This is a summary of the presentation by Greg Stuart at the Future of Online Advertising conference today in New York.

Greg Stuart is the former CEO, IAB (Interactive Advertising Bureau) and co-author of “What Sticks“. He is an industry insider who has worked for agencies as well as advertisers.

His views are very interesting and although the overall concept of measurable marketing is not new, the numbers, metrics, and example case studies from some very large advertisers, make for compelling reading:

This is marketing’s inconvenient truth. It contains insights from research into US$1 billion of advertising spend by brands such as McDonanld’s, Ford, Motorola, VW and many other Fortune 500 companies.

If advertising had a slogan it would be “half the money is wasted”. Marketers joke that they don’t know which half, but it is not really a joking matter. The research for these findings was the largest ever to do comparison on a medium by medium basis. Over 1.1 million consumers were surveyed.

Over US$112 billion ad spend is wasted out of a total of $295bn

Advertisers and agencies use the excuse of “publicity” to justify a failed campaign.

The are three main areas to review in campaign effectiveness.

Motivations

Did the campaign speak to the correct motivations of consumers?

36 % of campaigns failed.

Messaging

Did the campaign message get through?

31% of campaigns failed

Media

Was the correct media mix implemented?

83% of campaigns were sub-optimal

This is a big problem. A bigger problem is that the industry won’t take responsibility.

Marketing is hard. Suppose you have 5 options for creative, copy, media plan, etc. The possible combinations are huge, and the ability to make a mistake is very easy.

The future will be even more confusing. In the US now there are:

30 million DVRs (Digital Video Records like Tivo, that let you skip the ads in TV shows)
12% own an iPod or other MP3 player
50 million households have a gaming console

The number of channels and options are only going to increase.

How do you make sure your advertising sticks?

First Step - admit there is a problem

“Real knowledge is to know the extent of one’s ignorance.” (Confuscious)

1. Universal agreement of goals
Everyone should agree (internal teams, agencies, research, media) on objective for the campaign.

2. Have a back up plan (Plan B)
Have one at the outset, don’t just blame people.

3. Ensure the campaign always meets the three M’s

Motivations

Example:

ING are an innovative company and used humour in their advertising and promoted the fact that they were innovative.

The problem with this is that people don’t buy financial services because the company is innovative. Despite this, ING ran the campaign for 4 years.

Their new campaign tag line, “simplifies a complicated financial world”, is working much better for them because it actually fits with the motivations of the consumer.

Messaging

Out of 5 advertisers (P&G, J&J, Kraft, Nestle, McDonald’s) that did creative research of online campaigns:
1 was okay
2 found half didn’t work
2 all ads failed and had to start again

“Online advertising must pass the glance test”

Can see it for 2 seconds and get the message, AND recognise the brand immediately.

Media

A McDonald’s campaign was found to be 50 per cent more effective during lunch. Online doesn’t charge any different for time of day. All their ads should run during lunchtime.

Media mix influences success. Consumers are thinly spread now. Don’t start your campaign with just one medium.

McDonald’s took 20 per cent from TV put 13.4% into online kept the rest and increased awareness by 5 per cent when it had previously levelled out using traditional media.

Understanding ROI from media is essential. Marketers that were able to optimise their media mix achieved average gains of 35%, however, how can you optimise if you don’t know which media is working and given you a return?

Consider the 70-20-10 rule

70 per cent budget to what you know works

20 per cent to innovating off of what you know is working

10 per cent for completely new ideas