is Spring’s mantra. The company’s email marketing programme, for example, relies on the tracking of when and how often subscribers open their emails, in order to avoid becoming spam. Their efforts clearly pay off: Spring’s repeat customer rate is about 2.5 times the typical rate for other e-commerce platforms.

Rent-the-Runway became a game-changer not because it brought collaborative consumption to luxury but because its software algorithms juggle the inventory of 65,000 dresses across its 5 million members. Netflix can not only recommend to you what to watch next but has created several Emmy-winning shows based on its viewership and content preferences data crunching.

Quantifying results in this way runs contrary to the romantic ideas about advertising creativity that are deeply embedded in the industry. “The ‘great idea’ in advertising is far more than the sum of the recognition scores, the ratings and all the other superficial indicators of its success,” said Leo Bogart, American sociologist and marketing expert. “It’s in the realm of myth, to which measurements cannot apply.”

There is a certain pride behind these words. Artistic savvy, inspiration and a heathy dose of mystery are intangibles to be celebrated. Bob Garfield claims that while the greatest ad campaigns of the century share some common features, above all “they are treasures. For one, they are important artefacts in our culture.”

Some of recent history’s most famous and beloved creative ideas have been business failures, and yet we still celebrate them as feats of creative innovation, perpetuating the notion that great ideas come from a strike of genius touched with a vision and a bit of luck.

There may indeed be truth to this, but these ideas about advertising creativity has also meant that that no one can tell which idea is going to become successful — until it does. When adland identifies examples of great creativity, it is always done in retrospect.

One would think that such circular reasoning would stop the industry from treating each success story as a sufficient explanation of its own success. No such luck.

The problem is that the next generation of consumers can’t be lured with Got Milk?, We Try Harder or even the more recent ones, such asLet’s Go Places.

The belief in the omnipotence of creativity and the resultant measurement inertia has become a liability. It puts advertisers at risk of losing relevance, both with audiences and with clients.

The advertising industry needs to redefine the measure of marketing value creation. The first step is to use data in smart ways — instead of simply measuring everything that can be measured — and demonstrate how ideas correspond to business results. The second step is setting clear business objectives. The third is monitoring performance as the idea unfolds and optimising its business impact in real time. Business performance is an indicator of consumer interest, cultural resonance and smart marketing.

There is room for creativity in this world of zero mystery. Offering outstanding service based on consumer behaviors sounds drab in comparison to old-school advertising standards — but in fact, coming up with ideas that solve consumer problems in a seamless, convenient and human way requires savvy and imagination yet unseen in the industry. There are many ways to tell a story and knowing exactly what works and what doesn’t can only improve it.

Strategy Executive. Author of “The Business of Aspiration.” Doctor of Sociology. Forbes’ one of The World’s Most Influential CMOs.

Strategy Executive. Author of “The Business of Aspiration.” Doctor of Sociology. Forbes’ one of The World’s Most Influential CMOs.