The rise of short-termism: New report highlights misspend by advertisers

From Irish Times:

A new report finds the ad industry has over-optimised for short term performance at the expense of building brand, authors Eva Zawol and Kelsey Tyson tell Inside Marketing’s Dave Winterlich

If you’ve instinctively felt that attention doesn’t just drive clicks and short-term uplift, it builds long-term brand equity and sales growth, congratulations: you were right.

A new report from Dentsu, in partnership with data giant Kantar and attention expert Lumen, has, for the first time, quantified how next-gen video platforms deliver real business outcomes.

Using a new framework for growth in the algorithmic era, plus one of the industry’s largest video effectiveness data sets – 40,000 respondents from the US and UK – The Brand Reset brings into focus how digital video drives multiyear brand growth.

It not only shines a spotlight on how voluntary attention outperforms forced exposure, but looks at the evolving role of connected TV versus linear TV, and figures out how to best balance brand and performance to unlock growth.

“The biggest thing we wanted to address with the [report] is the imbalance of investment between brand and performance advertising,” says Eva Zawol, Dentsu’s global partnership director, based in London.

“We’ve been living in this performance marketing era for around 10 to 15 years, and over this time, brands have started to invest more in performance marketing, to the detriment of brand, taking budgets out of brand and fuelling bottom funnel activities.”

It’s why all the money has gone to search and feed activity, clicks and conversions, “everything that stands for short-termism,” she says. “We got a little bit lost because if we continuously invest in short-termism, we’re not fuelling brand, and the power of brand is that it fuels the entire ecosystem and impacts the bottom line. So what we really wanted to do is reset brands into revisiting that investment imbalance.”

The best way to do that was to focus on video. “The majority of clients, when they think of investing in brand they think video because it continues to sit at the heart of effectiveness. We needed to figure out the best methodology for testing these video assets,” she says. “So we brought together two big powerhouses, Lumen for attention and eye tracking measurement, and Kantar, which has decades of experience in brand tracking and combining those brand equity measures – brand power with financial performance.”

The pair then looked across the modern video ecosystem, not just traditional linear TV.

“Linear was included as the benchmark because historically it has been the gold standard for brand building,” says Kelsey Tyson, vice president global partnerships at Dentsu, based in the US city of Atlanta. “But we also looked at connected TV, streaming environments, social video, short-form video and broader video sharing platforms. And within those environments, we tested both skippable and non-skippable formats.”

The aim was to look at different types of ad experiences, where people either have to watch, or where creative advertising has to earn their attention.

“The last bit that we hit on, which I think is super important, is that it was brand building creative only, so no promotional, no ‘buy now’, no call to action. These were assets designed to really build memory and emotion and long-term impact,” says Tyson.

It’s a downward spiral that causes brand equity to weaken over time, not least because people become less familiar with your brand, less emotionally connected to it and ultimately less likely to choose it. The irony is that this makes performance marketing harder and more expensive in the end. “Because you’re trying to convert people who don’t already have a strong reason to care about or know your brand,” says Tyson.

The problem is that while performance marketing may look really efficient in the short term, “the brand demand weakens and performance just gets more expensive and then brands double down even harder on those short-term tactics. What The Brand Reset is trying to do is break that cycle,” she says. “It’s not about walking away from performance. It’s about rebuilding the brand equity that makes performance work harder.”

Part of the challenge is that algorithms are serving us all increasingly personalised and automated advertising experiences. “But measurement hasn’t fully kept up,” she says. “While the ecosystem has evolved really quickly, planning and measurement is still catching up and that’s the gap we’re trying to fill with The Brand Reset: moving the conversation beyond whether an ad was just served or viewable, but if someone paid attention, whether that shifted brand equity, and what that means from a sales impact perspective, not just for the short term, but for the long term as well,” she says.

While linear TV is well studied, digital environments have not been sufficiently researched for their brand building capabilities.

“What we found is that, yes, we can build brands with all types of video formats, on big screens, on small screens, with skippable and non-skippable ads. It’s just that every format, depending on the platform, will deliver different results. The name of the game is to understand what they deliver, which objectives they deliver the best on, and to pull all these different levers in our planning system, to then design and craft the most optimal media plan,” says Zawol.

Among the findings was the fact that, while we instinctively feel skippable advertising is weaker, in fact, when people do choose to watch something, that attention can be really valuable.

“Forced attention and voluntary attention are not the same thing. Non skip formats give you that guaranteed exposure, but doesn’t always mean someone is fully visually engaged,” says Tyson. “With skippable formats, when someone chooses to stay, the attention is more intentional and, second by second, can actually work harder.”

It’s why good creative remains key. “Being able to keep the audience and getting them past those first two seconds is critical,” she says.

The report also identified the power of audio too. “Even when people weren’t looking at the screen, when we weren’t capturing their visual attention, they were still listening,” says Zawol.