Experience is the answer to disposable advertising

The numbers are clear: brands with the best customer experience get more bang for their buck.

Last week in Cannes, Peter Field and the IPA launched a report showing a dramatic fall in the effectiveness of all IPA case studies. And, perhaps more surprisingly, those that are awarded are no more effective than non-awarded campaigns.

It signals a shift towards short-term "disposable" creativity and measurement that is entirely prevalent in the industry. While we make nods to long-term brand and business transformation, as targets loom and budgets are cut, the focus inevitably falls on short-term tactical campaigns.

In many ways, advertising is broken

The promise of programmatic relevance is not being delivered. Most of our industry seems entirely focused on delivering eyeballs at the lowest cost. Quantity, not quality. Performance over posterity.

Even when we shift our emphasis to longer-term objectives, we simply move media spend into brand spend as a panacea for creating a truly engaging brand experience. 

Adidas announced last month that it was shifting its focus away from short-term brand metrics to a longer-term focus on brand health, citing: "The pressure to perform means the bulk of Adidas’ spend is going on short-term activations." The problem is that its shift in focus was simply a shift in advertising spend.

Field and Les Binet’s earlier report for the IPA, The Long and the Short of it, has had a lasting effect on our industry’s approach to brand-building. Stronger brands undoubtedly mean stronger short-term performance. The assumption, though, is that in order to achieve that halo, one should spend more on brand to achieve a magical 60:40 ratio.  

There’s something in nothing

Andy Kirk gave a fascinating presentation on "Absence, emptiness and invisibility: the design of nothing" recently. In it, he talked about the importance of understanding the "why" behind a lack of data. 

One example he gave was that if one plots where immigrants end up living in New York, the reason that there is a big space in central Manhattan isn’t because they’re priced out of the market (or worse, not welcomed there); it’s simply Central Park.

My point is, if we only look for an optimal balance between brand and performance spend data, we’ll never do anything other than move the needle between these two points. We need to take inspiration from brands that break the rules – brands for whom there is lower or even no brand spend information.

We can shift the gears

In the latest Proximity Experience Effect Study, we reviewed the relationship between brand value (YouGov) and brand spend across more than 100 brands. There was, predictably, a direct correlation across a number of industries, from banking and financial services to retail and technology.

However, it also showed that, in each, there were brands whose customer experience allowed them to dramatically shift the gearing in this relationship. Comparethemarket.com, for example, spent 49% less per year than Moneysupermarket.com to achieve 91% brand value – showing the power of the meerkat. Ikea also outperforms the category, spending 30% less than the average and achieving category-leading brand value.

It has been proven that customers who have the best brand experiences spend 140% more than those who have the poorest experiences (Harvard Business Review). The effects on efficiency stretch across the purchase funnel, with good experiences increasing brand awareness by 60%, orders by 60%, average order value by 50% and repeat purchase by 90% (Forrester, February 2018). 

We need to find our true purpose again

To fix advertising, brands need to go back to basics to find their true purpose, placing the customer back at the heart of an authentic relationship.  

Nike does this well. As well as throwing money at advertising, it invests in its experience. More than this, it does so in a way that feels core to its brand; authentic, not appropriated. The addition of a foot-scanning function to its app and Virgil Abloh’s new Nike store in Chicago (pictured, above) are testament to this. Nike takes its digital/personal/physical service model and adds a dose of sustainability and personalisation to the mix.

After reading the IPA report, someone much smarter than me said: "I quite like that we have more data than ever, yet it is still human emotion that drives the decision-making, which is of course perfectly rational." Thanks, Ronnie.

Adam Fulford is chief strategy officer at Proximity London

Picture credit: Nike

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