The myth of the 50% rule revisited

It's worse than we thought

In last week’s blog we took aim at the hackneyed old quote that “half my advertising budget is wasted; the trouble is, I don’t know which half.”

The post generated a lot of debate. Perhaps the most interesting comment was the one noting that googling the phrase “half my advertising is wasted” gets you over 21m results. Even in the digital era it seems there’s still a lot of waste out there!

In fact, a bit of digging has suggested the situation might be even worse than we first thought.

Back in the noughties, US researchers Rex Briggs and Greg Stuart examined the marketing spend of 30 major corporations, accounting for over $1bn dollars of investment. They discovered that the spend in question had an average effectiveness rate of 37%, suggesting that in fact two-thirds of comms investment is wasted.

More recently, Ehrenberg Bass have published data suggesting that around 86% of all ads are either ignored completely or, if noticed, not connected to the brand sponsoring the message. In other words: 9 out of 10 ads are, literally, a waste of money.

It gets worse - there’s growing evidence to suggest some ads are actually harmful to brand growth. A recent survey quoted in Marketing Week threw up the alarming stat that 95% of consumers say that intrusive pop-up ads make them less likely to buy the brand being advertised.

Sifting through the stats it’s hard to avoid the conclusion that advertising continues to involve huge amounts of waste. This is a bleak state of affairs for the industry to find itself in. But, contrary to the famous quote, we do have the tools to understand that waste and to take steps to avoid it.

Too many ads aren’t good enough, and studies by WARC and others have consistently shown why. Briefs are written without a strong foundation in consumer research, and campaigns are developed which either aren’t noticed by or don’t connect with their target audience. In short, the insight is lacking.

“There’s no time to do research” is probably one of the most familiar lines we hear as an agency. But time to insight has never been quicker. Using our FastQual tool, for instance, we’re able to give clients rich feedback on campaign ideas within just a few days. Quant can be done even quicker.

No research is perfect. But the alternative is far worse. With an industry failure rate of 86%, it’s no longer good enough to exclude the customer from the comms development process. As Briggs and Stuart noted all those years ago, “Most waste comes from a poor understanding of consumer motivations coupled with inaccurate messaging”.