IT CAN’T BE THAT SIMPLE

Or Have We Over-Complicated Our Measurement Systems?

By Erwin Ephron

Recently a group of leading marketers was given a list of simple statements about marketing, such as:

• The number of times a brand appears in a TV commercial, the higher the brand recall.

•  For advertising to increase sales, a brand’s share of advertising should be larger than its share of market…

• Brands that have more buyers are also bought more frequently…etc

The marketers’ assignment was to identify all of the statements listed that were actually true.

They did poorly, correctly identifying only about one-third. This led the survey team to conclude that professional marketers are not well informed about how marketing works.

I disagree with that conclusion. Today’s marketers can’t believe that anything true and useful about marketing can be simple. Like us, they are victims of the proliferation and complexity of data available today.

Ockham's Razor

This is new. Historically, humanity’s search for knowledge has focused on simplicity not complexity.

Ockham's Razor (after William of Ockham, a seventeenth century philosopher) is the widely accepted scientific principle that "entities” (or in our case “measurements”) must not be multiplied beyond what is necessary.

It says the simplest theory that fits the facts of a problem should be the one used to solve it. This concept is also known as the Principle of Parsimony and it’s raising its head more frequently these days.

Here’s a recent quote from David Cohen of MediaBizBloggers, “After 15 years in the digital media business I can safely say that our industry is overly complicated. In order for us to truly scale our business it is critical that we make it easier to plan, buy and steward digital campaigns.”

David goes on to propose a refreshing solution, “Only paying for the amount of time that an ad is viewed, and obviously not paying for ads that are not viewed at all … will be a far more accurate representation of true ad delivery.”¹

And I would add it is a simple, single measurement.

Double Jeopardy

Going back to easier times, Andrew Ehrenberg, the dean of advertising research, established a basic law of brand marketing he called “double jeopardy.”

Ehrenberg observed that brands with more buyers were also purchased more frequently. And since brand loyalty seemed tied to brand penetration, the obvious goal of brand marketing should be to increase the total number of buyers.

A favorite national advertiser of mine has gone back to Ehrenberg and concluded that the early indicator of success, increased penetration, should be a single immediate standard of advertising effect.

The reasoning: increases in penetration can be measured quickly so that ineffective campaigns can be discarded and effective ones supported, saving a lot of money.² In contrast, our complex and popular ROI measurements need a year’s worth of adspend to tell us what happened.

That’s also pretty simple. But in a different way.

- January 4, 2010 -

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