Fear of finding out

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Fear of finding out – an introduction

Fear of finding out was how Paul Holmes characterised marketing as a discipline and its approach to return on investment. This was an article that was originally published in 2019, but was going around in circles that I keep an eye on online recently.

The article characterised marketing in this way:

Marketing and public relations continue to focus on reach and awareness. Is that because they’re afraid of finding out whether they really make a difference?

The PR Industry’s FOFO Problem | Provoke Media

What do marketers actually focus on?

According to Nielsen:

top marketing objectives
Please rank each of the following marketing objectives for your business from most important to least important. Chart shows the percentage of respondents who picked that objective as their No. 1 priority.
Source: 2021 Nielsen Marketing Report: Era of Adaptation.

Looking at those marketing objectives ROI and business impact are a key consideration embodied in both customer acquisition and brand awareness.

Long and short term goals

In order to understand marketing one has to understand that marketing provides short term benefits and long term benefits. Certain techniques skew towards a short term delivery and others deliver over the long term. The approach mentioned in Fear of Finding Out was very skewed to short term techniques.

That means that the return on investment timeframes could be very different. The longer the time frame that you are measuring the full return on investment, the harder it is prove it.

But surely you want things to work fast? True. But what if there are marketing techniques that keep on giving? Think about advertising jingles that stick in your head. They have mental availability decades after you’ve heard them.

In How Brands Grow by Byron Sharp, he distills down the findings from decades of empirical research into marketing. Two of the most important factors are mental availability and brand salience.

Mental availability is the probability that a buyer will notice, recognize and/or think of a brand in buying situations.  It depends on the quality and quantity of memory structures related to the brand.

It is different from brand awareness or brand recall because it is situational in nature and thus hard to measure, a notable exception would be through observational research in retail environments. Brand awareness and consideration are two relatively indicative proxy measures for mental availability.

Here’s what research firm Nielsen had to say about those proxy measures:

Nielsen research shows that a 1-point gain in brand metrics (e.g., awareness and consideration) drives a 1% increase in sales. Importantly, upper-funnel efforts also generate an array of ancillary benefits that can drive more effective sales activations—and not just for consumables. For example, Nielsen recently measured how effective a financial services company’s marketing efforts were at driving sales across approximately 20 markets and found that the correlation between the upper funnel brand metrics and marketing efficiency was exceptionally strong (0.73).

Long-Term Business Vitality Should Outweigh Short-Term Sales Gains by By Cara Kantrowitz, Vice President of Solutions Consulting, Nielsen Research

A second aspect is brand salience which is how distinctive a brand is. This again helps with the memory structures that relate to a brand.

You might remember TikTok memes for a few months?

Go News India

What is the mental availability created by all but the most persistent Facebook ads? What’s the mental availability of a Google ad?

How are you measuring and driving brand salience for your company? Because that will affect sales further down the funnel.

For business to business audiences, which are covered in Byron Sharp and Jenni Romaniuk’s How Brands Grow part two – the results are very similar.

The now bias

The now bias can be seen in the finding of the research cited by Holmes. The responses (and probably the question design that elicited them) are very focused on the bottom part of the marketing funnel / sales support.

Among the other troubling findings of Proof’s research, which included more than 400 senior business leaders in 160 key Fortune 1000 C-suites:

94% reported that they had little or no reliable understanding of the quantifiable business value actually delivered by marketing;

97% said they had little or no idea how much money they should be investing in marketing and PR;

72% said that they expected that 2019 marketing budgets would be cut by 10% or more.

Says Mark Stouse, Proof founder and a veteran of marketing and communications roles at BMC Software, Honeywell, and HP: “Many of the C-suite respondents went out of their way to say that their frustration did not stem from a lack of belief in marketing’s impact, but rather the failure of their marketing teams to embrace full accountability for ROI and business value.”

This doesn’t ring true based on research I have seen from Nielsen:

important measurement
Please rate the importance of each of the following metrics / measurement capabilities to your organization. Chart shows to p-2 (very important and extremely important) on a 5-point scale.
Source: 2021 Nielsen Marketing Report: Era of Adaptation

Research by Ebquity suggests the marketers are focused on ROI. You can get the full research here.

Marketers also have a now bias, that’s due to astonishing levels of CMO turnover in many organisations that’s only increasing over time.

The now bias creates revenue opportunities for agencies, with a temptation to do what’s right for them rather than their clients. ‘The quantifiable business value’ are likely to be getting worse. While client budgets are stagnant, media buying agencies are taking more of the money on online advertising (7 – 10 per cent commission, compared to 3 per cent on other media channels).

So there is a natural business incentive for them to lean into ‘business transformation’ / ‘digital disruption’ narratives popular in board rooms. Digital has its place, but it might not be the panacea that you’re looking for. I say that not as a digital cynic, but as a seasoned digital focused strategist, which means doing the research and recommending the right media for the right job.

efficiency

Depending how you look at media channels some are better than others.

effectiveness

So how is the now bias exhibited by the C-suite? In business value they don’t think about brand building. Yet businesses are quite happy to factor in brand value when thinking about the value of goodwill on the balance sheet of their accounts.

More marketing related content can be found here.

More information

The PR Industry’s FOFO Problem – Marketing and public relations continue to focus on reach and awareness. Is that because they’re afraid of finding out whether they really make a difference?