Digital marketing might be cheap and measurable, but marketers are kidding themselves if they think it’s truly effective. In fact it’s leading to a “death spiral” of budgets, as campaigns and profits get smaller and smaller.
That’s the conclusion of effectiveness guru Les Binet and Medialab chief data officer Will Davis, whose IPA research shows that budget is eight times more important than ROI when it comes to driving effectiveness. Only 35% of marketers, however, believe that budget is more important than ROI.
Tight budgets and the cheap availability of digital are also dampening ambition in marketers, who are missing out on targeting the over 45s, a cohort that accounts for 50% of consumer spending. The report urges marketers to remember that effectiveness is about budget, reach and scale.
Les Binet said: “Our research reveals a paradox: the more we focus on efficiency, the less money advertisers and agencies make. We believe that the only way out is to rediscover advertising’s super-power: to deliver creativity at scale. We need to Go Big or Go Home.”
Will Davis, chief data officer at Medialab Group, said: “This isn’t about digital versus offline or brand versus response. It’s about balance: doing all of these things well and at the right scale. Efficiency is vital, but the data shows it drives larger growth when combined with scale, creativity and the bravery to experiment.”
IPA director of effectiveness Laurence Green said: “Understanding what truly drives marketing effectiveness is vital for all brands to succeed and grow. We can continue to prioritise efficiency and small margins, or we can make the case for big, bold advertising at scale that will drive big profits for clients.”
