“We have arrived in an era where award-winning creativity typically brings little or no effective marketing advantage.”
– the stark revelation from the IPA’s new report The Crisis in Creative Effectiveness launched at Cannes Lions, 2019
The report, The Crisis in Creative Effectiveness, is a follow-up to the IPA’s 2016 publication, Selling Creativity Short, that warned of the dangers to creative effectiveness posed by short-termism in marketing, and covers hundreds of case studies that highlight a misunderstanding of how brands grow and prosper.
According to effectiveness expert and report author Peter Field, creatively awarded campaigns are less effective than they have been in their 24 years of analysis and are now no more effective than non-awarded campaigns, especially due to their short-term outlook.
The report reveals a continuing decline in the efficiency of creatively awarded campaigns. From 1996 to the 2008 financial meltdown and recession, creatively awarded campaigns were 12 times as efficient as non-awarded ones. But from 2008 to 2018, effectiveness fell to below four times. Today, advertising effectiveness continues to fall and creativity is almost certainly not delivering overall efficiency.
The report argues that this situation is entirely avoidable if one follows the lessons of best practices in creativity.
1) Short-termism drives collapsing creative effectiveness
- The collapse in effectiveness can be explained by a shift to short-term (lasting six months or less), activation-focused creativity, and related strategic and media trends.
- Creativity was once the most important driver of advertising effectiveness, with enormous multipliers for the most creative campaigns. However, creativity delivers little potential over short time frames, and yet the trend to short-term, disposable creativity is continuing to grow.
- The trend in marketing culture has been exacerbated by creative judges increasingly awarding campaigns that pursue short-term activation goals, which has encouraged a short-term mindset, even though such campaigns inevitably under-perform in the long term.
2) Lessons from creative best practice can reverse the damage
- Creative best practice is being overwhelmed by short-term practice, yet some campaigns still show how it should be done to deliver impressive effectiveness (i.e., Guinness, Snickers and John Lewis).
- There is a yawning gulf between creative best practice and poor practice. High-performing, creatively awarded campaigns are eight times more effective than low performing peers and almost 16 times more likely to bring major profitability growth.
- High performers defined:
- A balanced approach to short- and long-term objectives.
- The maintenance of a campaign in market long enough (typically six months) to embed behavioral change.
- Broader and earlier targeting rather than data-driven, real-time communications closely linked to purchase intent.
- Greater use of broad reach, brand-building media – especially TV, but also online video and out-of-home.
- A balanced allocation of media expenditures between brand-building and sales activation approaches.
3) The industry needs to change the way it identifies and rewards creativity
- The report argues that marketers who value creativity should stop encouraging the development of disposable creative ideas that squander creative firepower for tactical initiatives. Instead, creative briefs should stress the importance of how ideas will strengthen a brand in the long run.
- Creative shows have a role to play, too, and should separate classes of awards recommended for short- and long-term creativity.
Marketers with long-term goals are drawn to brand-building, which is the main driver of long-term growth and involves the creation of emotional memory structures that prime consumers to choose the brand, something creativity is very good at. These memory structures take time to create and reinforce. You cannot build a brand overnight, but they are durable and their effects actually build over time. The priming effect also improves pricing power and over time has a strong impact on profitability. Therefore, over longer timeframes, creativity brings more value to advertising.
Marketers with short-term goals are drawn to sales activation tactics, which involve behavioral prompts to nudge consumers to want to buy now: promotional messages, reminders, seasonal or occasion-related prompts and ‘reasons why’, often based on minor new product news. These prompts are focused on getting an immediate behavioral response, so the creation of memory structures is not necessary. They work with what the consumer already believes, rather than trying to change the way they see the brand. They have little effect on long-term growth and pricing, so their impact on profitability is modest, but they can produce powerful short-term sales spikes.
Creativity brings little value to short-term sales activation, so the trend to short-termism likely reduces its value. When used together, brand-building and activation work in synergy, each enhancing the other. Brand communications create enduring memory structures that increase the base level of demand for the brand and reduce price sensitivity. Sales activation triggers these memories and converts them efficiently into immediate sales. The net result of using both tactics is a sustainable revenue stream with higher margins.
But the two need to be carried out in balance and the data shows a clear optimum ratio where effectiveness is greatest; over the last 20 years, this moving ‘sweet spot’ has averaged at 62% budget allocation to brand-building, but has been steadily shifting in favor of brand-building throughout.
“Despite our warnings, the misuse of creativity has continued to grow and the effectiveness advantage has continued to decline…We cannot go on being complacent. Left unchecked, the catastrophic decline in creative effectiveness will ultimately weaken support for creativity among management. Money spent on creativity will become ‘non-working’ budget and will be cut.”
– Peter Field, renowned author, strategist and marketing consultant
Curious to read more? Download the full report here.
The Report, a follow-up to the IPA’s 2016 report Selling Creativity Short, was based on IPA and Gunn report data to 2014, and now includes two new waves of case study data from 2016 and 2018. This provides 24 years of data covering almost 600 case studies, 121 of which won creative awards worldwide at the 46 creative shows monitored by the Gunn Report (now part of WARC Rankings). Efficiency is measured as % points of market share gain p.a. for every 10 % points of ESOV invested in the campaign.
Image source: Clem Onojeghuo