February 26, 2021
Effectiveness in marketing is simply the ability to prove that marketing has delivered on its stated objectives. Different brands respond differently to the same strategy or tactic, but there are some golden rules-of-thumb in marketing that are almost universal.
One: According to a study by Les Binet and Peter Field, for the IPA Effectiveness Awards, “Brand share of voice must exceed its share of the market if it is to grow.” Brands that invest in excess share of voice (ESOV), defined as SOV above the business’s market share, are likely to see long-term base sales growth. Therefore, invest sufficiently relative to your market share to see long-term sales growth and improved marketing effectiveness. [I]
Two: Big brands drive higher marketing return on investment (MROI). The size of the brand and the size of the market is the largest determining factor of MROI. Why? Because big brands are better known. They have higher mental (awareness) and physical (distribution) availability, which drives results more efficiently. Therefore, base your marketing objectives realistically on the brand size and size of the market.
Three: Spend more on long-term brand building than on short-term sales growth. The ‘Profit Ability’ report suggests that over half of marketing’s profit impact happens over the long term (delayed effect) and that immediate short-term effects decay quickly.[ii] Therefore, numerous landmark studies by the IPA suggest that the best split of marketing investment is 60% for long-term brand building and 40% for short terms sales activation. [iii] The ratio can vary by sector and situation, but significant brand-building investment is needed to deliver a strong brand over the long term. Brand building advertising will still drive financial performance in the short term.
Four: Work with absolute numbers, not ratios. An objective of maximizing MROI signals prioritization of marketing efficiency over marketing effectiveness, which can be achieved by simply cutting the budget. However, this focus on efficiency erodes brand equity in the long run. Instead, Marketers should focus on goals in the absolute terms, like the quantum of sales instead of MROI ratios.
Five: Creativity makes a difference. There is wide-spread evidence that creativity drives marketing effectiveness. A study by Data2Decsions found that after brand and market size, creativity is the biggest determinant of marketing profitability and more potent than other controllable marketing levers. Creative that has emotional appeal drives long-term effectiveness.[iv] Neuroscience suggests that emotional intensity is connected to memory encoding, which is crucial for long-term brand building. A P&G analysis of 300 TV ads, 85 online videos, 100 Facebook posts and 50 in-store displays showed that creative eliciting an emotional response was 8x more likely to be successful than work eliciting indifference.[v]
Six: Media reach strongly correlated with media effectiveness. Analysis of the IPA database found that campaigns that use of high reach media like TV, Outdoor and Radio were much more likely to generate significant business effects than those that did not.[vi] The 2018 Profit Ability report suggests that TV enjoys the benefits of scale, which enables it to deliver efficient, profitable returns at higher spend volume than other media before diminishing returns take effect. Online video and radio also provided profitable returns.[vii]
Seven: Integration drives better results. Multi-channel integrated campaigns deliver significantly higher ROI than single-channel campaigns, particularly when they work together to increase reach. Just going from one platform to two increases marketing ROI by 19%, TV supported by digital improves media effectiveness by 61%.[viii] A study by Kantar showed that cross-platform campaigns efficiently add reach and deliver a ‘synergy effect’ which makes them 31% more effective at building brands. For example, digital video and TV working together can generate an additional 25% of ROI.[ix] In another study by Kantar Millward Brown shows that TV is also an excellent platform for digital and other media; it helps improve the effectiveness of other media by a factor of 3x.
Eight: Easily recognizable brands that leverage distinctive brand assets have an advantage. Brand assets like colour, logo, symbol, font, character, slogan, jingle, or a signature tune like ‘intel inside’ can trigger easy brand recognition and related memories. A study by Kantar showed that brands with the strongest assets are, on average, 52% more likely to come to mind when consumers are shopping within the category.[x]
[i] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.
[ii] Profit Ability: the Business Case for Advertising.” Thinkbox, Ebiquity, Gain Theory and Thinkbox, 2018, www.thinkbox.tv/research/thinkbox-research/profit-ability-the-business-case-for-advertising/.
[iii] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.
[iv] Dyson, Paul, and Karl Weaver. “The Top 10 Drivers of Profitable Advertising.” Data2Decisions, 25 May 2016, data2decisions.com/the-top-10-drivers-of-profitable-advertising/.
[v] Whiteside, Stephen. “Emotional Ads Pay off for P&G.” WARC, Events Reports, South by Southwest, Mar. 2015, www.warc.com/NewsAndOpinion/News/34492.
[vi] Binet, Les, and Peter Field. “Binet and Field Outline Key Formulas for Brand Building in Context.” IPA, ipa.co.uk/news/binet-and-field-outline-key-formulas-for-brand-building-in-context.
[vii] Profit Ability: the Business Case for Advertising.” Thinkbox, Ebiquity, Gain Theory and Thinkbox, 2018, www.thinkbox.tv/research/thinkbox-research/profit-ability-the-business-case-for-advertising/.
[viii] Goodbuzz Inc. “White Paper: Anatomy Of Effectiveness.” LinkedIn SlideShare, WARC, 18 June 2019, www.slideshare.net/Goodbuzz/white-paper-anatomy-of-effectiveness.
[ix] AdReaction: The Art of Integration.” Kantar, Kantar Millward Brown, Nov. 2017, www.millwardbrown.com/documents/Reports/The_Art_of_Integration/default.aspx?access=yes.
[x] WARC from Home: Distinctive Brand Assets – What They Are and Why They Matter.” WARC, 2018, www.warc.com/newsandopinion/opinion/warc-from-home-distinctive-brand-assets–what-they-are-and-why-they-matter/3484.