Following on from Thomas Wagner’s piece on the race to efficiently average 15 seconds ads, it seems marketing as a whole is in an efficiency bubble, writes Will Lion, BBH London’s Head of Strategy 2015-2018 and now Head of New Products.

Be careful in the funnel where you focus

Modern marketing is defined by perfection of means and confusion of ends.

We are getting more efficient at delivering average.

Efficiency is relatively easy.

It’s cuts, it’s short-term, it’s rational, it’s targeting, it’s late funnel, it’s low risk. It’s 0 to 0.1. It smells like fresh laundry.

Effectiveness is relatively harder.

It’s investment, it’s focus, it’s long-term, it’s emotional, it’s fame, it’s ideas, it’s top of funnel, it’s bets, guts and risk. It’s 0 to 1. It has freakish breath.

An extreme question we might be asking ourselves is: would we rather be wasteful and effective or efficient and impotent?

Many of you will wriggle off one of those horns with, ‘I’d like efficient and effective please’.

Of course. And if you’re nailing that we salute you. But, real talk, is that really what’s happening in a lot of client organisations? Is it busyness or business that’s winning?

BBH Labs is here to poke the internet in the ribs, so here’s my provocation: we’re in an efficiency bubble.

What is that? It’s when your quest for efficiency distracts you from effectiveness.

It’s when 0 to 0.1 becomes more the organisation’s focus than 0 to 1.

The tell is whether, in your desire to be efficient, you have suffered an opportunity cost.

Did funds to seduce new buyers get slashed to fund tactical conversion?

Did a bold new concept for your website take time to get through procurement, missing out on many, many more sales?

In changing agencies did you get a haircut on price but remain flat on profit?

We feel this in our guts. And Binet and Field have already provided much of the evidence for all this happening: creativity has halved in power in recent years due to these forces.

Rory Sutherland just called it out on the BBC’s The Bottom Line, saying “The greater part of value is created by creative ideas….People are incrementalising themselves into obscurity”

We fall short of best advice if we do not warn against this. We want to avoid a situation where CMOs are outmanoeuvred by brands that have created fearsome new engines while they we’re oiling cogs in old ones.

So, what can we do about it?

The bubble bursts when someone sitting above procurement and marketing says: making the money beats saving the money.

The procurement voice is strong. And so it should be. Its saves businesses millions. But the voice of value creation, marketing’s drier name, should be stronger. It creates billions.

The thing is efficiency looks like effectiveness if your eyes are pressed up against it. Step back and let time play out, however, and it’s limited. It’s a pervasive corporate illusion.

Here are some potential ways out:

  • At its simplest, are you behind competitors on share, volume, value, profit? That’s a sign to give effectiveness 80% of your time and efficiencies 20%. You should only be working on the marginal gains if you’re performing highly already.
  • Get econometrics or increase its scope massively. If you cannot measure horsepower you will distract yourself with cogs.
  • A new metric for the board: ‘Efficient Effectiveness’. What can be measured, can be managed, so let’s put efficiencies in context of growth and always show them together. £10m saved: £100m created, great. £10m saved, £20m created, hmm. Conversion up 3.7%, profits up 5%, awesome. Conversion up 3.7%, profits up 0.1%, yeah, something’s off.
  • Another new metric for the board: ‘Long Effectiveness Potential’ – this is the ratio of marketing budgets pointed at long-term growth versus short-term stimulation and optimisation. It’s a proxy for how much you are geared to return to future shareholders generously, not just satisfy open mouths immediately. Alarm bells should go off when this ratio falls below market share maintenance levels.

There will no doubt be more ways out. Hit us up…

We will perhaps look back at this period and feel a little silly. Why were we so distracted? Or maybe we’ll be proud that we nailed the efficiency bit but treated it as the platform to build the real difference on top of. The choice is ours.

To be absolutely clear, we are not anti-efficiency. We are pro-growth. At BBH we have many efficiency products for our clients. But we should just remember this: efficiency is nice, effectiveness is just so much better.


7 Responses

  1. Quick engineering metaphor in support of your elegant maths …

    imagine that the growth engine is a four cylinder car engine (or four stroke internal combustion engine if you are technical and picky)

    the cylinders are (and they can appear in any order, as they are linked by a crank shaft):
    – ideas
    – markets
    – finances
    – organisations

    So for growth to occur ideas (1) must be generated to be tested in markets (2) so that winning ideas can be further funded (3) so that organisations can scale up (4) to create the real world growth (which creates the base level for the next rotation that starts with ideas again : growth is iterative after all)

    n.b. all cylinders are equally important (good ideas are no more important than good finances) This is not a request for the pre-eminence of ideas.

    but if you set any of them to 50% the output of the whole machine will run at 50% (cf weakest link metaphor, unpacked). Indeed there is not much point optimising any of the other three cylinders if one of them is firing blanks

    so, tinkering around with getting your ideas from 0.5 to 0.6 next time round (as you put it so well with your 0 to 0.1 notion) is not the way to get growth

    nor is just fiddling around in the “market” cylinder and trying t squeeze out a few extra daily sales in the market (n.b. worth doing, indeed a critical function, but only one of four critical functions)

    rather you have to aim at 1 in each cylinder, including the ideas one

    its a tough challenge but this is how the growth engine works

    its why agencies/entrepreneurs/idea people exist and, indeed, get highly paid

    (ps thanks for the great article)

  2. Really excellent article. Something I fight for in my training course on ‘creating opportunities by understanding your clients business’

    In my experience our Acc Handlers (execs, managers and junior Acc Directors) have lost sight of what great agencies do…. in my view to build our clients brands, businesses and reputations. If they don’t understand the clients business they have no chance of being efficient or indeed effective

    Would love to discuss this and other courses I run to give our pressured teams the tools to push back and focus on a bigger picture.

  3. The key to getting the management process to focus on effectiveness is having ongoing metrics that clearly show where great work is making a difference, and making that clear and robust enough so that the C-suite are convinced. If you don’t win that battle, you will never make progress. We have the ‘Efficient Effectiveness’ measure that you are proposing, but better. Happy to explain how we can help if you are interested.

    BTW – did you mean ‘Get rid of econometrics?’

  4. hey, great POV again.
    I appreciate what you are conveying – the perspective is real and the debate is real. But I feel the duality of efficiency/ effectiveness is not real. I mean, the conversation and current perspective towards it is, but that itself is part of the problem. even if we think we can turn up one dial of effectiveness by turning down the other dial of efficiency, the reality is, we can’t.
    the solution is to debunk that frame of reference. it isn’t to prioritise one over another.

    we need to appreciate a marketer’s real options for growth. in 20th century it was through globalising distribution and building brands. in 21st century, the markets are fairly globalised already and the mind space is crowded with brands too. it is fundamentally a different world. the digital transformation means, the growth option now are not through marketing alone, but by being nimble enough to change product, distribution, experiences etc. This ability to rapidly change is fueling growth. the brand is not central to the growth story anymore.
    in that context, the search for effective brand building becomes a game of lottery. so in that sense, it is smarter to not play lottery and concentrate your limited resources on what will surely give you growth. so if brand building is just one of the many levers at the disposal of a marketer to find growth, she would rather not spend as much time and effort on it as she would have in the last century. which means – efficiency would be enough for her brand. well, i write more on this topic at my blog. cheers.

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