With consumers bombarded by advertisements across multiple platforms every day, businesses face increasing competition for attention. But as advertisers invest in sophisticated tools to measure clicks, impressions and conversions, an important question remains: are they measuring what actually matters?

Tim Woodsmith, director of strategy at Perth advertising agency Rare, said too many marketers confused efficiency with effectiveness.

He said pressure within organisations to justify advertising spending had encouraged reliance on easily accessible figures such as click-through rates (CTR), impressions and cost per lead.

“They’re often, to me, vanity metrics,” Mr Woodsmith said.

“They tell you nothing about long-term business health.”

Mr Woodsmith said more meaningful indicators required patience and investment in long-term tracking. These included consumer sentiment, trust and brand salience – meaning how readily a brand came to mind when someone was making a purchasing decision.

But even an increase in sales did not necessarily prove an advertising campaign had been successful.

Mr Woodsmith said measuring effectiveness required establishing a baseline, tracking changes in consumer behaviour and accounting for external influences. For example, did sales increase because of the campaign, or because the business reduced its prices by 20 per cent?

Omnicom Oceania WA CEO Adam Marshall said advertisers needed to consider whether the attention their campaigns attracted translated into greater engagement and brand affinity.

“Marketing needs to be able to prove its contribution to growth, so having the right measurement framework in place is essential,” he said.

“Metrics like CTR and impressions are only signposts – they are not the goal.”

Mr Woodsmith said advertisers sometimes confused reach – the number of people exposed to advertising – with frequency, or how often the same audience saw it.

He said repeatedly targeting a small audience with the same advertisement could cause fatigue, feel intrusive and damage the brand.

Mr Marshall said personal recommendations could be more influential than paid advertising when consumers were making purchasing decisions.

“Advertising can be a relatively weak force, but a recommendation from a trusted peer is incredibly valuable,” he said.

Mr Marshall said modern advertising strategies combined paid advertising with word of mouth, reviews and recommendations, allowing consumers themselves to help promote a brand.

He said some of this activity formed part of what the industry called ‘shared media’, which worked alongside paid, owned and earned media.

Mr Woodsmith pointed to the 60/40 principle, drawn from research by advertising effectiveness specialists Les Binet and Peter Field. The guideline suggests putting about 60 per cent of marketing investment into long-term brand building and 40 per cent into short-term sales activation, although the balance varies with the business and its objectives.

Mr Marshall said good strategy depended on understanding the brand, the product and the business objectives.

He said storytelling, emotion, relevance and brand recognition remained central to effective advertising, no matter the technology.

“The fundamentals of how humans react to advertising haven’t changed,” he said.

Mr Woodsmith, who worked on the NRMA Insurance account at The Monkeys (now Droga5) from 2018 to 2024, said the insurer faced intense price competition and pressure to deliver immediate results.

He said the industry relied heavily on promotional discounts, search advertising and immediate conversions, while longer-term brand preference was being eroded. The short-term figures suggested efficiency, but NRMA was under pressure from lower-cost competitors.

In March 2018, NRMA Insurance launched its Help Is Who We Are campaign, shifting towards sustained storytelling about Australians helping one another.

In its Australia 100 2021 report, Brand Finance ranked NRMA Insurance as the third-strongest Australian brand. The Monkeys, the agency responsible for the campaign, won the Grand Effie at the 2021 Australian Effie Awards for its entry, How reinventing ‘HELP’ added record value to the NRMA Insurance brand.

For businesses competing for customers today, the question is not simply whether an advertisement produces a click, but whether the investment is helping build a brand consumers will choose tomorrow.

Author Bio

Fleur Mayne is a Creative and Professional Writing student at Edith Cowan University who enjoys journalism, research and storytelling. She is drawn to stories that question accepted narratives and uncover what lies beneath the surface.