Retail Media and the Mcnamara Fallacy

A related article to this has been published on evison.com the blog for startups. To find out more about how Mcnamara effects starting a company have a look.

“The first step is to measure whatever can be easily measured. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that what can’t be easily measured really doesn’t exit. This is suicide.”

The McNamara Fallacy is named after the Robert McNamara, the US Secretary of Defence in the 1960s who was obsessed with quantifying the Vietnam War in a way that tended to ignore what was truly going on.

And Albert Einstein once said: "Not everything that counts can be counted and not everything that can be counted counts!"

In the world of marketing we have a wonderful tendency to give too much importance to that which can be easily measured but which has no value. A prime example of this is advertising recall. It has absolutely no value what so ever because whatever measure is determined no other outcome can be linked to it. (And cf The Rosser Reeves fallacy.)

Conversely, we make no attempt to measure the unmeasurable. Take something like creativity. We all know it’s essential none of us can get anywhere close to quantifying its intangible qualities. So instead, people try to convert the intangible into to the tangible most often when it comes to advertising to measuring something like engagement with advertising and likes/dislikes.

In the world of retail media we suffer from the same conundrum. Recently, I was looking at a presentation from a major supplier of in-store media in the US. Their justification for success included such measures as:

- 31% average Aided and Unaided brand recall

- 51% of ad recallers said that the ads influenced their purchase intent. (So only 16% of shopper claimed that the ads had any affect.)

- 84% of shoppers agreed that the content was a good thing to offer their customers

- 72% of shoppers said that the in-store TV has useful information about products sold in-store.

All these measures are completely vacuous. They are measured because they are measurable not because they have any significance.

Graham Thomas & Rufus Evison

To paraphrase a recent Google press-release, the Holy Grail of media measurement is to link media activity to shopper behaviour - that is sales. If Google get it for on-line media I reckon we should get it for in-store media.