The Current State of Advertising Effectiveness
As a creative pre-testing firm, we closely track trends in advertising effectiveness. One important theme is covered extensively in the data-driven work of Peter Field - effectiveness is declining across the board. The culprit? Short-termism.
Field's meticulous analysis clearly shows that short-termism has reduced effectiveness and creativity in advertising over the past decade. As a creative testing firm, we need to understand and respond to these findings.
What is Short-Termism and Why is it Rising?
The Definition and Causes of Short-Termism
Short-termism refers to the excessive focus in marketing on driving immediate sales results, often at the expense of long-term brand building (Field, 2018). It is fueled by the desire for quick returns and the short tenures of CMOs, now averaging just 4 years (Gmoser, 2014).
Digital Media and marketing's Short Attention Span
Digital media has accelerated short-termism. Channels like search and social media enable marketers to continuously test and optimize advertising for short-term direct response. But this optimization culture doesn't build brands or drive sustainable growth (Field, 2018).
The Neglect of Brand Building is a real issue
Distinctiveness and brand salience are being crowded out by obsessive optimization for the short-term. Brand-building budgets have stagnated as short-term sales activation budgets balloon (Field, 2018). Long-term brand building, a proven driver of effectiveness, is being neglected.
The High Costs of Short-Termism
Impact on Creativity and Relevance
Field is clear: Short-termism has reduced the distinctiveness, relevance and creativity of advertising for consumers. Campaigns are less innovative, distinctive and engaging. They blend into the background of wallpaper advertising.
Erosion of Advertising Effectiveness
This creeping rise in short-termism over the past decade has steadily eroded advertising effectiveness. On average, Field notes, short-term optimization now fails to deliver sales growth, despite stealing budget from brand building.
The Need for Long-Term Brand Building
Long-term brand building is the engine of business growth. When brands neglect brand building in favor of short-term optimization, effectiveness declines, market share drops, and growth stalls.
Thinking Long or, at least, Restoring the Balance
Strategies for Rebalancing
We must change the structural bias towards short-term optimization and sales activation. More investment is urgently needed in long-term brand building to drive growth and restore effectiveness (Field, 2018).
Some suggestions from Field
- Adopt a "60/40" rule – 60% of budget on long-term brand building, 40% on short-term sales activation.
- Extend planning horizons beyond the quarterly cycle to allow brand building time to take effect.
- Incentivize marketers to focus on long-term brand health metrics beyond immediate sales bumps.
- Make brand building the priority, not an afterthought. Set objectives around brand distinctiveness, i.e. the unique cues that ensure you get credit for the brand ad investment.
- Appoint a 'Chief Growth Officer' to advocate for long-term growth beyond quarterly results.
Creative Testing Firms Must Upgrade Their Toolkits
Our testing approaches look at short + long term metrics correlated with ad sucess and brand growth
As a creative testing firm, we too must adapt to counter short-termism. Short-term pre-testing metrics like recall and persuasion have limits. That why our survey toolkits also measure brand-building dimensions correlated with long term effectiveness like distinctiveness, imagery, fame and emotional resonance.
The Bottom Line
Short-termism is killing creativity, distinctiveness and brand growth. But by refocusing on brand building and extending planning horizons, we can reverse the tide. It will require commitment, patience and bravery from all of us. But the payoff will be stronger brands that resonate creatively while driving effectiveness over the long-term. From small acorns, one day, tall trees.
