Warped media constructs
Gearóid Carroll
Available for bookings from 1/2025: creative, brand and comms strategy for creative agencies. Advertising, digital, social, earned and experiential.
Where did warped media constructs come from?
Warped media constructs as an idea originated from a few observations I made. The first was an article by magic numbers that examined the distribution of marketing spend across various media channels compared to the percentage of profit they generate. It was based on a piece of research done called Profit Ability 2.
A chart in the article caught my attention. While all channels contribute to profit, some have more comprehensive long-term effects than others. Any channel below (or to the right of) the red line represents a greater proportion of contribution to overall profit returns than the proportion of the marketing budget allocated to it.
Based on this chart: linear television, radio and podcasts and print advertising offer the best value for money for businesses.
What’s interesting is that two out of three of these channels are viewed as legacy media that brands are keen to move away from. When I contracted at Unilever, the global media spend for the brands I managed amounted to about 92 per cent on television advertising. Some markets allocated even higher percentages.
The second influence for this post on warped media constructs was a LinkedIn post by Tom Goodwin. Goodwin spent the best part of a decade working in senior roles for media buying businesses in very technology-centred roles.
It’s only just dawned on me that the reason Traditional Advertising is quite good and Digital ads are uniformly terrible is this. Media owners always knew they were in the business of selling eyeballs. Digital media companies think they are in the business of selling clicks. Our core competence becomes how we see the world. If you were a traditional media owner , your “job” was to attract , to respect , to inform, to tantalize, to satiate attention and repeat business If you were a digital media owner, you were a tech company using algorithms to trick, harass, optimize, chase , game, attention by trying out any one of Billions of bits of content , made for free by users. So while TV companies and traditional media owners are selling attention and eyeballs. Digital media companies are selling clicks and data that show they create success. The philosophy of traditional media is actually far more useful for longer term business success with advertising For MOST companies of any scale, taste and longevity, digital media thinking is entirely wrong But tech thinking swayed the market , they became so dominant and valuable, and profitable, nobody has the balls to call out how dumb this actually is and how much it’s degraded advertising. I just wish we could apply the thinking of traditional media , the need to respect , to seduce , to value , to reward human attention , to digital media , because that’s where most people spend ALL of their time.
His post made me wonder about why such warped media constructs were widespread, when the flaws of lower performing media were readily apparent?
What does the data tell us about media?
The Profit Ability 2 research is a robust study of the UK media market. It took data from five media buying agencies looking at 141 brands in 14 sectors. it was based on a three-year media spend (2021-2023) and across ten media channels. Over a third of the brands matched pre-and-post COVID.
Retail media is one area that I would have liked to see examined in a bit more depth, given its rising popularity and ability to challenge generic PPC and online display advertising.
Media that is often the most lionised and championed by media agencies, notably paid social and programmatic display media were outshone by media types that have been declining investment by marketing teams over the past two decades.
This isn’t a new phenomenon as Ebiquity plc research back in 2018, showed that there was a considerable gap between what marketers and agencies thought were effective, versus real-world evidence.
Secondly, this data indicates that brands are not using the channels in the best way for the long term interests of their business. There is also a correlation with declining campaign effectiveness rates.
Why do we have warped media constructs?
This pivot towards warped media constructs has benefited everyone but advertising agencies. And it would be reasonable to hypothesise that agencies chasing incremental growth, enterprise software vendors and consultancies have been leading large corporates up a digital focused route that provides data and efficiency at the expense of effectiveness and marketing ROI. Below is an excerpt from an equity research paper by Redburn Atlantic on the advertising industry circa 2016: Ad Agencies Marginalised (2016) by Bianca Dallal, Matt Coupland and Mandeep Singh.
Agencies’ legacy businesses are fading as the vast majority of incremental marketing spend is directed online. Digital growth is accruing to leading publishers, enterprise software and consultancy firms, while technology enables marketers to do more in-house. Market share loss is already evident in slower organic growth, but trading multiples fail to recognise the heavy dependence on M&A. Fragmentation. Almost 80% of every incremental advertising dollar spent globally accrues to digital. As their legacy traditional media businesses are fading, agencies are failing to capture digital growth, resulting in a lower market concentration in favour of new entrants empowered by technology
Advertising industry commentator Michael Farmer alluded to this change in his newsletter Madison Avenue Insights back in 2020.
Creative agencies have mastered the requirements of integrated campaigns, from TV to online video, websites, Facebook, Instagram, ad banners and e-mail marketing. It’s a pity, then, that this victory is being undermined by agency price-cutting strategies that leave agencies understaffed and underpaid. Senior agency executives need to create winning business practices – they’re losing the business war.
Platforms like Facebook have repeatedly tried to prove that they can substitute for linear TV in advertising campaigns since the late 2000s with varying degrees of success.
The Devil is in the details.
Remember the question about what the data tells us about media? Let’s examine the data in more detail.
One of the key phrases on the slide plotting out the different media sources is ‘full profit returns’. This term is quite important to bear in mind. Consider how these media channels work.
Long-term memory model or brand-building channels
Linear television adverts
BVoD (Broadcaster Video on Demand)
Radio and podcasts
Cinema
Online video
Print advertising
Good brand building content that we are sufficiently exposed to can stay with us for decades and even become part of culture.
Short-term brand activating channels
Generic PPC (Pay-Per-Click)
Paid social
Display advertising
This means that once you have clicked on the ad and gone to a destination, the advertisement has largely had its effect.
The Long and the Short of it
Now if we look at the performance of these media types over full payback, sustained payback and immediate payback we see that each these media channels serve short-term or longer-term goals. Time matters, Profit Ability 2 found that 58 percent of advertising’s total profit generation happens after the first 13 weeks.
If you are a digital-first organisation, or looking at ‘last-touch’ attribution, your measurement is capturing less than 40 percent of profit generated by advertising depending on the marketing mix of the campaign. Your organisation’s marketing culture could be leaving substantial marketing generated profits unharvested with an overly short term focus and less efficient over longer timelines than a financial quarter.
Binet and Field established some useful heuristics for thinking about marketing spend, which can help shape media choices from a macro perspective of brand-building and brand-activating activities.
Immediate payback – profit derived in the same week as the advertising.
Sustained payback – profit derived from week 14 to 2 years of advertising.
Full payback – profit derived over the full 2 year period.
Anything above the yellow line makes a positive contribution relative to the proportion of marketing investment. Linear television works when used consistently and has a long-term impact.
Paid social media is about achieving immediate results, being a very tactical channel by nature.
Print advertising is unique in serving equally well across immediate goals, sustained campaigns, and delivering long-term results.
Each media channel can play its role based on the communication objectives. Their effectiveness also depends on how they work together.
A second consideration is the channel’s reach in the population. Print is interesting as a universal channel for consumers who read print publications, from older Telegraph readers to Monocle magazine-toting hipsters. However, it’s less useful if you’re looking to reach a football-mad teenager. Ebiquity plc in its analysis of Profit Ability 2 talks about a related concept called saturation:
The study analysed the saturation point for each channel, which is the last point where every pound invested in a channel generates at least £1 profit.
It found that TV has the highest saturation point. Advertisers can increase investment in TV to a higher level than other media and it will continue to generate a profitable return.
Reflecting on my experience at Unilever: I wasn’t brought in to help digitise the marketing mix away from television because digital was an ineffective channel, but because linear television wasn’t as good a platform for reaching busy young mums as it had been previously. We had to broaden the media mix to reach them, which meant more investment in online video and paid social media. In retrospect, we focused on reach, deprioritising consideration of the communication objectives. BVoD, radio, and podcasts might have had greater weighting if I were to do it again.
This might all change
If a channel became more expensive, you would get less value for your money; it would be equivalent to raising the yellow line. Conversely, reducing the cost of the media would be equivalent to lowering the yellow line.
COST INFLATION
Price inflation for larger clients likely endangers cinema, display advertising, online video and BVoD in client budgets first. There may be a strong case at present to allocate more spend to channels that would encourage branded searches, to improve the effectiveness of a reduced PPC spend. Examples of these channels would include public relations, print advertising and television.
JOB TO BE DONE / PAYBACK PERIOD
An emergency locksmith will have a very different budget and timeline for marketing return compared to an aftershave brand. The emergency locksmith wants to rank top in local search on mobile devices to get a call-out; they are far less likely to consider brand building and word-of-mouth. The exception to this rule would be at the top of the market, like Banham in central London, which would be providing more of a concierge security service.
REGULATION
I have worked with pharmaceutical clients where most of the communications we were doing had to be addressed directly to healthcare professionals. In that case, you have a much more limited palette of possible communication channels.
You face a similar situation if you are looking to market regulated consumer products like sports betting, gambling, alcohol, cannabis and tobacco-related products or vapes. The channel limitations are based on screening off protected audiences or reducing the chance of positive brand attributions. Regulators don’t want smoking to appear cool.
So what’s the best media channel based on our warped media constructs?
It depends. The good news is that all advertising channels analysed in Profit Ability 2 generated a positive payback from advertising when sustained effects are accounted for.
You can find similar posts here.
More information
How Brands Grow: What Marketers Don’t Know by Byron Sharp.
Madison Avenue Insights | Creative agencies: winning the battle but losing the war
Profit Ability 2: Thinkbox report, Ebiquity write up, The new business case for advertising presentation.
What the latest effectiveness stats reveal about moneyball media choice | Magic Numbers.
Facebook is a lower quality medium than TV, says marketing academic – Brand Republic News
TubeMogul Partners With Facebook to Help Brands Extend TV Audience Reach to Digital | Adweek
Do TV Ads Drive Facebook, Twitter Engagement? (Study) | AdWeek
Mediatel: Newsline: Starcom: TV is now twice the price… but not twice as good -“There’s still nothing better than [a 30 second ad],” Dan Plant said on a panel at Future of TV Advertising Global. “Unfortunately it costs twice as much now – and it hasn’t got twice as good at what it was doing. You pay twice as much to achieve the same thing.”
Facebook suffers setback in quest to topple TV ad dominance | Digital – Ad Age– couldn’t get sufficiently high rates on ads that it was showing on connected TV devices.
Facebook and Google, Two Giants in Digital Ads, Seek More – The New York Times – Facebook combining Nielsen TV data, treating its ads like TV. and Google plays catch-up with targeting by email address.
What’s behind P&G’s cutback on targeted Facebook ads? | EJ Insight (Hong Kong Economic Journal) – To reach 5,000 targeted viewers on Facebook, the spending needed can reach the equivalent of that required to reach a million TV viewers, according to Peter Daboll, chief executive of Ace Metrix, which tests ads for effectiveness
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