Why creativity will buy you more success than money - Laurence Green, Telegraph UK

The marketing industry knows that catchy content can prove the most effective. But in the age of austerity, ad firms will have to find success with tighter budgets, writes Fallon chairman Laurence Green.

 

Fallon is the agency behind Cadbury's famous drumming gorilla.

'I know half of my advertising is wasted. The trouble is, I don't know which half." It's the most frequently quoted and commonly misattributed dictum in advertising, credited variously to Lord Leverhulme and, more reliably, to US retail magnate John Wanamaker.

Both men plied their trade at the turn of the 20th century. That the quote has endured so long in a fast-moving industry speaks to the ongoing anxiety that allegedly grips some of those who invest in advertising in order to build their business. That for all the research monies and teams dedicated to the task of establishing return on investment, the effects of advertising remain elusive, an "article of faith" among believers but unavailable for proper boardroom scrutiny.

This is a myth. The big brands and the big-brand owners know what of their advertising is working and what is not, and will rotate copy – or agencies – accordingly. Indeed, most are busy applying themselves to the new challenge of gathering feedback and calling effectiveness in real time rather than post hoc. It's a pursuit enabled not just by the new weight and granularity of data but also by casual, anecdotal inspection of the likes of Google and YouTube. And the age of austerity is, if anything, catalysing the urgency and the inventiveness with which companies track the effects of their marketing spend.

This growing sense of what works and what doesn't is not just apparent at company level. Broader clues are also emerging to inform the basis on which any company should be going about its brand-building efforts. Most recent and most extraordinary of these are new findings just released by the Institute of Practitioners in Advertising (IPA) and Thinkbox, which underscore the powerful contribution of creativity to effectiveness.

The suggestion that the creative content of your advertising might materially impact on its effectiveness is not new. But an empirical, "public" precedent was arguably first made in the IPA Effectiveness Awards competition in the early 1980s. It reported on area TV tests conducted by Beecham, whose "experiments suggest that sales effects are more responsive to differential creative than to differential weight".

It is to this gold-plated archive of proven effectiveness that the IPA has returned to investigate the contribution of creativity.

Their research analysed the correlation between the hard business performance of the 213 brands whose fortunes were thus "audited" over the past decade and their prevalence in the world's most respected creative award competitions as aggregated in The Gunn Report, adland's overarching creative bible. The IPA estimates there is only a 1-in-7,000 chance of any one, randomly selected campaign appearing in both creative and effective "halls of fame".

In fact, 18pc of IPA Effectiveness Awards winners appear in The Gunn Report roll-call of creative greatness. Such an overlap is not just telling in itself but also allows the IPA to compare the business performance of the "creatively awarded" effectiveness winners and their "non-awarded" peers. And it is here that the extraordinary returns on creative advertising are thrown up.

The authors of the report ground their findings in an analysis of "share of voice" and market share, and, more specifically, what happens when an advertiser invests in "excess share of voice". This is when they over-commit to advertising ahead of their "natural" share. Excess share of voice is a proven driver of advertising effectiveness.

This latest research concludes that non-awarded (non-creative) campaigns secure 0.5 extra share points for their paymasters for every 10 extra points of "excess share of voice". By contrast, the creatively awarded campaigns in their sample win no less than 5.7 share points of growth for every 10 extra points invested, an 11-fold increase in efficiency. Put another way, a creative campaign with the same excess share of voice as a non-creative campaign will drive twice as much share growth (and even more profit growth).

Caveats naturally abound but it is a curiosity of these times that creative agencies – perhaps unduly fearful of banging the creativity gong in these straitened times – have been more circumspect than clients in embracing this evidence.

For our clients, of course, it provides further boardroom support for what can look like whimsy: a gorilla here, a meerkat there. It will also support some recent expense claims from the south of France. The extraordinary levels of client attendance at last week's Cannes Advertising Festival, previously an agency fiefdom, suggests that many have reached the same conclusion as the IPA: that to achieve disproportionate effectiveness, one must first embrace creativity.

In a world where the best ideas are now distributed virally (and for free), this conclusion feels more right than ever.

Lurking deeper in the report is my favourite explanation of why creative content rather than budget alone drives superior returns: that a brand can buy awareness but not fame, and that fame is proven to be at the heart of the most effective advertising.

Earlier this year, Deutsche Bank published an investor note entitled "European Consumer Staples: The Importance of A&P" after analysing more than 30 large European and US companies over more than 15 years. The bank concluded that companies which increase their spend to sales ratios grow sales 30pc faster and profits 50pc quicker than their peers, that marketing spend "builds and protects the value of consumer brands", but that disclosure of these business-driving metrics to the investor community is poor.

Drawing theirs and the IPA's conclusions together, we may be able to offer an overdue rebuke to Messrs Leverhulme and/or Wanamaker. Neither half of your advertising budget is wasted, sir, but the half that you are deploying most creatively is working hardest. Now go share the good news with your investors.

Laurence Green is chairman of Fallon, the agency behind the Cadbury drumming gorilla advert.