Brands are waking up to the benefits of ‘strong effectiveness culture’, IPA finds

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Brands are improving their commitment to a culture of effectiveness, but there is still work to be done, according to the IPA’s Effectiveness Roadmap.

Now in its second year, the roadmap reveals having a dedicated approach to marketing effectiveness is crucial for brands and agencies, with report author Nick Milne suggesting the results indicate “proof” an effectiveness strategy works.

The IPA, supported by ISBA, analyzed the performance of 36% of the returning brands and agencies. The research found the effectiveness culture within brands has improved by 10%, scoring 7.2 versus 6.6 in 2021.

Within agencies, the effectiveness culture “maintained equilibrium” compared to last year, scoring a higher level of 7.6.

The biggest single increase in marketing effectiveness culture is when the effectiveness journey starts, increasing 88% for brands and a “more moderate” 33% for agencies.

Meanwhile, the IPA found that focusing on marketing effectiveness has helped brands create “consistency” in how performance is viewed.

Organizations were asked to rate their performance against the IPA’s definition of marketing effectiveness – the process of improving business performance from marketing activities, made easier and more impactful by people, technology and a strong and clear focus – as well as against four quadrants: focus, process, people and data.

It’s almost like the marketing of marketing effectiveness is a concern.

Nick Milne, IPA

“In isolation, brands and agencies are now getting the effectiveness approach and they’re understanding that they need to have this roadmap,” says Milne, who sees a clear need for a joined up approach.

“Between brands and agencies it shouldn’t be seen as separate effectiveness agendas,” Milne adds, suggesting the strategy needs to “come together”.

The IPA finds that when an effectiveness roadmap is present, brands are 41% more likely to believe their organization balances the long and short term, and 71% more likely to believe long-term brand effects are “crucial”.

Furthermore, 86% of brands are more likely to disagree that their organization focuses solely on the short-term to create value when the roadmap is present. At the same time, agencies are 14% more likely to believe in balancing the long and short term when an effectiveness roadmap is in place.

Senior buy-in vital to accelerate the culture of marketing effectiveness, IPA finds

For brands adopting a “more clearly defined planning process”, there is a positive impact. Such an approach increases their own effectiveness culture (43%), improves their agency’s effectiveness culture (31%) and increases the chances of both their own, and their agency’s, effectiveness recommendations being activated.

“It helps people understand that there’s not just a short-term view for measuring campaign performance,” adds Milne, noting the “longer-term value” roadmaps are creating.

Long-term commitment is vital to a successful effectiveness agenda, he suggests, arguing “effectiveness isn’t something you can just hop on and off of”. There are multiple factors at play.

“Look at the average tenure of a CMO,” says Milne. “If you’re an agency working with more junior marketers, then it’s going to be more delivery-focused and you’re not going to have the opportunity to be a bit more strategic.”

The agency vs brand problem

Both brands and agencies could be doing themselves a disservice in their approach to the work if effectiveness measurement is missing, the IPA Effectiveness Roadmap suggests.

Problems can be down to “commercial agreements between brands and agencies,” says Milne, which may “limit” the opportunity for effectiveness conversations.

Within the effectiveness agenda he recognizes “two sides”. There is the perception from the brand side “agencies shouldn’t be marking their own homework”, coupled with the issue of effectiveness measurement capabilities being “add-ons to the core service they provide”.

For agencies looking to bolster their clients’ effectiveness agenda, the IPA found an opportunity to create roadmaps with “key clients” to push an effectiveness partnership. The research found only 20% of agency respondents claim their business has an effectiveness roadmap for their key clients.

One particularly revealing insight into the opposition between brands and agencies is that 37% of agency respondents claim their brand or agency does not have an effectiveness roadmap. That’s compared to 26% of brand respondents who said the same.

“It’s a massive opportunity for agencies,” says Milne, who notes that within the data there were more agencies towards the beginning of their effectiveness journey.

Indeed, making an effort to help the whole organization better understand the agency’s effectiveness approach increases effectiveness culture by 63%, from 5.4 to 8.8 in 2022. Furthermore, helping brands see the agency as the “creator of value”, rather than a cost, marks a 50% improvement in effectiveness culture from 4.8 to 7.2.

It is crucial not to take a siloed approach. The roadmap suggests an improvement of 43% can be driven by not allowing effectiveness to be siloed within planning, analytics or other departments.

Creating an effectiveness culture

What does a strong effectiveness culture actually look like? Milne recalls an organization he worked in himself that set a “clear definition” of what effectiveness was.

“We had an unspoken success measure about our approach,” he says. “We set up a dedicated effectiveness goal and we knew that success would be that in three years’ time we shouldn’t exist.”

Milne says a “strong effectiveness culture” is where colleagues have access to the right tools, data, insight, processes and understanding of what is being delivered, both in the current year and in three years’ time. That is not just an understanding across marketing, but also finance and operations.

A question he says marketers should ask themselves is: “Have you got the right building blocks in your culture for it to be a success?”

Access to data is a “really big” issue he adds: “What we’ve seen both years from the results of the roadmap is that agencies are not having the right access to the right data, or not sharing the data.”

He says it’s the “biggest enabler” of how effective agencies can be in improving the culture.

On the flip side, the roadmap finds brands don’t necessarily feel they have the right data to measure the right metrics either.

Recently, Marketing Week’s own effectiveness research found a similar sentiment across marketers, with 24% saying they felt their organizations lacked the data capability for measuring effectiveness.

Marketers lament lack of data capability in measuring effectiveness “It is not necessarily the data sharing that is the problem, but it’s the insight we create with that data, which can be very powerfully disruptive if you’re creating different stories with that data,” says Milne.

From a marketing perspective he sees a “gap” between how brand-side marketers are using the data that sits more broadly across the organization, such as retail, operations or distribution data.

Ultimately, Milne believes the roadmap data suggests there isn’t a clear “understanding and awareness” of what the effectiveness approach is for agencies or brands, and what steps they are evaluating.

“It’s almost like the marketing of marketing effectiveness is a concern,” he adds. “I can look at the individual responses of people within the same organization and they’ll have a very different view. There needs to be a better marketing of marketing effectiveness.”

Commenting on the findings, IPA director of marketing strategy Janet Hull says while this year’s roadmap “could have been the difficult second album”, she sees a strong new message that a dedicated approach to marketing effectiveness works.

“Specifically it helps create a stronger effectiveness culture and a more consistent view of how marketing effectiveness is performing across the four quadrants,” she adds.

“This will lead to increased business value coming from marketing effectiveness. This is exactly why the IPA is keen to encourage brands and agencies to take marketing effectiveness more seriously and to make it part of the boardroom agenda.”

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