The effectiveness of marketing communications is in sharp decline and it has been since 2012.
That is the conclusion from Media in Focus – the latest analysis of the IPA effectiveness awards databank by the ever-enlightening Les Binet and Peter Field.
I’d heartily recommend reading the full report, but here are some findings which struck me as significant:
- Getting the right balance between long-term initiatives (what the IPA call brand-building) and short-term (activation) is crucial to effectiveness
- The optimum balance remains around 60/40 in favour of long-term. This reinforces the conclusion of The Long and the Short of It (their previous highly influential paper)
- There is still a strong correlation between effectiveness and reach
- Since 2012, a growth in short-termism and over-emphasis on the importance of short-term measurements has coincided with a marked reduction in effectiveness
The report measures effectiveness in two ways: short-term activation effects (direct responses) and long-term business success factors like profit, sales, market share, penetration and price sensitivity.
It is the business outcomes that are in decline. The results that really count are suffering at the expense of those we are too busy counting.
The conclusions certainly resonate. They back up other similar data-driven studies (most notably Byron Sharp’s How Brands Grow). But the data is predominantly B2C… so what conclusions, if any, can we draw about B2B marketing?
Does B2B have the same short-term, long-term imbalance as B2C?
For me, it would be remiss to just pass over the findings as irrelevant to B2B. Binet and Field explain that the strongest long-term business effects rely on emotional messages because they are more effective at creating long-term mental structures (associations, beliefs, memories). The biggest long-term effects come from integrating this emotional priming with short-term activation activities.
It’s been well established that emotion plays a significant role in B2B buying decisions for some time. Anecdotally, most senior marketers I talk to recognise the need to balance pipeline today and creating an easier selling environment in the longer term. Navigating a course between these two poles – the prove-thy-worth hard numbers of pipeline and the less tangible art of influencing customer behaviour – is one of the secrets of great B2B marketing.
And there is one recent trend that I think suggests our difficult relationship with measurement and short-term tendencies are pushing us off course.
The MQL problem: the unintended consequence of short-term incentives
It seems every time we meet Sales and Marketing Directors recently they have this challenge: plenty of ‘MQLs’, not enough closed business.
In one case, the number of MQLs converting to the first stage of their sales process was short of half a percent. In another case, the CEO has banned altogether the term ‘MQL’ because it gives credence to what is not real.
As so often, the devilry lies in the incentives. Proper attribution ‘through the funnel’ can be very hard to achieve. Marketing’s influence becomes more difficult to pin down later in the sales cycle, so marketers focus on delivering MQLs as an outcome they are directly responsible for. Concentration goes on early stage leads with not enough due diligence on whether they are the right opportunities, or even real ‘leads’. Plans over-emphasise tactics that will drive reliable lead volume, like content syndication.
In our experience, the focus on MQLs can also mask some fundamental challenges. There might be no clear picture of the ideal customer, for example. Or a credibility gap that is stopping sales from winning in certain scenarios. Those insights, though crucial to long-term success, are hard to measure.
MQLs, SQLs, even pipeline, are short-termist incentives. They will encourage tactics which appear to be effective in the reporting cycle, at the expense of those which might play out over longer periods. Which means the issue is not limited to poor conversion to sales. Too much emphasis on short-term waterfall models could have a detrimental effect on commercial performance for years to come.
To avoid this scenario, we need a better-balanced take on measurement. I’m not advocating we ditch MQLs or waterfall models. But we need to be tenacious about measuring progress all the way through to close and, crucially, complement waterfalls with a counterpoint – measures that set out to incentivise the right behaviours to build long term value for the customer.
David van Schaick
CMO & CDO
6th February 2018