Where’s John Wanamaker When We Need Him?
March 8, 2018 I A. Bruce Crawley
If John Wanamaker, the legendary, native-Philadelphia merchant and public figure, could somehow come back to his favorite city, in 2018, he would no doubt feel very much at home in today’s marketing communications/digital marketing/social media-driven ad biz.
Most remember Wanamaker, who passed away in the early 1920’s, for his enduring perspective on advertising effectiveness: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Sadly, it’s becoming increasingly clear that, despite the prestigious business schools today’s marketers attend, the number of digits they claim in their obscenely large global budgets, and the never-ending array of tech-related communications tools they have at their disposal, they continue to have difficulty understanding which parts of their budgets are being “wasted.” Ironically, this is in a business that has always prided itself, and convinced others, that its leading practitioners were outcomes-focused, dynamic, innovative and bottom-line oriented, marketing gurus.
It’s probably a very good thing that brand CEOs and the members of their boards have even less understanding, on average, about how their hard-earned audience acquisition dollars are being spent.
Am I being too harsh?
Consider this:In a very John Wanamaker-ish kind of way, Procter & Gamble, in an effort to determine which parts of its own ad budget were working for its brands, decided to cut $200M in digital spend from last year’s plan. What was the impact? Audience reach, P&G recently reported, actually increased by 10 percent, over the period.
On his “second time around,” with us, here, “old John” would also be shocked to learn that large corporate ad budgets are still being pretty much allocated, by long-standing, fanciful custom, in a range of 10-13 percent of total revenues. He’d also be disappointed, but not surprised to learn that a recent Hannapin Marketing survey disclosed that 90 percent of global marketers just don’t know how to determine return on investment for their marketing campaigns.
In a perfect world, such determinations would begin with having a clear set of strategically-based desired outcomes, metrics and timelines, for either traditional media or social media channels. Far too often, however, such calculations are never made and “the desired outcomes” are simply the ad creative development and the media buys, themselves.
Despite such informational and strategic shortcomings, a full 69 percent of social media ad buyers, in 2016, said that they planned to increase their Facebook spend in the coming year.
What makes that example all the more unsettling for those actually responsible for tracking the annual spend, is that in the 4th quarter of the 2017 budget year, time spent on Facebook by users, in the wake of constant coverage of Russian trolling and election manipulation on the platform, declined by 50 million hours. However, that didn’t seem to faze brand managers who, nevertheless, increased 2017 Facebook spend by 47 percent.
Can you spell “fundamental budgeting disconnect?”
Yes, it seems, that, even in this era of ad/tech, marketing disruption and global brand management, brands are still not quite sure which parts of their ad budgets are being “wasted.” The budget amounts just happen to be exponentially larger.
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A. Bruce Crawley is president, CEO and principal owner of Millennium 3 Management, Inc. (M3M). Read More...