The time is now for brands to purge their advertising supply chain

The effects of the global supply chain problems are still being felt as 2022 draws to a close. The production of everything from automobiles to computer chips is being hampered by these problems. A trickle-down effect in ad spending occurs every time a supply chain slowdown affects a particular industry.

However, the issues with the marketing supply chain are not new and receive little media attention. Up to 50% of the creative work produced for international advertisers never appears in any market. Do you believe that the manufacturing sector would accept even 2% of production waste? It seems improbable.

But in the advertising industry, neither brands nor agencies have access to information about how products are distributed from production to markets all over the world. Unbelievably, waste in the double digits is standard. The advertising supply chain is so disjointed and disjointed—creating, producing, adapting, operating, and measuring what has worked—that it hardly merits the name supply chain. Our world is shattered.

At this time, when every marketing dollar is being scrutinised, ROI is more crucial than ever for CMOs. Up until now, media spending has been the primary focus of ROI measurement rather than the upstream elements. The supply chain continues to be so opaque, resulting in too much work being wasted, because of the gap between asset creation and media. What better time than right now to examine the marketing and creative supply chain and develop a more thorough, useful ROI measure?

Bridging the gap

A global brand would once hire a single agency to handle everything, from creative to production to media planning and buying, back in what feels like the last millennium. Though expensive and unfinished, it was simple to make the connections.

The marketing universe has grown over the past 20 years in accordance with the laws of the real universe, where things appear to be getting further and further apart. Similar to Hubble's Law, which states that planets move away from one another more quickly the farther apart they are from one another. Dynamic creative optimisation, programmatic, and cutting-edge technology, to name a few, feel as though they are advancing further and further away from one another in today's digital world.

The marketing supply chain now has many disconnects due to the separation of creative and media, as well as the growth of specialised agencies that manage their own portions of the workflow. Therefore, as the marketing ecosystem has grown, it has become more challenging to link the dots between planning, production, and results.

When it comes to media buying and planning, nobody will ever be able to put the genie back in the bottle. The truth is that those times have passed, despite how much the romantics may long for them. But really, there's no reason for us to return. The advertising supply chain's components can all still be found; we just need to fill in the gaps.

Using data to address supply chain issues

Today, brands need more than just an analysis of media performance when calculating ROI. Brands need to be aware of the creative they created, how it was modified for various markets and audiences, and the results that creative produced.

None of this implies that companies don't keep track of their production costs. Obviously, they do. However, they are not delving into the specifics; instead, they are looking at two sizable buckets: production and media spending. For the majority of brands, there is no connection, and to go back to Hubble's Law, it seems like the two categories are moving further and further apart.

As they say, the devil is in the details. The ROI measurements for each campaign will vary greatly if a brand develops 100 campaigns in a single year. What is created and produced, what airs and what doesn't, as well as media costs, will determine this. Without closely inspecting the components, neither a brand nor an agency can accurately calculate the ROI.

The genuine magic happens there. When you break things down at the campaign level, the insights are put to use. You can gauge how far the creative goes if you take things a step further and view them from the perspective of the individual assets. It's time to fix anything that isn't functioning properly in the supply chain.

The thing about ROI is that it's not just a test grade at the end. It's a useful indicator, and CMOs should thoroughly analyse their ROI to determine their costs and, as necessary, modify their marketing supply chain.

Despite all the talk in the industry about the "real-time" flow of campaign data, production data actually moves more slowly. One is that production begins a long time before a campaign actually begins. An advertisement's initial pre-production creative investment may have taken place a full year before it reached the first consumer.

The biggest obstacle for advertisers may be time, but to truly measure ROI, brands and their agencies must eliminate any gaps. And there are many disconnects in the contemporary advertising industry that need to be fixed. From production to talent payments/rights to media, ROI-focused brands need to coordinate these investments in order to have visibility and be able to focus on what works.