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Clients and agencies told to end obsession with ROI

Clients and agencies told to end obsession with ROI

Agencies and their clients should cease to chase short-term ROI measures and re-evaluate the value in non-digital media channels, a leading marketing consultant has said.

Peter Field, who co-authored Marketing in the Era of Accountability with Les Binet, argued that email is “lousy and cheap” and that marketers should revisit direct mail and find new creative ways to engage with consumers.

“I don’t want to use the word ‘lazy’, but I do think agencies have failed totally to combat what I think is the most corrosive factor in business thinking: the obsession with the cost side,” Field said during a Mediatel event on Tuesday that examined the future of physical media.

“We’re obsessed with squeezing the last micro-dollar out of the cost but no one is looking at the value side of it. No one is looking at what you get.

“The obsession with ROI leads you to cheap, cheap, cheap every time. In many effectiveness reports and cases studies email under-performs time and time again, particularly against mail. It’s lousy.”

Field, who was made an honorary fellow of the IPA in 2006 for his work on advertising effectiveness, argued that impressive digital ROI figures are largely derived from low costs in ineffective channels rather than a genuine investment in long-term brand building.

mediatel
Left to right: Dominic Mills (chair), Peter Field, David Brennan, Nicky Bullard and Patrick Collister

“This goes back to the value side of what mail does deliver,” he said. “It costs more and fails all short-term ROI measures…[but] great effectiveness stories take six to 24 months.”

However, Nicky Bullard, executive creative director, LIDA, said she does not blame agencies for opting for digital media channels over direct mail.

“I don’t think it’s agencies that have walked away from direct mail,” she said. “I think it’s the clients; and why wouldn’t you if email is cheaper, quicker and has instant results? I totally understand it from a business point of view.”

In defence of digital, Google’s head of design, Patrick Collister – a copywriter who cut his teeth at Ogilvy and BMP – added that we cannot underestimate the power of digital channels to target ads – so long as data is used correctly.

“The genius of the digital revolution is allowing you segmentation strategies that are so targeted, so tight – but of course what it means is that actually you need to put more work in at the beginning of the programme.”

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Mediatel hosted the breakfast event, in association with Royal Mail MarketReach, on 2 June. To find out more about Mediatel events, please visit the dedicated website.

Jason Baker, Strategic Director, Hunterlodge Advertising, on 05 Jun 2015
““I don’t know what is more concerning, a client that doesn’t seek to understand the value, not just the cost, of their marketing, or an agency that does not seek to understand the purpose of the communications they are producing. To dismiss Email because it is lazy, or DM because it is expensive, is like arguing that football is better than rugby because of the shape of the ball! The ball does not change the way the game is played. At Hunterlodge, our mantra is ‘Start at the end’. What’s the true goal, the business objective? Not the short term tactical gain or the latest media efficiency. How do all the moving parts and the players fit together to deliver that goal? Only then is it time to pick the equipment and the players – email, DM, outdoor, TV, social, programmatic – we could lump media into a bucket all day long and debate one’s superiority over the other. But at the end of the day, it comes down to what drives the client’s business forward. Yes, end the obsession with ROI. Yes, ROI is short-sighted and it is the simplest form of measurement (and the worst). Just don’t be as short-sighted by blaming the bread and not the baker.””

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