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Intelligence Briefs

If you focus on efficiency over effectiveness, you're just filling space

Industry Contributor

Mark Coad, CEO
PHD Australia

30 September 2019 3min read

A great, insightful piece about the pursuit of efficiency in creativity. My son is doing Business Management in Year 11. I asked him what he thought of this. He said “simple – efficiency is the way an organisation allocates its resources, effectiveness is a measure of business success” Simple, right? Well then how do some lose their way so badly on this?

Particularly in media. As our very own Malcolm Devoy from PHD EMEA reminded us recently here.

 

Key points:

  • David Trott explains the origin of driving production efficiency – and explains its role in the mass production of identical products
  • Advertising is not one of those. Every campaign has different objectives requiring different solutions
  • Yet, our creative industry has embraced some of the principles of mass-production efficiencies
  • That’s okay, says Trott, as long as the ads don’t have to do any more than just fill up space and they don’t have to achieve any sort of business result

My Takeout

This is particularly true in media. We spend too much time discussing efficiency. This is often procurement-led, or in the competitiveness of pitching to drive price down. In these instances, little or no consideration is given to the role media plays in business results.

It has been proven that genuine innovation and strategy in the media space can drive disproportionate sales growth. However, that may (and often does) come at a premium for a specific media property or execution.

For example, marketing science has proven many times over that one of the most effective ways to grow a brand is by targeting its non- and light-users. Basic Ehrenberg-Bass stuff, embraced by many large and sophisticated advertisers.

Yet, at the coalface, a media trader is having to make the following choices: Do I buy the next cheapest spot, or the one that targets a non-user? More often than not, they are not the same spot.

In too many client/agency arrangements the agency (either by procurement or brought upon themselves) is encouraging the trader to buy the cheapest one. Because that is how they have been incentivised - by procurement and by auditors.

Don’t believe me? Next time you’re asked to submit a media pricing exercise in a live pitch, tell the client procurement team that the reason you are 15 per cent off the pace is because your analysis has proven that is the cost of targeting the right audiences in order to best grow the brand – show them all of the imperial evidence you can to demonstrate your point.

Try the same thing when an auditor tells you that delivery is 10 per cent worse than the pool on cost, even though your client’s sales targets may be 15 per cent up on market performance.

One of two things may happen. The marketing team will intervene and convince procurement of the virtues behind the approach. Or, nothing changes, and you’ll lose the pitch/account because you were perceived to be too expensive, or in the auditor example, maintain absolute cost focus in pursuit of your client’s contract to the detriment of their goals and objectives.

The good news is - it isn’t always a case of either/or. Many advertisers sit in this space, striking a healthy balance between effective and efficient media.

But for the heavy cost-cutters, I ask you to consider when you may (or already have) hit the point of cutting into your business growth potential. Because at that point, you’ve entered the territory that is commonly referred to as ‘the race to the bottom’.

Let’s go. What do you think?

Industry Contributor

Mark Coad, CEO
PHD Australia

Mark Coad is CEO of PHD Australia, a role he has held since joining the business in 2012.

He has 28 years of experience having commenced his career in advertising and media in 1991 immediately after university. He has a Bachelor of Business majoring in Quantitative Analysis and Applied Economics.

PHD is owned by the Omnicom Group, and Mark has worked with that group for the last 15 years. Firstly as CEO of OMD – where he oversaw the growth of that business by $200m+ in client billings. The agency won multiple awards for its achievements – with several agency of the year awards, client campaign awards and employer of choice awards.

His time at PHD has seen considerable growth of that business. It is now nearly 3 times the size it was 6 years ago – attracting clients such as Unilever, VW Group, ANZ Bank and Virgin Australia. It has won multiple awards including agency of the year, employer of choice and campaign awards.

In addition to his role – he is a Board Director of the Melbourne International Comedy Festival, Board Member of the Commando Welfare Trust and a Board Member of the Media Federation of Australia.

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