The Overwhelming Complexity of Digital / Social Marketing Creates Problems of its Own
Scope of work focus is now needed to simplify decision-making and improve the quality of marketing decisions
Credit: Paul Noth, The New Yorker, The Cartoon Bank
The digital and social advertising era, which began about 15 years ago, brought new uncertainties to marketing: “How effective will ‘personalized targeting’ be, and how much investment should we make in digital and social media?”
The promise of personalized advertising — at least versus "mass advertising” — was so alluring that it could not be ignored, and advertisers and agencies jumped into the deep end of the digital / social pool.
Digital and social media now dominate the landscape, and media spend / mixes are highly fragmented, covering dozens of channels, and creative scopes of work call for an extraordinary number of deliverables to fill every channel. The media and creative scopes of work for 2024 are astonishing in their range and complexity.
At one major agency we reviewed a short time ago, 50 creatives were cranking out over 15,000 creative deliverables every year for their 12 major clients, 13,000 of which were adaptations in digital / social channels — to fill their clients’ desires for multi-media advertising. That’s about 300 deliverables per year per creative, or one per day. (Contrast this with David Ogilvy’s statement that “The average copywriter gets 3 commercials a year on air” in Ogilvy on Advertising, 1983).
Industry executives are now routinely struggling with 1,000-piece media jigsaw puzzles — a serious upgrade from the 20-piece children’s puzzles they trained on during the TV-Radio-Print era, when they worked with one AOR agency and created very few ads.
Behavioral economics tells us that when individuals have to make many complicated decisions in the face of uncertainty, they fall back on intuition and rely on their “gut instincts” to make decisions as they plow through their daily work. This is precisely what is happening today in marketing departments and at media / creative agencies.
Intuition and gut instincts feel right but are entirely wrong, argued Nobel-prize winning Daniel Kahneman in his best-selling book, Thinking, Fast and Slow.
One critical theme of the book is “overconfidence from intuitive judgments.” Kahneman illustrates how personal confidence in decisions often exceeds their accuracy. Overconfidence is particularly perilous in complex and uncertain situations where intuitive judgments are likely to be flawed. Current marketing decisions about spend, mix, and the volume of creative work fall into this category.
Kahneman points out that individuals are extremely loss-averse; they are more sensitive to losses than to equivalent gains. This leads to irrational decision-making, especially in high-stakes situations like marketing, where too many decisions can be made to avoid risk rather than seek benefits that are not guaranteed.
Marketing decisions in the complex digital / social era have not successfully driven brand growth. Sales growth has been moribund. What has grown, instead, are the share prices of advertisers, driven by financial engineering and cost reductions.
Campaign recently reported that “42% of the industry’s top-spending advertisers failed to deliver annual growth higher than 2.1%, the average annual US GDP increase over the past 13 years.” Yet, ad spend increased by 78%. Eight FMCG companies grew at only 2% per year, but half of these barely grew between 0.1% and 1.2% per year. Nine financial services brands grew at only 1.2% per year. (See Revealed: Brands’ decade-long revenue growth problems — and how agencies can turn things around, Campaign, Ian Darby, January 23, 2024).
Marketing needs to slow down and use more deliberate methods for creating and executing its scopes of work. Today’s complex scopes of work, created to “cover all possible media bases,” need to be critically examined, simplified, and refocused.
How can simplification and focus be achieved?
Scopes of work should be refocused to solve brand growth problems rather than cover all possible media bases.
Every scope of work should include documentation of 1) a brand’s historical sales and market share performance; 2) the assumed reasons for any negative change in brand performance; 3) the role of media, technology and creativity to turn brand performance around; and 4) the specific scopes of work recommended to achieve brand performance improvements.
This type of focus will surely lead to a simplification of the media mix and the scopes of work — and with it, we should expect more deliberate and less intuitive decision-making. This will help solve today’s complexity problem for advertisers and their agencies.
I wholeheartedly agree !
The explosion of content and channels indeed demands a more nuanced approach to personalization and audience engagement.
While focusing on specific brand problems is crucial, it's only a piece of the puzzle. Integrating AI into our strategies could be a game-changer IMO, offering solutions such as predictive analytics for better understanding of consumer behavior, automation for more efficient & targeted content production, and real-time optimization of marketing campaigns.
Also… AI can enhance customer segmentation and personalize experiences at scale, making it possible to manage the complexity of today's digital ecosystem more effectively.
Net net, I believe we need to strike a good balance between gut / intuition and data-driven decision-making.