CFOs have a way of cutting through nuance and asking the simplest question about advertising effectiveness: Did the campaign work? Marketing, on the other hand, has a tendency to answer the one-answer question with a hedge of two different explanations.
One report argues that the brand investment of the last two quarters is still compounding and its full impact won't be visible until Q4. Another credits last week's performance media with driving clicks and sales. Both may be technically defensible but neither helps the executive deciding next quarter's budget.
Faced with two respectable answers, the CFO more often defaults to the one that fits into Friday's report rather than the one that requires waiting until Q4. That marketing hedge revealing the continued misalignment on what makes advertising effective and, more importantly, the voluntary abdication of defining and decisioning responsibility to senior management.
According to a new World Federation of Advertisers and Ebiquity handbook built from 70+ senior marketing leaders across 10 industries only 15% (!) of them state that effectiveness data actually informs their budget choices. Yet, 80% of them are implementing media mix models and brand lift studies, representing the gold-plated sophisticated advertising measurement solution.
“The tools are there, the discipline is there, the coverage is there. Where marketers still struggle is to turn all those measurements into decisions that impact the business” one PepsiCo source told the report authors.
This problem extends beyond the usual data and dashboard addictions I’ve touched on elsewhere. Whether or not you think the current data and dashboard gorging is beneficial or not, the explosion of both is happening and very real. What’s a head scratcher is that the demand for both is happening but no one seems eager to use its output.
It’d be very tempting to cast blame on the CFO's impatience with MMMs and brand lift studies. It’s a time worn narrative to accuse Finance Departments of chasing only rapid performance outcomes, refusing to stay in a branding initiative long enough to see returns.
However, that’s not precisely what’s taking place with this new survey. What’s genuinely unraveled is the systemic incapacity of organizations to align their goals and their outcomes.
How do we recognize this? By observing that a mere 14% (!) of companies within the study report that finance and marketing had a consensus on the meaning of “effectiveness.”
Within the same organizations, two departments find themselves at cross-purposes while asking the same question but defining it differently. Additionally, only 4% of marketers feel confident enough to differentiate short-term sales lift from long-term brand impact. This means even within all that marketing data, nobody is completely certain which lever moved what. To paraphrase Bruce Springsteen, “51 Dashboards (and Nothin’ On).”
I’ve previously documented similar organizational failures across various departments. Global IT building for fairness instead of the hardest market, resulting in universal mediocre systems. CIOs refereeing turf wars instead of picking a translator's stance and holding it. Marketing’s doing the same thing here: refusing to argue in good faith and to align cross functionally on one North Star instead of splitting hairs between two different measurement methodologies and calling that hedge rigor.
Consider the financial implications of this divergence while everyone argues. Billions of dollars are flowing into retail media, influencers, AI-powered advertising, connected TV, etc. faster than ways to evaluate these mediums have been developed. Every quarter wasted on the “what works” debate delays the kill or scale framework which can’t function when a decision can’t be made. Investment continuing along without a definitive answer, as the decision on next steps is hindered by a lack of consensus.
As the handbook further highlights without much surprise, marketers are inclined to prioritize metrics that present marketing favorably over those that demonstrate true business impact. Laughingly, three-quarters of those surveyed anticipate that within three years, over half of their investment choices will be informed by data insights. For marketing, “in three years” is their mañana. An echo of vanity metrics but with an elongated runway to postpone accountability into the future when a new three year window will open again for a new measurement construct.
Simply purchasing more measurement tools won’t solve this issue since 80% surveyed already possess the necessary tools in-house. In fact, most marketing organizations would do well to look really hard (and maybe even put a moratorium on) additional measurement efforts until they can ascertain what any of the data actually signifies, what the success looks like, and if it the readouts will even be utilized.
What's absent is an organizational willingness to bring Finance and Marketing together before a campaign begins, not after it concludes, to define a single metric for effectiveness that will inform the decision. Put a real deadline on the kill decision too, so "we're still gathering data" stops being an acceptable answer at Q4 the way it was at Q1.
*** Views expressed on Push Pull Pivot are personal and shared in an individual capacity. They do not represent those of any current or former employer ***