Cannes Lions - The 3rd Age of Effectiveness with Les Binet, Grace Kite & Tom Roach

0:28Ladies and gentlemen, welcome to the Uncensored CMO. things that don't change about effectiveness. So I've caught up with them to find out what their talk was all about. It's called The Third Age of Effectiveness. And I want to find out what is it, what can we learn from it, and what can you do about it? So this is a great episode. I know you're going to enjoy it. Three brilliant people. Here it is. Now, I would say we've got a beautiful view overlooking the beach, but we haven't quite been able to replicate that. So we're in here in our very own podcast studio, sponsored by Walk, as you can see in the background here.

0:55And you're fresh off stage from doing your big presentation how did it go it's not sure fresh is the right word yeah i think it went quite well didn't it i was happy with it very happy yeah well judging by the amount of linkedin and tweets i saw in fact i could have done the presentation myself based on the amount of content that was coming out they're saying nice things are lovely things but you know maybe this isn't as exclusive as i was hoping anyone tweeting um now you could Third age of effectiveness. Just briefly, what was the first and second age of effectiveness? Well, Grace, in her section, I think you talked about the hype cycle, didn't you?

1:34That's right. Many of your listeners will probably know the Gartner hype cycle, but it's all about what happens when new innovations come into societies or industries. And what always happens at the beginning is everyone gets really excited and thinks it's going to be brilliant. But then the hype doesn't always live up to the reality. And there's a bit of disappointment. You know, that's what's happened with online ads in the history in the last sort of 20 years since they arrived. But what always happens in the third part of that hype cycle is that actually expectations start to improve again because we've learned and we know how to use it really, really well.

2:06And we reach a new kind of level where the expectations meet the reality. And actually, it's just working. So that's what the third age is. I see. Right. So we have the boom where everyone's got over estimating its power and what can do. Then we have the reaction to that. And then you sort of get this settled kind of media. So how did how did people's expectation of digital compared to the reality of digital? What are the main differences between what we thought was going to happen? Well, I think I mean, you know, Peter Field and I have been for years saying there are some serious problems with not just with digital, but the whole problem with short termism and digital is part of that.

2:43People getting very excited by the technology and very excited by getting an immediate short-term response, but then forgetting about the sort of eternal principles of brand building and balanced marketing. So I think that's led to a decline in effectiveness over the years. But finally, we begin to see that turning around. It does feel like, and maybe this is literally playing to what you're talking about, but it does feel like there's a revival in the understanding of the eternal principles and a recognition of how to use the new tools. So could we be, you know, could the two be coming together?

3:21I mean, is that in the media data, for example, are we seeing people kind of spending according to what works? Yeah, it's all about balance. And lovely Peter Field did us a really exciting new chart from the IPA databank, one of the killer charts that everyone was snipping away at with their phones when we were speaking, which is that actually somewhere in the mid 2010s the the trend towards short termism reversed and that's so exciting isn't it in the ipa databank we can see that the proportion of people whose planning horizon was six months or less was declining and declining and declining for like 15 years and now it's on the up again that's brilliant isn't it it's a testament to the work that les and peter this is amazing because like i think this time last year i was with Peter.

4:07He did the triple jeopardy, I think. Prophet of doom. It's all gone to shit, right? This is amazing news, right? So we're starting to take a longer term lens. I think so. I mean, I suspect that the crisis of affectionate may have been slightly overstated, which is part of the whole hype cycle thing anyway. But I just think this combination of people getting used to the tools we've got now, doing them in balance properly, getting better creatively. I think everything working in combination just seems to be lifting all the boats and i would caveat that by saying it's patchy i'm particularly heartened by the fact that some of the big tech companies seem to be getting it you know it's like when you get companies like meta and google talking about long-term brand building and the importance of long-term brand building that's very heartening but ironically some of the the cmos who i talk to who work for more traditional offline brands, they seem to be still trying to catch up with what those smart people were doing 10 years ago.

5:09So I think there's a way to go yet, but green shoots. One of my favourite data points is looking at the growth in TV spends that comes from the digital platforms. It's like, do as I say. No, do as I do, not as I say kind of thing. Because you had an amazing chart in your presentation looking at the long and short-term effects from different media channels. That's very eye-opening, isn't it? Yeah, well, that was a piece of research done by Meta. And I find it extraordinary that, according to Meta, the biggest driver of sales effectiveness is TV. Now, that's effectiveness, not efficiency. Top one for efficiency is online video.

5:49But it kind of follows the principles that we've been working by in the agency for ages. If you've got a big mainstream brand, you have TV and online video sort of balancing each other out, reaching all the corners of the market, and then you have other channels that follow. And you have a chart which said a very similar thing for brand building. Yeah, exactly. And this is what I love, actually, is when data sources come up with the same answers. So if you can see the same answers coming out of this bit over here and this bit over here, then it must be true, right? So it must be true that these channels, you know, can do brand building.

6:27And you had a quote, didn't you, about video is to brand building like water is to life on Earth, he said. Yeah, it was a bit pretentious. But I think, how long did that take to come up with? I know, it was good. So we each had a very similar chart from a different source. So mine was from Analytics Partners, yours from ARK, yours was from Meta. And yeah, the one that I showed had all the video channels, including TV, being the really effective and efficient ones doing both long and short. So that's the key from, I think, the connection between all of our presentations was really long and short is happening and it's happening in digital and we're getting better.

7:01And it's not as if we really coordinated that very well beforehand. I hadn't seen the final version of your day and it was only really yesterday I suddenly thought your chart on the effectiveness of different channels is exactly mirroring the meta stuff but with different sources. So as you say, when you see that, different sources all saying the same things, you think, ah, okay, this is true. And just for people listening and watching who can't see the chart, just talk through the long and the short split across those channels because it's very eye-opening, isn't it? Because we have a simplistic view, obviously, TV's brand building and online is activation, but it's not nearly as simple as that, is it?

7:45And you'd be surprised at how much activation TV does and how much brand building online does. So, I mean, overall, Meta said, and you can understand why I like this result, which is they said about 40 % of the effects of advertising come in the short term and 60 % in the long term. My word. Funny that, isn't it? It's a magic number. And I have to say, I can't remember what all the ratios were for the different channels, but we all know that TV does long-term brand building, and that's obvious, but it's maybe not so obvious that online video does it too or that social is not all short-term. It makes perfect sense, doesn't it, right?

8:24Because the reason why video is so good is because it engages all the senses, sight, sound, motion. And if it's on your phone, you're actually holding it in your hand so it's touch as well. We just have to get rid of this notion that TV is offline and brand and digital is online and short-term activation. It's just not true. And one of the best new bits of data I showed actually was just from a Marketing Week survey where I think, what was the question? It was something like, can offline, can digital do brand building? 87 % of marketers says yes. Can offline do brand building? 80 % said yes. So actually marketers think digital is better for brand building.

9:05Now, I'm sure there's all sorts of other reasons why that might be the case, but it is not this off-on thing. It's much more blended. It's not even one channel because the way you use a given channel will affect the balance of short and long term. You mentioned what marketers think there, but we've had quite a few examples of marketers that have kind of said we've over invested actually in digital. The attribution question, of course, has driven, you know, a number of brands we've read recently have actually come to rebalance that. Is that what you're saying? There's sort of a re... Well, that was the main point I wanted to land with my bit was about measurement.

9:41Because I think one of the reasons we got into such a short-term mindset, or we were in such a short-term mindset, was we were only measuring short-term responses and we were focusing on short-term responses. And I think attribution modelling in all its forms is very much to blame for that. It just doesn't give you the right answers. and what's begun to happen is advertisers have begun to realise that. So as I said in the talk, I talked about the Adidas case where Adidas accidentally turned off some of their paid search and realised it wasn't doing anything, despite the fact that the attribution figures said it was one of their most important channels.

10:25And they just turned it off and went, no, nothing happens. So not that all paid search doesn't work, But that particular stuff, I think it was buying their own brand name, wasn't doing anything very much. Now, when it comes to econometrics, because we talked about the hype cycle, didn't we? And I think you overlaid as well the crisis in creativity of awarded work as well. How does that compare to what you see on your database of kind of real world examples as well? Are things getting better or worse? That's what's so exciting if you're a bit of a geek when it comes to data like me. Imagine the two things line up, right?

10:59And it's not exactly, but there's a point in time in the middle of 2010s where both data sources show a turnaround in effectiveness. And that's astounding, right, to see it in two places, two really reputable, solid data sources, seeing that turnaround. It's how we know it's really true. But also, outside of the awarded or the entrance to the awards, actually, and I should say that this is amongst advertisers that are using econometrics and measuring what they're doing really well and optimising really well, there's actually a faster turnaround and a faster increase in that set than there is in the IPA data bank.

11:38and there's a source of data that we don't have. It would be wonderful if we had online brands that were using econometrics versus online brands that were just using attribution modelling. And I bet that would be sort of the sheep from the goats, as it were. I can't do that. We can system one days. We've tested everything in the UK for five years. Average star score has gone from 2.2 to 2.6. It goes up by 0.1 a year on average sort of thing, which is quite good. Interestingly, Christmas is driving a lot of it. It's like every year Christmas gets better and better, so it's kind of rising tide. But even outside of Christmas, we're seeing gradual improvements.

12:14What do you put that down to? Because more people are using System 1 to help improve their... Ah, of course. Is that my econometrics equivalent of your answer? I thought it was people just copying the John Lewis ads, you know, or the Adam and Eve style. There is a fair case for that, actually. You know, you take the Aldi Kevin, the carrot campaign, it's clear in there, isn't it? we wanted to do a John Lewis. You know, that's genuinely got a big part to play, I think. I mean, what it did brilliantly is demonstrate the power of emotional brand building advertising and, you know, what you can achieve.

12:46So, yeah. I just wonder if, I mean, people are just getting better. There's more knowledge. There's more, I mean, all the stuff that you guys publish is becoming more well-known. I think, you know, it's, at least could be part of it is just people knowing how to do it better and doing it better. I totally agree with you, actually. Yeah, yeah, the evidence is there. Different source of evidence is there. Yeah, as well, people are getting trained more as well in terms of taking courses and getting trained up in it. Yeah, I suppose another thing on that note is that digital marketing is more professional now, probably.

13:16In the early days, it was probably people more interested in the tech. So people came in through the tech route as opposed to a marketing route. That's, yeah, very much so. It feels like there's a bit like I was talking about earlier. There's a rebalancing in skill set, isn't it? the sort of digital first natives, you know, are starting to go, oh, yeah, this thing called Brand, it can help, you know, and vice versa, you know. It's definitely helping out. Grace, there's a really interesting thing in your presentation about the distinction between ROI between online brands and offline brands. Can you explain that?

13:46Because there's a real penny drop moment for me when I, of course, you know, that makes sense. Can you explain what that was? Yeah, so we were able to use the data in ARK to look at how effectiveness was changing in different categories. and we grouped together the categories where your decision making mainly happens offline. So this is things where you shop in a real life store like FMCG or packaged goods more generally and clothes and food, those kind of products. And then on the other hand, we looked at categories where you do quite a lot of the thinking online. So you're researching or you apply and it's things like financial services and others like that, maybe durables, you're shopping for the right, you spend some time thinking about the right washing machine.

14:29And what's happened in those two is it's been a very different trajectory. Actually, effectiveness is improving in the time online categories, but not in the time offline categories. And that makes sense, right? Because it's in the time online categories where all the learning about how to use online media really, really well has been happening, where people are making the most of these new tools. They're spending more on online and they're using them really well. And in the offline categories, not so much. It's a bit of a worry. Those online brands, they get the benefit of all the great new things that digital can really offer, both long and short.

15:06Yeah. And are they more invested in it as well? Is it a bigger percentage of their media spend so they take it more seriously? If an offline brand, it might be 10%, it might be a smaller percentage so you're not paying as much attention to it. Yeah, absolutely. So, I mean, in the businesses in ARK, in the time online categories, 2019, 50 % of the budget. In the time offline categories, FMCG and those. more like a quarter. So, you know, a really big difference in how much they've gone into using the new tools. And balance of long and short-term spend as well. Interesting kind of correlate. You're talking about data sets matching up, so you didn't quite get to 60-40, I noticed.

15:42And you kind of rounded it down, Grace, come on. So you do know that the Binet and Field latest version of that number is actually 62-38. So ours is rounded down, you see. So in fact, it's even closer than this. Just a rule of thumb, Les. Yeah, I know. Well, and also there's some variation over time. So actually, if you were to look at the second half of our sample, it would probably be closer to yours anyway. And Tom, how does actual media spend reflect that as well? Because there's been some dramatic changes in where spend's going. Take the 60-40, you know, where people should be spending their money.

16:18What do you think? Where are people actually spending their money? Are they listening to that advice and following that advice in reality? I think they increasingly are. I mean, Les, you'll probably know better what the actual splits are. I don't actually know. I know this one, yeah. You'll know that, won't you? Yeah, yeah, actually. I've never made this chart yet, though. Oh, is this a Grace exclusive? What's it look like? I mean, actually, it's really surprising because it is quite close to 6040 in ARK. And bear in mind, these are people that do econometrics. Yeah. But also, what's really interesting is that if it's a product that sells online, people are doing the short more.

16:54And if it's a product that sells offline, actually people are overestimating, overinvesting into the long. So it's more like 70-30. And those guys might not be catching the bottom of the funnel properly. Their bottom of the funnel might not be watertight. And this is just kind of big brands, isn't it? I mean, the reality of a lot of the spend that is going into Facebook and Google is millions of tiny little businesses that are probably mostly more towards the sales activation end of things. So it's, who knows? This brings me on to my favourite Tom quote, right, which you did for us when we did this little bit on scaling up, which is back in the day, they always said, don't just put your TV ad on social.

17:34And now you shouldn't just put your social ad on TV. So what role does a creative have in kind of, you know, impacting on effectiveness? The creative is the creative content or the creative is an individual. I mean, it routinely comes up as absolutely essential to effectiveness. And I think every study, I think it was Paul Dyson recently did a rerun of his brilliant chart with creative as the second most important thing after brand and category size for your effectiveness. And so, yeah, as a creatively driven advertising person, you know, there's confirmation bias, but I always love it when that is repeated.

18:10And I mean, Google talk about it. Everybody talks about creative being the most important factor. and of course it's I think what and the some of the stuff I was talking about today was was just really how we're getting better at using the new tools we have you know we've had you know 20 odd years to get used to some of them we've had 70 years making tele ads we've only had three years making TikTok ads so we of course we're not going to be quite so good at it but we'll only get better and better so I think we have to look at things in the round in terms of the creative tools we've got and and and and the the skills that we have and the experience we have in making this stuff.

18:44And I think if I'm right, you were quoting a study actually at System 1 with Pinterest as well, looking at the role of emotion. Because I think people assume that, you know, online's there to sell, right? It's a serious, you know. But actually, if you think about it, if it does brand as well as, you know, activation, then you should think about, you know, emotion and other things in your online advertising as well. And the Pinterest study was quite fascinating. I think the thing with, I mean, one of the points I was making is just about how video has become so essential. It's become, with the rise of video on smartphones, that I think has massively fueled the possibility of doing brand building in digital in a way that when when Google and Meta started, it wasn't video led.

19:21And so that was very much direct response. And I think what we're now seeing is the flourishing of brand building on in digital because video is possible. And so all these platforms, whether it's Pinterest or whoever, they're predominantly video now. And of course, TikTok is a huge video channel. So that, I think, is a really essential part of why of why this is these kind of green shoots. that we've all been talking about has become so possible. That makes so much sense. I mean, I find TikTok amazing because you've basically got like millions of creators creating their own little mini films, just like an ad, isn't it?

19:53And that was the sort of second big point I was making was around the opportunity we now have to use these creators. There are millions of them. They're learning how to use, create content in their channels. And they're an army now. And we as an industry can benefit from that if we use them correctly. Not solely, because I think the best way to use them is probably to give them, you know, allow them loads of freedom creatively. We still need to do paid ads, which are probably quite tightly controlled. But I think in combination, there's something very interesting about doing really, really super kind of tuned paid ads, which really obey a lot of the best practices that we know about.

20:32And then allowing creators as well to do really cool stuff that they know is going to reach their audience and get loads of organic reach. You referenced Mr. Beast, didn't you? I did reference Mr. Beast. I'm a fan of Mr Beast. Well, he's enormous. Mr Beast, we had to explain to Les on Twitter a couple of months ago. I don't know. The producer James was telling me about Mr Beast as well. Go on, tell us. Les Bonet is the Mr Beast of econometrics. So does he do lots of stuff about advertising evaluation? He doesn't, no. But he's going to be the, is he a billionaire yet? He will be the first creator billionaire.

21:03He has, he's epic. He does, he, and the thing about him, he knows how to make amazing content. he'll kind of give you the the story immediately up front he'll give you loads of emotional highs throughout the video and it's just and it's very very well produced stuff you know and youtube allows you to do to create really really high quality content um which i think is part of part of the trick and he throws loads of money at the production of the content which i think is another factor which we probably don't talk about very much so what are the kind of guiding principles for advertisers get kind of creative right online well the first thing one of the major points you you do actually have to obey the platform best practice.

21:42They know an awful lot, and they've done a lot of testing with people like you and with Cantor and Ipsos about what really works in their platforms. And they all say make bespoke stuff for the particular platform you're working in, which goes back to the point about don't just put your tele-ad on online. So that's the thing you really need to do. Get the best practices right for the particular platform you're in. Make bespoke for the platform, so long as it's within the context of a campaign or the brand that you want to communicate. And then you get beyond that and you get into some really, really fundamental, basic creative principles that we've sort of always known.

22:18And it's about grabbing attention, being really well-branded, telling stories that communicate, being different. There was a great stat from, I think it was from Ipsos that said, if you're different and you challenge category conventions, you'll get 40 % more watch time. So that's really, really great to see as an ex-BBH-er to see difference being represented in that. And then the final one that you'll love is just emotion. So, you know, we can't say enough the importance of emotion. I think it's probably your work, Les, that first established that as a really basic and important principle. And it just gets proved time and time again because emotion is what lands things in the memory and memory is what drives brand building.

22:57So if you want to do brand building, you have to have emotion. And, you know, going back to the video point, video is really, really good at emotional response. so a b c d e was my kind of five principles across platform creativity not new but you know you know it's sort of fundamental really amazing now we're in can of course not everyone's in can surprisingly if people want to watch you deliver your presentation how can they do it well there's going to be a webinar next tuesday 27th the ipa is going to be hosting a webinar and hopefully there will also be a recording available sometime afterwards.

23:35And that will be a longer version with a bit more content. Oh, will it? Okay, very good. And lots of snappable charts. From what I've seen, plenty of nickable charts. Killer charts. Killer charts, yes. Well, listen, thank you for coming on and sharing a bit more about the presentation. We look forward to seeing you on the 27th and have a wonderful rest of your time at Cannes. Thank you. Thank you. Thanks very much. Thank you for listening to The Uncensored CMA. I hope you enjoyed that conversation with Les, grace and tom i certainly did coming all the way from can if you'd like to get more content like this please do hit the subscribe button wherever you get your podcasts and if you want to watch the episode head over to youtube hit subscribe and never miss an episode again if you want to follow me i'm on linkedin at john evans or over at twitter at uncensored cmo thank you for listening and watching i'll see you next time