Entrenching respect for advertising

Naomi Shepherd, head of brand, Facebook Australia & New Zealand
By Naomi Shepherd, head of brand, Facebook Australia & New Zealand | 13 July 2017
Naomi Shepherd

Let’s not leave it at a mere call for transparency. Australia’s marketers, agencies and advertising outlets must combine their voices to demand it. This was the call from last month's AdNews Tackling Transparency event.

The industry is tipped to grow close to $20 billion in the next few years. So, it’s imperative that we stand up to be counted. And for that counting to mean something.

Currently advocates for transparency are infatuated with terms that mean very little outside of our industry. Viewability, impressions, opportunities to see; or any of the jargon we rely on to mark advertising; are unintelligible to executives and board members. Important to us, but incoherent to those that set businesses’ budgets.

They treat advertising as a discretionary cost. Viewing it as an opportunity for cuts, to aid the bottom line. An article in the Economist lays this reality bare, reporting on the down-turn in advertising spend during the global financial crisis.

The article is eight years old. While it does not mention the word ‘transparency’, it does report “that clients are becoming far more demanding”. And that “they increasingly want evidence that their expenditure is worthwhile”.

As an industry, of course we believe that advertising is worthwhile. And it is our obligation to prove it in measures that are clear and understandable to those who preside over budgets.

I know we can, because this reality exists.

Take Mon Purse as an example. This business grew 8000% in 18 months, and is on track to deliver $20 million in handbag and luxury leather goods sales. The management team credits Facebook and Instagram for much of its sales, ascribing the return on investment of some of its advertising campaigns by a factor of 100. It currently spends approx 80% of its budgets with Facebook and Instagram and also attributes much of its brand growth to the strength of the Instagram platform.

Nourished Life is another Australian success, delivering $20 million in sales from its beginnings as a $100 start-up. Again, this business not only relies on advertising, but insists on tracking the return that its advertising on Facebook delivers, in terms of sales.

Mon Purse offers up made-to-order leather bags

There are many more examples from the booming new business sector. Not because success is exclusive to these businesses, but because they have an acute sensitivity to expenditure. They don’t spend based on budget allocations, but in terms of what delivers the best return for business growth.

Another example comes from the bigger end of town.

Tourism New Zealand’s achievements shine a brighter light on what can be accomplished by seeking transparency on advertising’s contribution to growth.

It credits smart marketing for the success of Tourism New Zealand’s shoulder season strategy. The organisation changed its focus two years ago in response to the pattern of arrivals that boomed over summer before dropping away again. It now invests its entire marketing budget to encourage people to come to New Zealand in the shoulder seasons, to even the spread of visitation.

Measuring the outcome of this found that holiday arrivals in the spring and autumn grew 16.1 per cent and 10.2 per cent respectively. Compared to the summer peak season holiday arrivals growth of 8.3 per cent. In addition to these findings, Tourism New Zealand also tracks and benchmarks $22 in return to the NZ economy, for every dollar spent on Facebook.

There are instances where marketers are unable, due to the nature of their businesses, to directly correlate their activity to revenue. In such cases transparency can be achieved by identifying performance indicators that qualify how campaigns are performing.

"We haven’t always got it right"

For brand marketers, for example, these should identify when and where the adverts are reaching people, and that those people are the right audience for the brand. And how those people are reacting with the campaigns.

It pays to measure that which contributes to business growth. Transparency is achieved when marketers advertise with publishers and platforms that measure effectiveness in terms of actual people. How many people were exposed to it, what people did because of it, where people encountered it, when people engaged with it, and why. Transparency of advertising effectiveness must be based on real people, as they are the ones that bring more business.

At Facebook, we know that the demand for measurement and transparency must be met responsibly. And we haven’t always got it right. We publish bugs we identify on our platform at Facebook’s Measurement FYI, which also details our undertakings with the MRC. We also lay bare the ability to quantify and qualify on our platforms with Facebook’s Blueprint training, freely available to everyone.

And for those who rely on verification of results, those arrangements are made available through third-party verifiers MOAT, Integral Ad Science and comScore, with further verification options to be available from Nielsen, DoubleVerify and Meetrics.

Transparency is a reality. It’s knowing that a marketer achieved the business outcome expected from the advertising investment. And knowing that they can credibly qualify this to companies’ management teams and boards.

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