Creativity alone can’t save a broken ad business

Yes, ad spend seems to be increasing substantially.

Yes, advertising effectiveness is definitely in decline.

So effectiveness per dollar spent is truly down the pan.

Andrew does a great job of pulling together some of the many strands that explain this, and his conclusion is correct: ‘the marketing machine is failing”.

His analysis of some of the reasons for this is also precise and aggregates much of what we’ve been talking about for years.

But there’s a few things missing.

At a basic level, the reading of what actual spend is can no longer be taken for granted. The number of dollars leaving a client and being seen and heard by audiences can be reduced by up to 75% (estimates vary). What is being measured here?

As for actual ad exposure, we’ve all seen the studies by the ANA and Isba, and no one knows what the walled garden waterfalls look like because… only they know and they’re not telling.

What does ‘viewability’ really look like on Instagram, Facebook, TikTok et al? We don’t know. Probably terrible.

We do know that vast amounts of money are being squandered on ads that only get seen by bots (some benign) and lots that don’t get seen by anyone at all. We also know that the thresholds for viewability are, er, questionable and we know why.

We also don’t know how much money is really extracted from advertisers’ budgets (spoiler: lots) by some of the biggest global media agencies, thus further reducing ad exposure.

Virtually all the revenue accrued by the gigantic adtech industry has come from advertiser budgets, reducing their chance of effectiveness and by a lot more than they add back in the supposed benefits of audience targeting.

And this is before attention is added into the mix. There are lots of great studies by Amplified Intelligence, Lumen and Adelaide on this, but they are at the end of the chain after huge chunks of the budget have been extracted.

It is clear that a lot of the extra advertising spend isn’t having any effect at all and can’t, because much of it doesn’t lead to effective ad exposure.

Estimates of what the actual, effective spend by advertisers are increasingly, well, unreliable as a barometer of advertising exposure, let alone effectiveness.

We simply have no idea how much advertising spend is actually doing what it is supposed to do but we do know that it’s a much smaller proportion than it was.

And that in itself explains a big part of the drop-off in effectiveness, before AI even comes along to add steroids to this admixture.

The absolute truth is that ad spend isn’t increasing because advertising works, but because it often doesn’t. Many advertisers force-feed the public because so little of what they do, especially in one-to-one media, actually produces anything.

They drink the Kool Aid that one-to-one is where the action is and abandon the collective media that drives the marketing engine.

It’s not ‘brand’ and ‘performance’; it’s a constant blend of many layers, a lot of which aren’t even advertising, with permutations of paid-for and organic channel use that is fed by the influences on marketing performance (eg price).

Many advertisers don’t get much response from tons of ‘one-to-one’ so they spray and pray in the pursuit of an ‘outcome’ (ie anything to give them hope).

Andrew’s conclusion (‘It’s all our fault’) raises all sorts of other issues.

Who is the ‘our’ in this question?

Andrew mentions lots of points about creativity, the disparity between profitability and actual spend, short-term objectives, attention, clutter, bombardment and they are all true.

But the conclusion that the solution is ‘better creativity’ only scratches the surface.

There is no shortage of creativity and people who are creative. A whole multi-billion-dollar industry has been built around the creator economy, and brands such as White Fox have found vast success through non-traditional marketing.

The core reasons for advertising’s decline are not creative but economic and operational. They’re business issues.

We like to tell ourselves that advertising is somehow different from other industries, but we, too, are controlled by fund managers, stock and bond holders, financiers, investors and analysts.

And these are the target audience for many of our clients, especially the international ones. So they are ours, too.

There is no point in hunching over dashboards and spreadsheets in the hope of spotting a spike in the testing program if the business doesn’t see identifiable business results at scale.

The real solution for our ills is to address the need for our clients to coordinate their marketing to produce net incremental profit uplift that demonstrably adds value to brands and businesses.

Value that can literally be taken to the bank.

With measurement that proves it.

Creativity is a crucial contributor to this, but in and of itself, it’s necessary but not sufficient.

The answer is a root-and-branch change management program for advertisers. Unless they want to change, the advertising industry can’t do it on its own.

This needs to be accompanied by an equally fundamental shift in the agency business model, too. Great agencies will help advertisers change and improve the value of their businesses.

This is all doable but granular and if you’d like to know more about how we get there, join us on October 16 at the ‘Advertising: Who Cares?’ fundraiser in London.