Is it Time to Quantify Creative Content in Dollars?

By John Lindsay, Published: 15th May, 2012

For the boards of leading brands and creative agencies there are two trends that should worry some and truly inspire the others who really “get it”:

1 The lazy habit of many marketeers that continue to take short cuts in the campaign execution process by going on gut feel, and skipping pre-testing creative content per audience.
2 The pressure finance and procurement are putting ad agencies under to cut non-working spend (see AdAge article May 8th).

Both trends are understandable. Traditional methods of multivariate pre-testing of creative content are expensive, talent intensive and time consuming in a digital media universe. Companies everywhere are seeking ways to cut costs.

Many agencies do not seem to be able to counter this trend either. In 2007, marketeers gave their collective agencies a Net Promoter ScoreTM (NPS) of minus 21%. “Nothing has changed in the agency business since 2007″ declared Stefan Kolle this week, managing partner of FutureLab and visionary and publisher on market trending. “They still think that their creative is helping the brands, without ever proving the business value of their creative content.” In spite of this devastating judgment, 93% of these agencies considered themselves to be the driver of their client’s marketing success. See a review of the future of the agency business downloadable here.

This builds a strong business case for automated quantitative multivariate optimizing to insure that marketing management make better decisions more often. The utilization of such solutions satisfies two tangible business criteria:

  • Creates competitive advantage by getting enabling creative content “non-working spend” deliver bigger ROI returns on “working spend – media” which usually consumes 85% of the budget;
  • Enables giving monetary value to creative content based on the conversions in cost and/or revenue per response delivered compared to alternative creative content.

Creative by Gut Feel: Choice or chance?

It is a fact that hundreds of millions of dollars or lost due to poor creative content choices in e-mail campaigns. Recently we received a call from one CRM marketing manager with a question:
“Why should we pay for multivariate testing if during a pilot period of testing we could show that the winner performed only modestly better than the ‘control’ creative that we chose?”

A “Control Group” is a random choice based on gut feel. It is a gamble, a roll of the dice. This is the way most marketeers are doing it today. There is a rare chance you could chose a winner once in a while, but unlikely when working between 5 and 18 combinations. Gut feel is usually based on “past experience” or “the guidelines of best practices set by headquarters” or “because that is what the boss, or bosses wife has decided”. We have seen time and again that even if a test was done a week or a year ago to find out that this color or that CTA works, it is no assurance that it will work next week for that audience. It is worrying is this is the filtering process towards making a final choice of what the audience will finally see.

SunParcs case study illustrates the “cost” of choosing the wrong control creative. The control group would have generated an 830% loss of downloads when compared to the winning combination. Another B2B client, NXP, did a similar optimization on a niche campaign. The loser performed would have cost them a 75% gain without 8Seconds. A client of Return Path, an on-line clothing e-tailer in the US mid-west would have lost $75,000 in extra revenue if they had not used 8Seconds on a single mailing.

So why does senior management allow marketeers to take the risk when it is now so easy to limit the risks of bad choices? There is no longer any excuse. By integrating an automated, quantitative multivariate optimizing into every e-mail campaign business process, marketing management are buying insurance to make better decisions more often.

Non-Working Spending: Quantifying Creative

Ad agencies are under enormous pressure to optimize. In these times it is tough to defend budgets, especially creative content. However, when you can show real dollar value returns on creative, this defense becomes easier. This is where 8Seconds can help you. We recently had one CRM marketing manager of a global entertainment brand asked the question: “Was it worth spending big bucks on a celebrity sponsored creative, or rely on agency creative alone?”. Using 8Seconds he had the answer 48 hours later. The answer allowed him to set the right ratio between “non-working spend” and “working spend” within this scenario, and to effectively defend his creative content budgets with solid ROI facts.

In fact, using e-mail with quantitative RT Optimization to justify such creative campaigns for destined other channels – banner ads, bill boards, print ads, direct mail – can be an extremely fast way to poll audience responses. 8Seconds has one global consumer electronics brand that is using 8Seconds as an alternative to classic focus group ad and packaging testing which can cost over €50,000 each time and take weeks to execute. By sending out 5 to 10 variations of a message with different calls to action to a targeted selection of registered customers, within less than 48 hours they were already able to identify which creative combinations pull best – before deploying “working spend” media costs.

Creative Content Insurance: Automated Quantitative RT Optimization

Today a small number of Ad agencies and marketing managers of leading brands who get it, are leading the pack. They are already using 8Seconds to support their budgets and to maximize ROI on both non-working and working spends. For ad agencies, it means more budgets are spent on creating content that converts, and building strong bridges with CRM departments as well as traditional marcom rolls. For marketeers it means they are able to deliver higher conversions for the same spend as their competitors. For customers, they receive creative that is more compelling and relevant to their needs and desires. This is a win/win/win.

To summarize, the key benefit of using 8Seconds to get these results include:

1 Insurance – using 8Seconds enables marketing professionals to limit potential damage of choosing the worst performing creatives based on gut feel.
2 Speed – it takes minutes rather than days to execute multivariate testing. That is why clients subscribe to the 8Seconds SaaS Service and are now optimizing with on every campaign as a standard business process.
3 Waste & reliability – 8Seconds finds winners burning the fewest contacts, a big saving verses conventional multivariate techniques. This is done by using quantitative optimization technology and methodologies i.e. no choices are made without a statistically valid bases.

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