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.
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.