One of the most eagerly anticipated dates on the marketing calendar, the IPA Effectiveness Conference, returned last month, with no shortage of attention-grabbing headlines. The chief among them saw effectiveness stalwart, Les Binet, and Will Davis schooling the industry for what they saw as too much focus on short-term thinking.
Advertisers should ‘focus less on efficiency, more on effectiveness’, argued Binet, noting that media ROI has increased post-pandemic while incremental profit has fallen. This comes as the proportion of brand revenue allocated to marketing spend fell to 7.7% in 2024, a decline from 11% in 2019.
While much of the focus in recent years has been on ‘doing more with less’, the duo argued that such short-termism inevitably leads to profit erosion and adds incremental strain to each successive year’s marketing budget. Rather, they suggested, brands should think big – maximising reach and putting significant investment behind creative before retiring it.
The long and the short of budget
Armed with survey data showing that CMOs typically place greater emphasis on ROI than on budget-setting, Binet argued this was symptomatic of the industry’s fixation with driving short-term efficiencies. But as rising production costs demand yet higher efficiency for campaigns simply to break even, budget is now ‘eight times more important than ROI’. This does not mean intermediate metrics like ROI are meaningless. Rather, marketers should develop a framework to understand how these efficiency metrics interact with scale. This will help brands to foster a culture of effectiveness.
Experiment to be effective
In his presentation, Davis cited Laithwaites’ award-winning campaign as an example of a brand ‘going big’ in action. Crucial to its success was the use of controlled regional experiments.
Too often, brands can become trapped inside ‘local optimisation exercises’ moving around a short-term equilibrium, typically modelled on backwards-looking data and short-term effects. The antidote is national-scale experimentation. Through forecasting tools like Investment Planning, brands can shift out of this short-term bubble and move to bigger, newer equilibrium scales.
Brands including Gousto have used experiments to their advantage. In a learning agenda, Gousto mapped out their opportunities into a prioritisation matrix based on the size of the effectiveness opportunity and the certainty of success. As a result, Gousto increased the volume of experiments from 4 to 12. This ultimately de-risked a shift of investment towards mid-funnel and a broader AV mix – successfully maintaining Gousto’s growth trajectory across brand and commercial metrics.
Defeat the bad and the boring
As marketing gurus like Rory Sutherland have often argued, the enemy of brands is sameness. Constantly tinkering with small optimisations may drive moderate impacts in the short-term, but long-term effectiveness requires bold new thinking. That’s why at the7stars we created our Power of Independent Thought framework. By breaking free from category norms and archetypes, brands can inspire exceptional creative thinking – and defeat the bad and the boring.
