Four Drivers of Media Effectiveness

Four Drivers of Media Effectiveness

‘Whenever we find ourselves on the side of the majority, it’s time to pause and reflect.’ It’s in these moments we find that what we ‘think we think’ is often tied to ‘what we hear most often.’ Not necessarily to what is most effective.

Working with challenger brands with fewer resources (typically in the form of capital and distribution), means constantly needing to find ways to maximize outcomes from constrained inputs. For the David’s of the business world, a focus on effectiveness is the secret weapon in defeating Goliath. Never mind doing the things that are available, focus on the ones that matter.

Thankfully, that job has been made all the more easy thanks to a landmark research paper released from famed marketing consultants Les Binet and Peter Field. ‘Media In The Digital Age’ highlights evidence-based marketing science to drive profitable brand growth. It’s a manifesto. Cutting through digital crap traps and marketing myths, and shining a spotlight on what works.

In the spirit of Christmas giving, here is a crash course on the effectiveness nuggets from that research. ‘Media In The Digital Age’ looks at one specific input: how media choices impact outcomes. Like previous papers, this research tracks more than 500-for profit case studies from 2014 to 2016.

 

1. Penetration beats loyalty.

Analysis focused on the percentage of campaigns with ‘very large’ business effects (sales, market share, penetration, loyalty, profit, or price sensitivity). It revealed that only 7% of brands are growing through a loyalty strategy compared to 22% that are growing by pursuing a penetration strategy. Finding more light and non-buyers yields greater outcomes than focusing on your existing customer base.

This is largely due to the fact that ‘light buyers’ – those who know or care little about your brand – contribute the most to sales effects. There’s simply more of them. This is also the reason why brands that continually target their existing ‘fans’ on social media are missing the most important customers needed for growth: the people that aren’t ‘engaged’ with them.

 

2. Follow the Golden rule of 60/40.

The results show the optimum balance between short and long-term effectiveness. For maximum effectiveness the 60/40 rule applies. It cites that 60% of your budget should be directed toward long-term brand building activity and 40% toward short-term sales activation activities.

Brand channels are typically broad reach and emotive, such as TV (including sponsorship) online video, outdoor or even newspapers (particularly for weekend editions).

Activation channels are targeted close to point of purchase, more information led and responsive. Search, shopper or direct marketing efforts for instance. Brand building ensures we keep our brand salient in buying situations. Activation strategies help convert the equity we’ve built over time.

For effectiveness we need to ensure we balance the short and long-term agenda, which all to often can be hi-jacked by new media and promotions that place an emphasis on the short-term.

Take for instance Procter & Gamble, Unilever and Mondelez who in November admitted they are all cutting down on promotional activity in favour of a return to brand building through advertising. Irene Rosenfield, CEO Mondelez International, recently said the company is shifting its spend by investing behind its power brands and putting a bigger emphasis on advertising rather than consumer promotion.

 

3. Scale matters more than ever.

For a penetration strategy, you need scale. And scale generally translates to channels like online video, TV and outdoor. Campaigns with online video only saw a 25% increase in ‘very large business effects’. TV only campaigns saw a 33% jump. For campaigns that used by TV and online, the boost was 54%.

Like TV and online video, the business-boosting effects of using outdoor advertising appears to be growing. There was a 14% uplift in effectiveness for adding outdoor to an advertising campaign between 1998 – 2012; from 2012 – 2016 that figure has jumped to 27%!

The siren call of real-time marketing would have us believe the way to grow is to focus on existing customers with laser-like targeting of personalised 1:1 messages, rather than using boring old mass media. This simply isn’t true.

When brands grow, it’s through penetration. Acquiring a larger customer base. It’s also three times more common than growth via loyalty campaigns, therefore the best guarantee of campaign success.

The finding is unsurprising. Consider Ebiquity’s recent report (featured in AFR) that found for FMCG advertisers TV drives more revenue per dollar invested than all other channels. TV returns $1.74 per $1 invested.

 

4. If you want to grow you need excess share of voice.

The notion that ‘you don’t need paid media for growth’ is a myth. Of course if you can get enough people to share your ad you can see effectiveness but only with paid media in place. The reality is that budgets matter more than ever.

To grow, you not only need to create and place content but you also need to pay to bring it to people’s attention. And as we’ve learned, focusing simply on your existing ‘fans’ over emphasizes a small group of buyers that already know you and buy you already (loyalty). Instead focus on boosting saliency among the many light and non-buyers, otherwise you’re building the Taj Mahal in a dessert.

Having an excess share of voice (paid media) relative to your share of market is the most reliable driver of growth. But to get SOV you generally need to pay for it. For growth, brands should set their Share of Voice in excess of their Share of Market.

The proportion of growth explained by Share of Voice is increasing. In the period 1998 – 2006 it was 6%. Now, its 12%. Average share of market growth per annum for online unpaid media campaigns was 0.9% vs online paid media campaigns 2.6% points growth.

 

Binet and Field conclude:

  • Ensure a balanced perspective on long and short-term objectives. The activation/brand building pendulum has swung too far towards activation
  • To dial up brand building, opt for broad reach mediums like TV, online video and outdoor.
  • Design campaigns for long-term business effects. Research consistently shows this is best done via emotionally rich creative work that builds stronger brand memories.
  • Monitor your brands excess Share of Voice. The link to growth is getting stronger, which means great ideas need investment.