The Productivity Crisis

Over the last half-century, data suggests that we are facing a productivity crisis. The alarming aspect of this crisis is the potential for it to worsen. But what does this mean for businesses and individuals alike?

In the 20th century, the productivity of manual workers in manufacturing saw a fifty-fold increase. This tremendous growth, known as the “Great Boom,” was expected to continue. Yet, from 1970 onwards, this boom seems to have dwindled.

The cause of this productivity crisis is complex and multifaceted. It involves various fields such as history, economics, technology, philosophy of science, manufacturing, management, sociology, investing, and innovation. Unraveling this crisis requires a granular understanding of these diverse domains.

The Role of Failure in Learning

Contrary to popular belief, failure is not always a negative outcome. In fact, in many situations, failure can provide invaluable lessons that can help improve future performance. However, the process of learning from failure is not as straightforward as it appears.

Analyzing failure requires a shift from conventional thinking. Organizations need to move away from a culture of blame and towards a culture that values and learns from failure. This is where the concept of “intelligent failures” comes into play.

Intelligent Failures: A Paradigm Shift

The term “intelligent failures” refers to failures that provide significant insights and knowledge. These failures often result from thoughtful experimentation in uncharted territories. In such cases, the failure itself is not a setback but a source of learning and innovation.

Organizations that can generate intelligent failures and learn from them are likely to succeed. Those that get stuck in the blame game will invariably struggle. The key is to find a balance between maintaining high standards of performance and fostering an environment that encourages learning from failures.

A Spectrum of Reasons for Failure, Or Mistakes In Marketing

Failures in an organization can occur due to an array of reasons. These can range from deliberate deviation to thoughtful experimentation. It’s important to understand that not all failures are blameworthy. Many failures are the result of complex, interrelated factors that may be beyond an individual’s control.

Mistake 1: Short-termism

The focus on short-term, conversion-based Key Performance Indicators (KPIs) often overshadows the understanding of what drives sustained business growth. This approach risks losing sight of long-term goals and objectives.

Challenging Short-termism: Outcome Obsession

One of the most prevalent mistakes in marketing measurement is the focus on short-term, conversion-based Key Performance Indicators (KPIs) at the expense of understanding long-term business growth. When marketers prioritize immediate results over sustained success, they risk missing out on valuable insights and opportunities.

To challenge short-termism, marketers must align media and communication objectives with broader marketing and business goals. It is essential to express objectives and KPIs in terms of effectiveness, not just efficiency. By being outcome-obsessed, we can set media objectives that are commercially accountable and optimize towards KPIs that have the strongest links to business outcomes.

Mistake 2: Misattribution

Another common pitfall is attributing sales to the final click, without considering organic conversions or other brand touchpoints throughout the consumer journey.

Challenging Misattribution: Incrementality Investment

Another common mistake in marketing measurement is misattribution, specifically attributing sales solely to the final click without considering the impact of other touchpoints throughout the consumer journey. This narrow view fails to capture the full influence of media and brand interactions on consumer behavior.

To challenge misattribution, we need to focus on measuring the incremental impact that media has on consumer behavior. Instead of taking credit for sales that would have happened anyway, we should seek to understand the contribution of media touchpoints throughout the entire consumer journey. By being invested in incrementality, we can gain a more accurate understanding of the true impact of our marketing efforts.

Mistake 3: Bad Science

Practices like sampling error, poor replicability, improper representation, and overreliance on claimed data are prevalent within the media industry.

Challenging Bad Science: Robust and Repeatable Solutions

The media industry is plagued by poor research practices, including sampling errors, improper representation, and overreliance on claimed data. These practices undermine the credibility and accuracy of measurement efforts, leading to misleading insights and ineffective decision-making.

To challenge bad science, measurement solutions must adhere to scientific best practices. Research sample sizes should be representative and statistically significant, ensuring reliable results. Moreover, measurement solutions should aim to measure actual consumer behavior, rather than relying solely on self-reported data. By developing robust and repeatable measurement solutions, we can ensure the integrity and accuracy of our insights.

Mistake 4: Retrospection

Often, measurement solutions fail to extract actionable insights that can inform and optimize future activity.

Challenging Retrospection: Future Focus

One of the most frustrating mistakes in marketing measurement is the failure to extract actionable insights that inform future strategies and optimizations. Many measurement solutions focus solely on reporting historical data, neglecting the opportunity to learn and improve for future campaigns.

To challenge retrospection, we need to adopt a future-focused approach to measurement. Throughout a campaign, it is crucial to have real-time dashboards that monitor performance and allow for immediate optimization. Post-campaign, the results should be used to create benchmarks and inform future strategies. By integrating campaign effectiveness data into planning systems, we can continuously learn and optimize our marketing efforts.

Building a Learning Culture

Building a culture that promotes learning from failures is a leadership responsibility. Leaders need to encourage openness, patient inquiry, and tolerance for ambiguity. They should motivate their teams to go beyond superficial reasons for failures and delve into the root causes. This will ensure that the correct lessons are learned, and the right remedies are implemented.

Promoting Experimentation

Promoting experimentation is a critical aspect of generating intelligent failures. Organizations need to recognize that failure is a necessary by-product of experimentation. They need to conduct experiments, not with the aim of immediate success, but with the goal of learning.

Implementing the Challenges: A Framework for Success

To operationalize these beliefs, we need a suite of frameworks that help us audit a client’s measurement capabilities, ensure a comprehensive measurement infrastructure, and identify new opportunities to test and learn. We believe that disproportionate growth comes from the power of imaginative leaps. Therefore, it’s critical that we utilize best-practice measurement to ensure that our inspiring work is also commercially accountable.

By challenging these common industry mistakes, we reinforce the importance of measurement in marketing. The ultimate goal is to ensure that our measurement practices are robust, reliable, and capable of driving business growth, now and in the future. It’s about being outcome-obsessed, investing in incrementality, adhering to scientific best practices, and focusing on the future, all while continuously learning and optimizing.

In conclusion, effective marketing measurement is crucial for success in today’s competitive landscape. By challenging short-termism, misattribution, bad science, and retrospection, we can optimize our measurement practices and make informed decisions that drive tangible results. By adopting a future-focused approach and utilizing comprehensive measurement frameworks, we can ensure the effectiveness and accountability of our marketing efforts.

References & Further Reading

• We’re in a productivity crisis, according to 52 years of data. Things could get really bad.
• Strategies for Learning from Failure