What you need to know:

• Oxford University's Associate Professor Felipe Thomaz was a runaway Mi3 hit last year with a peer-reviewed paper that smashes the economics and relevance of audience reach. His analysis – based on more than 1,000 campaigns via Kantar and Wavemaker data – finds blunt use of reach will not deliver business outcomes, because not all reach is equal.
• Business outcomes was all the talk at the Future of TV Advertising last week, with industry backing the build of a real-time dashboard via Adgile to map and measure impressions delivered to hard results close to real-time. Thomaz thinks it’s a start but warns industry risks falling into a “trap” of short-term skew, essentially applying performance metrics to a brand channel.
• “That worries me,” per Thomaz. “We know from decades of existing research that the long-term impact of advertising is twice the short-term impact of advertising.”
• But that doesn’t mean industry shouldn’t build it.
• Per Thomaz, “It's definitely the right path, and we can do this, but we cannot stop there. This is low hanging fruit. You start there, start measuring and say, ‘look, I'm getting outcomes’ … But you cannot ignore the fact that the future exists.” However, he thinks if industry builds it – and keeps building – it could pay off. “If you're eating low hanging fruit and everybody else is eating off the floor, you're golden.”
• Meanwhile Thomaz thinks agencies could be the key to cracking the code on moving beyond reach and into outcomes because they have enough visibility on pool of clients and, potentially, their data. He says one big global brand that has in-housed most of its media is finding exactly the same thing as his paper suggests – and making major gains as a result.
• Thomaz says that code is all outlined in his paper – and any agency can lift it. “They literally can just go steal the code and run.”
• Now he’s working on another paper – aiming to prove the impact of different media channels and beyond – including touchpoints like “customer service and salespeople and their effectiveness in driving different outcomes” within different categories.
• “This is interesting for the people that own those channels, because suddenly they're not competing just on audience size – they're competing on value derived from that audience,” says Thomaz. “That is what media owners are going to be really interested in: Can I charge more for an impression on my platform for this client because they'll get 6x the return [versus another channel].”
• There’s more nuance and depth in the podcast. Get the full download here.

Oxford University's Associate Professor Felipe Thomaz’s breakdown of the implications of his peer-reviewed paper for reach-based media planning is one of Mi3’s highest read stories of all time – underlining just how deeply his findings run for pretty much the entire industry.

The crux of the research is that optimising media for reach alone no longer works, and used bluntly will almost always deliver at best marginal business outcomes – despite campaigns being backed with serious spend.

Thomaz’s analysis of more than 1,000 campaigns using Wavemaker and Kantar data found only one per cent of campaigns drove double-digit business growth. The average was sub-two per cent, or “really mediocre outcomes”, as he put it. That’s because there are distinct category nuances that apply to each channel – and because all reach is not equal.

Either way, per Thomaz, “I don't know a single company that makes any profit out of just reaching people – you need a behaviour, you need them to go and do something about it … you need an ‘and so what?’”

Which opens up a major opportunity for media owners that can prove the value of their channel to deliver specific business ‘so whats’, i.e. outcomes, for specific categories better than their rivals.

The question for the media industry is what to do about that – and how to prove it – something Australia’s TV businesses might just be aligning on.

At last week’s Future of TV Advertising event in Sydney, TV networks, streamers and media agencies gave the green light – in principal – to building a measurement platform that maps impressions to outcomes in near real-time, and getting it built quickly.

The mooted system and dashboard would use data collected via ACR, or automated content recognition, via Adgile Media, which essentially recognises and records in aggregate the content people watch on screens, including ads – analysis it and then, per the company, maps those ads to "outcomes like sales, website visits, app downloads and assigns credit at the placement level in real-time".

Adgile’s Craig Service said the technology would put TV and streamers on an equal footing with the likes of Google, Meta and Amazon in giving real-time results data to marketers under increasing pressure to show their spend is driving immediate outcomes – hence ploughing more money into those walled gardens. Per Service: “All of what they're currently doing is available for TV.”

Can vs. should

Associate Professor Thomaz, however, thinks TV networks trying to compete with platforms on short-term performance metrics might be doing themselves a disservice. His data analysis suggests TV is the best overall channel – though not necessarily the best at everything – but that much of its growth delivery happens over time. That won’t show up in a real-time dashboard, which risks underplaying its role and value.

TV is “expensive … it eats a lot of budget. But the upside is it actually tends to move every goal, almost uniquely. A lot of other media channels have things that they're really excellent at, but they will give up functionality in other domains, other mindset metrics – they'll be really good at association [for example], but really rubbish at everything else … So TV is a really solid bet,” says Thomaz.  

“The problem of immediate measurement and the low hanging fruit in measuring business outcomes is that we're going to look at the short-term business consequences of that advertising. We’re going to see immediate things. So it's very much falling into the trap of search and click-throughs or some sort of attribution that is simple and really, really short-term. If you turn your planning specifically into that, you've fallen back right into performance marketing,” warns Thomaz.

“You have just changed your entire strategic ecosystem into a short-term, myopic media and marketing planner, which we know is value destroying.

“We know from decades of existing research and outcomes that the long-term impact of advertising is twice the short-term impact of advertising. So if you're optimising everything for just what happens now and you ignore the multiple that you're building for a future consequence, that worries me,” he says.

But that doesn’t mean the TV industry shouldn’t build it – and research from Thinkbox in the UK underlines that such a system would definitely show TV drives fairly strong some short-term impacts (linear TV was second only to pay per click in driving outcomes in under three months, framed as 'advertising-driven profits' in Thinkbox's study, underpinned by WPP data).

“It's definitely the right path, and we can do this, but we cannot stop there,” says Thomaz.

“This is low hanging fruit. You start there, you start measuring and say, ‘Look, I'm getting outcomes, I'm measuring things,’ and that's better than not measuring them. But you cannot ignore the fact that the future exists.”

More broadly – and applicable to marketers, agencies and media moving beyond reach-based planning – Thomaz says the same rules apply: take a positive step.

“You don't have to boil the ocean and solve all of this in the same time. You have to do this slightly better than the field, and that's all you need to get there first.

“If you're eating low hanging fruit and everybody else is eating off the floor, you're golden.”

Agencies: steal code, win

Beyond TV aiming to defend its revenues from the three big platforms eating half a trillion dollars of global ad budgets annually, Thomaz thinks agencies are best placed to help marketers take the first step in moving from reach to business outcomes.

That’s because the have the breadth of clients and potentially access to their data to map planning and delivery to how all channels individually and collectively moved the needle for specific goals.

Whereas platforms and media owners can only see the data how brands’ campaigns fared within their own channel and not how channel combinations combined to deliver the actual outcome.

“[Media owners] are blind by the narrowness of their application, which is just the product they sell. So they can't solve this problem,” says Thomaz.

Brands themselves do have hard data that can be correlated to outcomes, but Thomaz says they can be blinkered, do too little experimentation and stick with what they know  – or “single lane-ing it”, per Thomaz, because advertising is expensive and experimenting with hard won budgets can be seen as too risky.

Hence urging agencies to literally lift the code laid out within the Beyond the Pair paper peer-reviewed and published late last year in the Journal of Marketing.

“All of the approach of how to do exactly what we have done is in the paper,” he says, and with some smart data people set to the task, “you can do this yourself”.

“They can literally just steal the code and run. It's not a secret. It's not something I'm selling. It's literally in the paper. Most all of that code was written by my colleague, Jason Bell who's a brilliant econometrician. So it is there and it’s available.”

“What the code creates is an estimation of the archetypes – the combinations of channels – and evaluates their performance across goals and it can be split by category,” says Thomaz.

“The agency world and media planners are the only ones that reasonably have a play at the data availability, because they have diversity of clients, diversity of applications, diversity of goals.

“But in my experience – not speaking about one specific agency ­– they also tend to just be doing what they're told. So I think repeatedly they were told by clients, ‘we want reach. You're being measured on reach’.

“I think this is really bad for the ecosystem, because the value of the strategic media planner is tanked on the basis that you've told them to do a thing that doesn't work, and they're being measured on a thing that doesn't work. And then as media returns come back, and [the client] is like, ‘well, this is not really fantastic. What am I paying you for?’ [The agency response is] ‘Well, you asked me to stop doing my job and think about your specifics and your goals’,” says Thomaz.

“And most clients, most brands, when I look at the data, they measure every outcome as if every campaign will drive literally everything. So there's no intentionality behind it – it's shooting stuff against the wall. That's harmful, and it under-leverages a lot of learnings.”

Which means brands have to get their head around moving beyond reach – and allow their agencies to lift the code and run with it.

In-houser moving

Thomaz says he knows of one big brand owner that is doing exactly that: “A very large company that had the assets and capabilities and personnel to bring some of this thinking in-house.” But it can only take that approach because it has a “phenomenal data practice” in-house as well as media in-house, and sophisticated measurement.”

“What they got from my paper was validation – it was already doing this,” per Thomaz, who told them “’We might not be using the same language of functionality and things inside of the media, but your media planning is really close to what we see as ideal’.”

Beyond that example, he suggests there is plenty of scope for agencies to be among the vanguard of early mover advantage takers.

Where to start

In short: “Planning stops being a function of reach alone, and it starts being a function of what you intend to do combined with the efficiency argument of reach.”

Key to remember is that, bar consumer packaged goods, where “TV, Facebook and outdoor is almost a single bullet,” per Thomaz, for every other category those blanket assumptions and simple reach combinations don’t really drive outcomes – or almost universally underperform for the outlay.

“Reach is a bit of a trap if used by itself, and there's tonnes of money to be made by a better allocation,” per Thomaz.

“The combinations we’ve been using so far in media planning – especially those that prioritise audience construction and reach – the scatter gun sort of approach, [i.e.] a little bit of everything – just is very, very low performing compared to tonnes of alternatives.”

He thinks brands and planners would be better off focusing on a single objective or outcome – and doing it well – than trying to do everything at once, “and then each time you do one of those, you're going to get much greater returns”.

But overall, he says it’s a case of recognising that blunt reach models are flawed and doing something about it one step at a time.

“How do I change this? How do I adapt and change my thinking so that it is more appropriate to driving my business forward? These things are not all equal – start planning that way and thinking that way and strategising that way, because there's going to be money on the table.

“You don't need to solve all of these problems at once … I call it the n+1 [approach] – you have to be one step ahead of your competitor, and that's it.”

Next: a million touchpoints

Thomaz is now working on another paper – aiming to prove the impact of different media channels and beyond – including touchpoints like “customer service and salespeople and their effectiveness in driving different outcomes” within different categories.

“That's the next stage of saying, ‘I know these are all different, I know they combine in different ways, and each one is going to have a sweet spot for different people in delivering different business goals.’

“Now it's time to start enumerating those and saying, ‘this one really drives this, this one drives that’ and trying to flesh out this theory, which right now has been in the dark because everybody has been acting as if these things are all identical. Now we know they're not, so it takes time to start proving that they're different.”

But if he can, Thomaz thinks it could change the economics of media.

“This is interesting for everybody involved, the people that own those channels, because suddenly they're not competing just on audience size. They're competing on value derived from that audience.”

Thomaz underlines that reach and efficiency remains important – “you still need that layer because your cost is going to be associated with that … but you might get a premium if actually that reach is more valuable”, he says.

“That is what media owners are going to be really interested in. Can I charge more for an impression on my platform for this client? Because they'll get 6x the return of somebody else.”

There’s much more nuance and depth in the podcast. Get the full download here.