Demonstrating the return from experiential

EXPERIENTIAL IMPACT & ROI

The IPM has been practising & training an experiential research methodology for a number of years.

Based on feedback from IPM members & the industry, it set up the IPM Experiential Council in 2014 that have focused on creating an industry-wide benchmarking tool that can measure and compare the effectiveness of experiential campaigns.  This has developed over the past three years and involved over 20 agencies and 45 brands sharing their campaign data using this research methodology.

The research methodology focuses on measuring consumers pre, during and post campaign with 3 key outputs: reach, impact & ROI.  Using a score which assesses the consumer relevancy, association, availability, value & expectation with the brand a brand affinity measure (BAM) is attributed with NPS.

This is linked to likelihood & actual purchase when measuring post the experience allowing for ROI indicators to be calculated.

Following contributions from IPM’s membership, there is now measurement and evaluation data from over 100 events across seven industry sectors and five categories of experiential. The data is already providing a range of valuable insights that not only gives a snapshot of current trends in experiential, but also provide comparisons between recent campaigns with older projects highlighting changes in trends over time.

 

1.INVESTMENT IN CAMPAIGNS IS GOING UP

Brands are investing more in experiential campaigns year on year and these campaigns are becoming increasingly effective. The data shows that experiential is demonstrating positive ROI scores across the board with FMCG showing a 5:1 return investment, SMCG 7:1 and automotive as high as 26:1.

The main focus of this extra investment appears to be on improving the quality of individual engagements with evidence of an increase in cost per contact across campaigns which is in part likely due to a likely lengthening of engagement. This is supported by last year’s early analysis of the data that showed engagements of five minutes or more have the most positive impact on brand amplification.  What the data also shows is that these better quality engagements is leading to greater amplification and more post event communication which brings the cost per reach down.

 

2. OWNED EVENTS HAVE THE BIGGEST IMPACT

Of the five categories of experiential that the ROI measurement framework focuses on (Pop-up, owned events, branded Installations, creative sampling and in-retail), owned events see the largest increases in brand affinity and intention to purchase as well as the highest levels of amplification.

While often the most expensive of activations, it is through owned events that brands can most fully engage with consumers, convey their brand story and meet consumer’s increasing demand for immersive experiences.

 

3. GEN Z LOVE EXPERIENTIAL AS MUCH AS MILLENNIALS

It’s well known that millennials have been the engine driving the experience economy and our data supports this.

Experiential campaigns are extremely popular with this demographic who have a high likelihood to be influenced in a positive way and to communicate about the event afterwards.  What we’re also seeing is that those born in the 90s and later (Gen Z) are equally enthralled by experiential and are likely to continue to fuel the experience economy boom.

 

4. LOOKING FORWARD TO 2020

We expect to see wider trends in experiential for longer term experiences that are more deeply immersive and more amplifiable reflected in our data. As we increase the size of the database with more contributions from participating agencies, we’ll have access to even more detailed insights that can be used by our members to help with their brand planning.

For further updates on this benchmarking study please go to: https://www.theipm.org.uk/page/Experiential_Effectiveness

Five Principles of Growth in B2B Marketing

Compared to Business-to-Consumer marketing, the effectiveness of Business-to-business marketing is a relatively under-studied field.

So a report written by EffWeek contributors, Peter  Field and Les Binet, and launched by the B2B Institute, a think tank funded by LinkedIn, is designed to shed light on the core drivers of effective B2B marketing.

It identifies five key principles behind effective B2B advertising and communications:

  • Invest in share of voice
  • Balance brand and activation
  • Expand your customer base
  • Maximise mental availability
  • Harness the power of emotion

Whilst these principles are similar to those which drive successful communications to consumers, they need to be differently applied to appeal to businesses. Worryingly, a recent survey of marketers by LinkedIn Marketing Solutions also suggests that many B2B marketers are doing the exact opposite of following these rules – for instance, placing more belief in loyalty-based strategies rather than customer acquisition.

You can download the full report from the B2B Institute website.

 

EffWeek 2019: The Value of Experience

Customer experience is a battleground for brands. Almost 90 per cent of companies say they primarily compete on the customer experience they offer, and businesses increasingly look to this area to help them grow.

But how do brands measure this key metric?

Simon James, International Data and AI Lead, Publicis Sapient, presents the evidence from a study measuring the contribution of customer experience in the financial services category.

The research set out to estimate the business and brand impact of customer experience (CX), understand how CX adds value and develop an approach for calculating the payback from CX investment.

It identified three key metrics of reputation stock, experience stock and net customer growth, arguing that experience – above all, digital experience – was by far the driver of value in the category.

Download the presentation.

EffWeek 2019 The UK Media Landscape

Digital media is changing how Britons shop, consume content, and start businesses.

Enders Analysis has pulled together evidence from long-term trends in e-commerce and online advertising to create a snapshot of the media landscape in which today’s marketers operate.

This data shows that the UK market has characteristics, such as the growth in online advertising and the rise in small digital businesses, that make it distinctive from other countries.

The presentation, for the 2019 EffWeek conference, argues that in future, UK production and consumption of content – such as paid-for TV services – will increasingly need to be seen in a global context.

Download report

More on Enders Analysis

 

Lemon. How the advertising brain turned sour.

Advertising has lost its power to persuade, entertain and make people feel. How did we lose this power and how can we get it back?

This ground-breaking new book by Orlando Wood, Chief Innovation Officer of System1 Group, shows how a shift in thinking styles is undermining creativity and making advertising less effective.

The way our brains see and process the world affects our whole approach to work and creativity.

Using neuroscience, cultural history and advertising research, Lemon.’ describes how abstract, left-brain thinking has swept across business and popular culture.

In advertising, this has led to a flatness and a drive for authenticity that work against producing great creative campaigns. It is stripping communications of humanity, and turning advertising sour.

Drawing on the IPA Effectiveness Databank and System1 Group’s advertising database, Lemon.’ lays out an alternative approach to creativity that can restore advertising’s impact and effectiveness.

It will challenge how you think about advertising.  It could change how you think, full stop.

Download a Slice of Lemon presentation

Do you know your thinking style? Take this quiz to find out.

Copies of the full report are available from www.ipa.co.uk priced at £25 + P&P for IPA members, £50+P&P for non-members.

You can also buy it at the non-member price from Amazon.

 

 

 

A hierarchy of brand metrics – Infographic

Not all metrics are created equal. Nor should we necessarily measure something just because we can.

Gain Theory and EffWorks carried out research to see how brands were implementing a measurement strategy.
Download full report
Measurement strategy in the digital era

Watch a presentation of the report given at EffWeek

When speaking to brand representatives they were very clear that there was a hierarchy of metrics and that, for most, profitable growth was at the top. These metrics do not exist in isolation and while growth in profits might be the key metric, others are important because they ladder into and contribute to this ultimate KPI.

What does this mean? Well, profitable growth is key. But this metric itself depends on another set of metrics, all of which need to be measured.

The Board-Brand Rift – getting the brand back in the boardroom

New research we undertook with our partners the FT reveals that over half of business leaders rate their knowledge of brand-building as average to very poor.

At an event at the Cannes Lions Festival of Creativity today, we revealed the results of a survey of the FT’s readership. Concerningly, it shows a lack of confidence around brand-building in the boardroom at many organisations.

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The board-brand rift

Half the business leaders we questioned thought their knowledge of brand-building was average at best, and very poor at worst. Many of these people are responsible for balancing marketing budgets between long-term and short-term investments, so this could be bad news for brand-building.

Chart showing that 50% of business leaders rate their knowledge of brand-buidling as average to very poor. Evidence of a lack of understanding in the boardroom.

As Peter Field and Les Binet have uncovered in their research, the industry as a whole has seen a gradual shift from long-term brand-building to shorter-term direct response campaigns. ‘The Brand-Board Rift’, is based upon a global survey of FT readers, 43% of whom are c-level executives. Through it, we examine some of the underlying causes of this trend by looking at the capabilities and attitudes of senior managers and leaders.

“The data uncovered a worrying lack of confidence in brand management, within and beyond the marketing department.”

“Our aim with this research was to get inside businesses and understand the driving forces behind recent changes in marketing investment. The available evidence tells us that the brand model still works. We wanted to establish what needs to be done to bring brands back to the boardroom,” said David Buttle, Global Marketing Director, Commercial for the Financial Times. “The data uncovered a worrying lack of confidence in brand management, both within and beyond the marketing department.”

Here is a summary of some of the headline findings from the survey:

  • half of business leaders rate their knowledge of brand-building as average to very poor
  • less than a third of  companies use brand health metrics, reporting on metrics such as salience, distinctiveness and favourability, at boardroom level
  • many expressed a lack of access to good  measurement of the commercial impact of brands
  • over half of business leaders ranked social media top for brand-building when evidence actually places it at the bottom of the list of media
  • leaders at businesses that use brand health metrics express a greater belief in the power of creativity
EffWeek 2019
Creativity & Effectiveness Reimagined
Download presentations

Organisational culture-change is a crucial part of improving perceptions and understanding of the value of long-term marketing. “The report makes clear recommendations,” says David Buttle. “It provides guidance on how to create an organisational environment in which the very real commercial benefits of investing in the long-term health of brands can be realised.”

The evidence of the value of long-term marketing is there. The challenge is to elevate that evidence to the boardroom, to keep investment in long-term campaigns at levels that maintain effectiveness, stemming the tide towards short-term efficiencies. Janet Hull of the IPA is hopeful that this can happen, “We welcome access to senior executives to share this evidence base, and our learnings about how to build, rather than diminish, brand power. The EffWorks programme is built for this purpose and, with the support of marketers and partners like the FT, we have high hopes of constructive dialogue and positive action.”

Download ‘The Board-Brand rift’

Buy tickets for EffWeek 2019

 

We’re killing the effectiveness of creativity. Peter Field shows how.

New research from Peter Field shows that short-term thinking is no longer just ‘Selling creativity short. It is killing it. The crisis in creative effectiveness was launched at the Cannes Lions Festival of Creativity 2019.

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The crisis in creative effectiveness

Creativity, often cited as the lifeblood of our industry has always had an ‘effectiveness advantage.’ Creative campaigns that seek to build strong brands are very good at doing so. Creatively awarded campaigns are more effective than those that have not been awarded.

Things have changed…

But, one of the most shocking findings of Peter Field’s new report is that creative campaigns are now no longer outperforming their less inspired cousins when it comes to effectiveness. According to his findings, they are less effective than they have been in 24 years of data analysis. Today they are no more effective than non-awarded campaigns.

Chart showing the decline of effectiveness in creative campaigns

This collapse in the effectiveness and efficiency of creativity can be explained by one over-riding factor. The shift to short-term activation-focused campaigns.

At the same time, they are also becoming less efficient. From 1996-2008 creatively awarded campaigns were around 12 times as efficient as non-awarded ones. But over the period from 2006-2018 this fell. Creative campaigns became less than four times as efficient. It continues to fall and creativity is almost certainly delivering no overall efficiency advantage today.

chart showing the collapse in effectiveness of creative campaigns that is killing creativity

So are we killing creativity? Or, is this just a natural progression of the rules of marketing?

A casualty of short-termism

This collapse in the effectiveness and efficiency of creativity can be explained by one over-riding factor. The shift to short-term activation-focused campaigns and the strategic and media trends this has promoted.

A short-term environment is not one in which creativity flourishes. Enormous effectiveness multipliers are evident for the most creative campaigns. But it needs time. Creativity delivers very little of its full potential over short campaign durations.

“This is the report I hoped I would never have to write. A final wake-up call for good sense, before it is too late.”
Peter Field Marketing Consultant 

And yet the fashion for short-term, disposable and ultimately inefficient creativity continues. Perversely, it is the trends that brands and the industry have chased over the last decade that are to blame for the sorry state of one of our most powerful tools. More and more, awards juries are rewarding short term, disposable creative ideas, encouraging this mindset.

EffWeek 2019
Creativity & Effectiveness Reimagined
Download presentations

Great examples still exist in the form of exemplars like Snickers, John Lewis, and Guinness, but there is a gulf between them and bad practice. It would be easy to assume that the rules have somehow changed, that creativity is no longer important, but the evidence just doesn’t support that. As Janet Hull of the IPA says, “this is not because the rules of creativity for brand-building have changed, but rather that they are not being applied in the right measure, through the right channels, at the right time.”

The approach that high performers take is defined by:

  • a more balanced approach to short and long-term objectives
  • campaign in-market long enough to embed behavioural change: at least six months
  • broader and earlier targeting of consumers, not data-driven, real-time communications linked to purchase intent
  • greater use of broad reach, brand-building media: TV, online video, OOH
  • a balanced allocation of media expenditure between brand building and sales activation.

Best practice guidelines like those found in ‘Effectiveness in context,’ by Les Binet and Peter Field should be used.

We must stop squandering creativity

We believe that if we are to stem the decline of creativity in our industry, we need to stop squandering the use of creative firepower for tactical initiatives. Instead, briefs should stress that ideas will strengthen the brand over time. Creative shows also have a role to play. Separate classes of awards are recommended for short and long-term creativity. This could incentivise a rebalancing of creative endeavour in favour of long-term results.

The Crisis in Creative effectiveness is available to download now. The report is a follow-up to the IPA’s 2016 report Selling Creativity Short which was based on IPA and Gunn report data to 2014. The new report includes two new waves of case study data, from 2016 and 2018. This provides 24 years of data covering almost 600 case studies, 121 of which picked up major creative awards worldwide at the 46 creative shows monitored by the Gunn Report (now part of WARC Rankings).

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The crisis in creative effectiveness

Hard news is good news for advertisers

EffWorks partners Newsworks’ latest study with Neuro-Insight found that ads appearing around hard news stories on news brand sites elicit higher peaks in memory encoding and emotional intensity than ads in soft news stories.

The findings show that the news environment as a whole creates high engagement and memory encoding in both hard and soft news contexts.

Hard news doesn’t create dislike

But crucially, there is no evidence that hard news stories create dislike. In fact, hard news stories generate a higher “approach” response, rather than a negative withdrawal response. These findings call into question an over-zealous approach to brand safety, for example, through blacklisting and keyword blocking.

Denise Turner, Insight Director at Newsworks thinks this research suggests that the current tools for assessing brand safety are too blunt. “We need to think less about bans and more about defining suitable contexts,” she says. “That way, brands can reap the rewards of conveying their messages to a highly attentive, intensely engaged audience in a compelling, emotionally powerful context.”

Measuring brain responses to ads in hard and soft news contexts

The research measured participants’ brain responses to ads in different types of stories, analysing a number of sites in the brain in order to identify key research metrics:

  • Long-term memory encoding – Memory encoding is key because it correlates with decision-making and purchase intent. It is measured for both left brain (detail and language) and right brain (more global aspects of processing)
  • Engagement – Engagement is an indicator of how involved people are, and is generally triggered by material that is of personal relevance
  • Emotional intensity – Emotional intensity relates to the strength of emotion being experienced

Results show that the average dwell time is 1.4 times higher for advertising in hard news stories. Here is an opportunity for brands to capitalise on the increased attention of readers.

The research indicates that people’s brains are more actively engaged in a hard news environment and key advertising messages are more likely to be absorbed. This is because of the higher and more frequent peaks in memory encoding and emotional intensity.

Ads are sometimes more trusted in a hard news environment

Neuro-Insight also explored conscious responses to ads in hard and soft news stories in news brand content. They found that people can easily distinguish between hard and soft news stories and describe the emotions provoked:

  • 86% agree that they “know that the role of news brands is to keep me up to date with all kinds of stories and that sometimes they can be upsetting or shocking”
  • 89% “like browsing my news brands and coming across new things”
    Although some people prefer ads in a soft news context, others feel that ads in a hard news story are more trusted

Commenting on the research, Denise Turner said: “We already know that trusted news brand environments benefit advertiser brands, in terms of higher attention, stronger brand responses and better value. But there was a concern about the impact of appearing around hard news stories.

Read the full research story here.

Newsworks are partners on EffWeek. EffWeek 2019 is taking place from 15-18 October 2019. You can book earlybird tickets for the flagship conference on Tuesday 15 October now.

Culture First Quantified – new research on effectiveness culture in agencies and brands

This year at EffWeek 2018 we’ve published a quantitative analysis of the prevalence marketing effectiveness culture in agencies, brands and finance departments.

The research looked for the organisational attributes identified in our 2017 paper ‘Culture First‘. Over 200 practitioners from both agencies and brands were surveyed to find out whether effectiveness culture was finding its way onto the agenda. Presented by Libby Childs of Greengrass Consulting, it aimed to broaden our understanding of what organisations are doing, or not doing, to improve effectiveness. Watch the session or scroll down to download Libby’s slides.

During EffWeek 2018, and following the culture theme, we also presented research into the relationship between finance and marketing teams. You can also watch that presentation by Fran Cassidy on the website.

Objectives

  • To broaden and deepen industry knowledge and understanding of the current levels of ‘Effectiveness Culture’
  • To establish an industry baseline against which progress can be measured
  • To determine current practices around the behaviours identified in the 2017 study, exploring those which are helping and hindering the creation of an ‘Effectiveness Culture’
  • To investigate the interdependencies between stakeholders

Download the slides from Libby’s presentation below.

DOWNLOAD Profit Ability: The business case for advertising

Profit Ability: the business case for advertising by Ebiquity and Gain Theory quantifies the impact that different forms of advertising have on the bottom line.

Crucially, it has demonstrated this for both short-term and long-term effects, and across a range of sectors.

Download Profit Ability The Business Case For Advertising 2018 Full Report

What emerges is a compelling case for re-thinking how advertising investment should be approached and hard evidence of what businesses can trust to deliver growth. Profit Ability swings the spotlight back on to creating shareholder value. It provides industry benchmarks for what businesses can expect advertising to deliver.

The appendices of the report pull together the findings from Ebiquity and Gain Theory and organise them into three specific sectors, FMCG, Retail and Financial Services, for easy reference.

If you like to take things in via video you can watch the presentation below of the main findings given at the launch of the report by Andrew Challier and Dr Nick Pugh from Ebiquity and Matthew Chappell from Gain Theory. And steal any charts you need from the slides here.

You can download your copy of the full report at the top of this page or email isabel.johnson@thinkbox.tv to get a free printed copy.

Contents of the report

Overview

  • Foreword by Professor Patrick Barwise
  • The Authors
  • Executive Summary
  • Introduction

Part One

The short-term impact of advertising

  • Background: The Danger of ‘Irresponsible ROI’
  • Ebiquity: Data Set & Short-Term Methodology
  • Short-Term Findings

Part Two

The long-term impact of advertising long-term findings

  • Long-Term Findings
  • Gain Theory: Long-Term Methodology

Part Three

The total impact of advertising

  • Total Profit: Key Findings
  • Optimising for the Long Term
  • Conclusion

Appendix 01

Sector analysis

  • FMCG
  • Retail
  • Financial Services

Appendix 02

  • Media at a Glance

Contact

  • About Thinkbox
  • Further Information and Contacts

Download the JICMail Whitepaper and learn how to measure mail effectiveness

In today’s digital environment, standing out from the crowd can be a real challenge. The good news is that independent research confirms that direct mail is an effective way to drive cut-through and deliver lasting impressions for businesses.

Royal Mail MarketReach have produced this white paper to explore the powerful impact that mail can offer marketers – and show how mail can help boost their marketing performance. Mail is shared, looked at multiple times and retained in the home. When added to the marketing mix it can boost ROI by as much as 12%. This white paper delivers key independent insights to help marketers understand how mail can perform for their sector.

Download the paper below. You can also explore mail insights using MarketReach’s interactive JICMAIL Insight Engine.

Short-termism and the demise of the fluent device

Do fluent devices make long term campaigns more effective?

In this video, Orlando Wood of System1 Group presents his research using the IPA Databank. He looks at particular types of long-term campaigns through the lens of behavioural science, testing a hypothesis about ‘fluent devices’. His research presents interesting implications for the advertising and marketing communities.

Watch an update of this research
Creativity for the long term

Watch the video below to see the 30-minute presentation Orlando made at EffWeek 2017. If you are short on time or prefer the written word, scroll down to read key learnings from the presentation and links to related resources.

Apologies for the occasional problems with sound in this video. 

Key learnings

Find out:
What is a fluent device?
Why do fluent devices work? A view through the lens of behavioural science
Are campaigns with fluent devices more effective?
Are fluent devices being used to their potential in campaigns today?
What is the effect of the demise of the fluent device?


 

What is a fluent device?

Look at these images of characters used in advertising. If you are familiar with english language advertising over the last forty years then you will probably be able to identify all the brands.

A collage of ads featuring a chacter based fluent device

If you were able to recognise these brands easily, you were responding to the first kind of fluent device we are going to look at:

  • A fictitious character or characters created by the brand and used as the primary vehicle for the drama in more than one execution across a campaign (time code 10:40)

Now look at these slogans used by brands. Do you know which brand they represent?

Famous advertising slogans that are fluent devices

If you were also able to recognise these brands then you were responding to another type of fluent device:

  • A creative conceit expressed as a slogan, used more than once in a campaign as the primary vehicle of the drama without which the ad would make little sense  (time code 10:50)

Watch a playlist of ads with character-driven fluent devices

Why do fluent devices work?

One of the key things we have learned from behavioural science over the last few years, is that we are far less rational creatures than we think we are. On a day-to-day basis we make many choices quickly and instinctively, and guided by previous experience. It’s what we call ‘System 1 thinking’. (timecode 3:51)

Based behavioural science, there are three things that advertisers need to know (timecode 4:28):

  • We learn gradually over time to make quick decisions in the moment. Advertisers need to create ‘Fame’ to ensure that their brand comes quickly to mind at the moment of purchase.
  • Emotions help us to encode whether an experience is good, bad or indifferent, which guides and simplifies our choices in the future. Brands that generate ‘Feeling‘ amongst an audience leverage this characteristic of our System 1 thinking
  • We are pattern recognition machines, we scan the environment all the time for things we have seen before. A brand which capitalises on this is creating ‘Fluency

‘Fluent devices’ are powerful because often-repeated, familiar characters or scenarios both generate Feeling and take advantage of our pattern recognition abilities – they create processing Fluency.


Are campaigns with fluent devices more effective?

Orlando used the IPA database and reviewed all long term campaigns, identifying those which feature fluent devices. He worked with Peter Field to test his hypothesis that those featuring a ‘fluent device’ would be more effective and more likely to generate profit gain. The results are:

  • Of the long-term campaigns between 1992 and the present day 25% had fluent devices (timecode 12:32)
  • Long-term campaigns with fluent devices are 23% more likely to achieve market share gain and 22% more likely to achieve profit gain (timecode 13:19)
  • The results were filtered by Extra Share of Voice (ESOV) to make sure this was not just a result of greater spend. The results were the same and in fact even better with profit gain indicating that they have strong efficiency effects as well (timecode 13:50)
  • If you compare character-based fluent devices with slogan based ones, the character-based devices tend to do better on on most things including price sensitivity (timecode 14:50)
  • Slogans do better on shorter term measures, they have an activation effect
  • Substituting a pure character device for a hired device such as a celebrity does significantly less well in the long-term, but can have good short term effects (timecode 17:50)

 

Are fluent devices being used to their potential in campaigns today?

  • Since 1992 the prevalence of campaigns with fluent devices entered into the IPA EffAwards has gone down from 41% to 12% (timecode 20:37)
  • If you overlay this result with data showing the number of people who say that they ‘enjoy TV advertising as much as the programmes’, there is a concurrent reduction in this measure (timecode 22:53)

“The fluent device is an endangered species.”
Orlando Wood System1 Research timecode 20:40

  • The reasons that the number of campaigns with fluent devices is falling could be:  (timecode 24:00+):
    • Two thirds of the campaigns with fluent devices were FMCG brands. FMCG brands are spending less on advertising
    • Short-term and activation thinking is creeping in to long term campaigns
    • In our multi channel world marketers are focussing more on the medium than the message
    • Creative fashion – are creatives simply not making as many ads that are populist, because it is no longer fashionable to do so?

 

What are the potential effects of the demise of the fluent device?

  • The fact that people are enjoying ads less, could also be feeding into the lack of trust that the modern consumer places in the advertising industry. It is possible that the demise of the fluent device has contributed to that loss of enjoyment
  • It is a disaster for the industry if the reason that these types of executions are falling is because in a multi-channel world marketers are focussing on channels and medium more than message. Because of their ability to provoke strong recall and an emotional response with a very efficient use of the viewers time, fluent devices are the perfect vehicle for multi-channel campaigns. The few seconds that you get to engage someone on social media, for example, would be ample time for them to work.

Read a blog on System1 Research’s site about their study of ‘Fluent Devices’

Watch: Media in Context – Les Binet and Peter Field at EffWeek 2017

PETER AND LES UPDATED THIS PRESENTATION. WATCH THE NEW VERSION.

‘Media in Context’ is the sneak preview of Les Binet and Peter Field’s further research into the changing media landscape. In this session, they look in more detail at what produces long-term branding effects and how the 60/40 brand building vs activation rule plays out in different sectors.

Over the last ten years, Les Binet and Peter Field have been trawling the IPA Databank to uncover some rules about how marketing works. In June 2017 their latest published findings were released: ‘Media in Focus‘. They showed that the decline in long-termism and in marketing effectiveness since the start of the digital age is real.

This year at EffWeek they updated us with new findings that are beginning to get beneath the skin of the original research and put their earlier findings about media into context. They brought us more detail about how their ‘rules’ work with different sectors, types of brands, and marketing approaches.

 

Key learnings


For a summary table of all the variations on the 60/40 brand building/ activation rule, go to timecode 45:15 in the video

For a very  topline summary of the main conclusions in this presentation go to timecode 45:40 in the video

Peter and Les’ main findings are summarised below – for more detail watch their presentation.

Find out:
The effect of rational vs emotional decision making on the 60/40 rule
Product innovation and marketing effectiveness
The effects of category development on marketing effectiveness
Brand development and effectiveness
The effect of price position
The effect of online research – comparing high and low research categories
Online vs offline brands
Subscription vs series purchases
Differences to the 60/40 rule in different categories

The effect of rational vs emotional decision making on the 60/40 rule

(timecode 4:30) Any kind of involvement increases the effectiveness of communications. The more people think about the purpose of the decision or the more emotionally involved they are the more effective comms tend to be. But rational and emotional components have slightly different effects (timecode: 6.00)

  • Regardless of whether the decision is emotional or rational penetration is still the driver of growth
  • But we find that in more rational categories we get bigger activation effects and in more emotional categories we get bigger brand building effect.
  • (timecode:7:33) In terms of what this all means for budgets – advertising media works better for emotional decisions
  • (timecode: 8:20) But, in terms of the 60/40 rule best practice is to slightly upweight the brand building in rational categories and slightly downweight it in more emotional categories

 

Product innovation and marketing effectiveness

(timecode: 8:45) Product innovation has become a big issue in last 20 years. In general we see a definite increase of effectiveness of marketing communications when you have product innovation. In this part of the presentation Les goes through the variants of this metric against different types of innovation such as category launches or new sub-brands

  • New variant launches underperform and are worse than no innovation at all
  • Regardless of what kind of innovation you are doing penetration is the main driver
  • Effects tend to be slanted towards activation, so innovation is a slightly more short term strategy
  • (timecode: 11:48)Advertising media work harder with product innovation and it seems to boost growth from other factors
  • In terms of 60/40 you need to upweight brand building slightly

 

The effects of category development on marketing effectiveness

  • (timecode 13:00) As the category matures the effects of advertising get smaller and advertising efficiency declines. Penetration is still the name of the game, BUT loyalty effects become more important
  • We see a shift from volume and top line profit to price and ROI metrics
  • (timecode 14.50) Reduce the brand spend as the category matures

 

Brand development and effectiveness

  • (timecode 15.35) As brands mature loyalty becomes more important and there is a shift from volume to price
  • The bigger and stronger a brand the less effect advertising has
  • There are two points in a brand life when activation effects are particularly strong. When you’re new and when you’re big
  • Immediately after launch efficiency drops – a difficult trap to be in if your launch didn’t get you a foothold in the market
  • The 60:40 rule is slightly different depending on size. For small brands its much more in favour of activation rather than brand. For strong challengers it’s more about brand building

 

The effect of price position

(timecode 19:55) There are two points in the market where communications work best – at the bottom of the market, where you have really low prices and at the very top end of the market with super premium prices. Penetration still more important across the board, although there is an uplift in the importance of loyalty for premium products.

The effect of online research – comparing high and low research categories

(timecode 23:35) Research uses the TNS and Google Consumer Barometer

  • Short term effects are stronger in high research categories because we have many more opportunities to activate. You don’t get same kind of uplift for long term effects
  • There is a much higher efficiency and responsiveness to advertising investment in high research categories
  • Rational decision making has grown in influence and the danger is that people assume we need to step back on the emotional advertising and focus on rational advertising. The data contradicts this. Emotional campaigns are actually more efficient in these categories
  • The data shows that in low research categories the 60/40 rule still applies but in high research a greater proportion on brand building is (counterintuitively) significantly more effective. We found a balance of 78/22 Brand building / activation was optimum

 

Online vs offline brands

(timecode 29:25)

  • Online brands are twice as likely to be focussed on driving short term goals, backing up the notion that digital media is driving short termism
  • Many of these brands we looked at have a significant offline presences as well – we’re not talking about the Uber’s of the world here. So this is significant evidence that they are being sucked into the world of short term thinking principally because of their exposure to digital metrics.
  • This isn’t smart – there is no significant difference to the 60/40 rule between online and offline brands

 

Subscription vs series purchases

(timecode 31:34) A subscription purchase includes a contract that binds us in for a period of time. A series purchase is a repeated purchase, classically packaged goods such as toothpaste

  • Subscription brands focus much more on acquisition
  • Loyalty effects are actually much, much lower than you might expect in subscription categories. In both series and subscription loyalty is last acquisition does better, but reach is the best
  • In subscription categories the 60/40 rule is different because of the vital importance of bringing on board new customers, reaching out to people who don’t know us and don’t care about us – brand building needs to be at 71%

 

Differences to the 60/40 rule in different categories

(timecode 36:30)

  • Differences in responsiveness to advertising (measured using SOV). Retail and packaged goods are fairly unresponsive, services and financial services are responsive
  • Financial services need to uplift brand building to 75%. There are many reasons for this for example, the financial meltdown and its effect on the brands
  • Services – the databank is dominated by brands with perishable commodities so they are very focussed on short term effects. The sweet spot here is the opposite of financial services and weighted 65/35 towards activation
  • Retail is closer to 60/40

Related content:

DOWNLOAD – Media in Focus by Les Binet and Peter Field

‘Media in Focus’ is the first chapter of research from Les Binet and Peter Field called Marketing Effectiveness in the Digital Era. It was first presented at EffWeek 2016 and the paper was published by the IPA in June 2017.

This publication takes the changing media landscape as its focus and addresses such issues as: does mass marketing still work? Is tight targeting now the most efficient approach? Is unpaid making paid media redundant? It also investigates the broader issues of budgeting, planning and reporting, and challenges the industry to reconsider approaches to efficiency, ROMI and measurement strategy.

Buy hard copy
Media in focus

Or, if you don’t need a hard copy for your bookcase, you can download ‘Media in focus’ for free.

Reactions to the research have been very positive. Many clients and agencies are actively using it to assess their own approach to effectiveness. Nicole Kirkland is a member of our Effectiveness Champions, a group of practitioners from advertising agencies all across the UK who are committed to greater effectiveness. We asked her to give her reaction to the paper and explain why it is so important, not just for the C-Suite, but for those on the frontline of marketing.

EffWeek 2019
Creativity & Effectiveness Reimagined
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A point-of-view from Nicole Kirkland, Senior Planner, Southpaw

“As planners we’re always conscious of not being stuck in the London bubble, of ‘keeping it real’ when it comes to understanding who our consumers really are. Days after reading chapter 3.0 I’m still disappointed at my own ignorance, and berating myself over how out of touch I had become with the realities of the new media landscape, mainly, the continued prevalence of live TV viewing, and the degree to which traditional formats continue to impact overall business effectiveness.

“It brings some much needed quantitative data to those of us who are increasingly being asked to prove we can win before the race has even begun”

Somewhere amongst increasing client confidence in digital formats, and the constant hum coming from the major social media platforms in their ongoing innovation race, my grasp of middle England’s relationship with media had become distorted. Contrary to my perceptions, only 4.0%, not ‘most people’ watch subscriber VoD, and VoD hasn’t substantially dented viewing figures for conventional broadcast TV. Furthermore, I was surprised to learn the degree to which traditional media still has a very strong role to play, particularly when coupled with digital formats, in communicating with Millennials.

This aside, the paper brought some comfort and provides helpful ammunition against the argument that digital-only campaigns offer an equally effective, yet more cost efficient way of doing business; and it brings some much needed quantitative data to those of us who are increasingly being asked to prove we can win before the race has even begun.”


Related Content

Prefer a video? We’ve got that covered, you can watch Peter and Les present their findings prior to publishing this paper at EffWeek 2016.

Quickly understand the background to the Media in Focus and the main data sources (infographic)

Understand the metrics that are used to measure effectiveness as opposed to efficiency in Media in Focus (infographic)

Green Paper – Measurement Strategy in the Digital Era

This Green Paper is a provocative think piece on measurement strategy.

A thinktank on the subject explored the matter further at EffWeek 2017. The paper lays the groundwork for a new piece of research being undertaken for EffWeek 2018, led by the IPA and Gain Theory.

Click on the image below to read or download a copy, or you can access an online e-book of the green paper.

The cover of the Measurement Green Paper released at EffWeek 2017

Related content:

A video interview with John Webb, managing partner of Gain Theory, who are leading this research with the IPA.

Getting from ROMI to Action: A blog piece from John Webb about how to actually action marketing measurement insights.

Econometrics explained: an introductory guide to measuring marketing and communications effectiveness using Marketing Mix Modelling.

The uncertain future of prediction – new MRS report released

MRS recently launched their latest Delphi report: Prediction and planning in an uncertain world. We spoke to Jane Frost, CEO, about the findings.

In his talk at EffWeek 2016 Professor Patrick Barwise drew a wry laugh of recognition from the audience with this statement:

“When you as a marketer stand next to someone from finance or operations, much of what you say will sound less reliable… because it is”

“Marketing is about the future – future sales, future campaigns, future products,” he continues. “And when someone says to you ‘I can tell you about the future’, what do you think? Well, you’re sceptical aren’t you?”

Patrick Barwise speaking at EffWeek 2016
Professor Patrick Barwise talks to Ravi Mattu, Editorial Director for FT² at Effweek 2016

This scepticism when it comes to prediction has become part of the popular consciousness recently. Predicting the future has become a risky business for all involved. Illustrated most publicly by Michael Gove’s ‘people have had enough of experts’ observation during the run-up to Brexit, and its apparent validation by the failure of the polls at both the referendum and the general election.

MRS commissioned their new report to move the conversation on. “We wanted to broaden the debate from the “polling doesn’t work,” rhetoric,” says CEO Jane Frost. “We also wanted to provide some practical advice and context for mid-senior managers who are involved in forecasting decisions.”


Read an opinion piece from Jane Frost on how to use data properly, and how consumers are protecting their privacy
Download the MRS report: Prediction and Planning in an Uncertainty World.

The power of uncertainty

Most people try to predict the future to try to reduce uncertainty. But one thing that stood out in the report was the value of simply not being sure. “As companies become more successful, the trigger for change is reduced, “says Jane. “Dominance leads to inertia and in this scenario companies often do bad research. They talk to their customers and forget the people who don’t buy their products. They base their predictions on past success, and they don’t bring in outsiders to the research process. The result is that they often miss something crucial that is happening in the world. Their predictions simply don’t include any big surprises. Unfortunately the world does.”

Coloured fans spread out

Uncertainty plays a huge part in the predictions of some of the most powerful economic players. The Bank of England use what they call ‘Fan charts‘ to predict metrics such as inflation. The charts allow them to show a range of possibilities and a confidence interval for each possibility. It forces the reader to consider that for example, although 2% inflation looks likely, 5% is also within the range of possibilities. This is what bad research lacks.

Jane thinks we can see examples of this out in the world now. “I would argue that Uber for example, may not have been thinking forward enough,” she says. “You can see that they are getting themselves into unnecessary problems now. It looks as though they may not have considered the point at which technology would not be the answer to their problems.”

Meeting the unreported need

Someone opening the door to a hotel room

Disruptive technology has a knack for meeting a previously unreported need. Airbnb understood that customers needs had fundamentally changed, while the hotel industry was busy with business as usual – refining and refining the model they already had. “Companies with a strong mono-culture often fail to see the unreported need,” says Jane. They tend to forecast based on previous successes and failure and historical data. So when someone comes along with a new and better idea, suddenly all that data is obsolete, because it is looking at the problem through the wrong lens.”

The radical influence of ethnography

When organisations rely on historical big data for their reporting they can get the wrong picture. A good example is American Airlines. “They looked at their data and saw that no-one was using their loyalty points,” says Jane. “So it seemed a no-brainer to get rid of the scheme and its associated costs. It was a commercial disaster. What all the data and numbers weren’t telling them was that their customers loyalty relationship with the brand was not the same thing as their price relationship. Customers have several approaches to a brand and they aren’t all based on it being the cheapest.”

Jane Frost, CEO of MRS speaking at EffWeek 2016 on research and prediction
Jane Frost, CEO of MRS speaking at EffWeek 2016

Jane thinks that ethnography and behavioural science offer solutions, but are often absent as approaches from predictive research.

“If American Airlines had considered the possible impact of loss aversion for example, they might have spotted the problem,” she says. “If they had carried out some ‘ethnographic’ research on the ground with their customers, it might have revealed this hidden relationship that they had with the brand.”

“Ethnography is radical in the sense that it issues a challenge,” says Jane. “It says: ‘okay, this reports as X. But if you actually go and look at what is happening amongst real people you see that it is something different.’ It illuminates. If you rely on a pure numbers approach to prediction you exclude outsider voices – because your data is all about your customers. You run the risk of walking blindly into a future that is significantly different from the one your data projected and with no real insight into how your customers are going to behave in this new world.”

Download the MRS report: Prediction and Planning in an Uncertainty World.

Infographic – Media in Focus challenging assumptions in marketing today

An infographic exploring assumptions driving marketing in today’s digitally transformed, multi-channel world.

Drawn from Media in Focus, the new research by Les Binet and Peter Field. Their report sets out to test these assumptions and find out if mass media is really experiencing a much talked about demise and if marketing rules really have changed that much.

Are these really marketing rules?

How to measure marketing effectiveness – Infographic

‘Media in Focus’ by Les Binet and Peter Field is a masterclass in measuring the effectiveness of large-scale campaigns. The report is published on 14 June 2017 and available to buy.

In this infographic we break-down the different metrics that are used in the report to measure marketing effectiveness. They are combined to draw conclusions about the effectiveness of marketing over time. Les and Peter presented their initial findings in a presentation at Effectiveness Week 2016 under the name ‘Media in the Digital Age’.
Watch
Media in focus presentation

An essential checklist for anyone interested in understanding the true impact of their campaigns.

Online behaviour and the internet day – interactive chart

In the run-up to the publication of ‘Media in Focus’ by Les Binet and Peter Field, we take a look at one of the big changes in media consumption – the amount of time spent online, which has almost quadrupled over the last ten years.

Les and Peter presented their initial findings in a presentation at Effectiveness Week 2016 under the name ‘Media in the Digital Age’.

Recent years have seen a huge increase in the amount of time people spend online. The average adult now spends nearly 4 hours a day online.

The first chart looks at online behaviour by breaking downtime spent online into the main activities. As in real life, the online day is dominated by social interaction; the main thing that people do with their time is talking to one another. The big change here is that social media and online messaging have overtaken email as the preferred way of talking, and they now account for around 39% of time online.

Video is an increasingly important feature of social, and of internet time generally.

The second chart looks at how people are watching video, now that there are so many options available to them and compares the behaviour of young people to the whole population.

Infographic – The background to Les Binet and Peter Fields’ latest research

‘Media in Focus’ by Les Binet and Peter Field is a new research paper on marketing effectiveness published on 14 June 2017.

Les and Peter presented their initial findings in a lecture at Effectiveness Week 2016 under the name ‘Media in the Digital Age’.

You can view this infographic as a presentation here if you prefer.

What is branded content in the digital age?

Confused about what branded content is? This report by the BCMA, Oxford Brookes University and Ipsos Mori will help you to understand exactly what is meant by the term, which is often applied to wildly varying formats of marketing.

As a medium branded content has been receiving a lot of attention over the last few years, largely in response to the new ways that people can consume content. This, in turn, has fueled its rise as a new marketing communications concept, and one that many people are confused about, prompting the question, “what is branded content?”

The BCMA's definition of branded content:Branded Content is any output fully or partly funded, or at least endorsed, by the legal owner of a brand. It promotes the brand owner’s values. Audiences choose to engage with branded content based on a pull logic due to its entertainment, information and/or educational value.

At EffWeek 2017, in response to this, the BCMA launched the report Defining branded content for the digital age, authored in partnership with Oxford Brookes University and Ipsos Mori. The report evaluated existing literature and put senior marketers through in-depth interviews to find out exactly what they thought they meant by the term.

Watch a presentation of the report given during the week below.

Or, if you prefer a good read, download a copy of Defining branded content for the digital age.

It’s time marketers started measuring, not counting, social media impact

Stephen Maher is chairman of #IPASocialWorks, chairman of the Marketing Society and CEO of MBA. He argues that social media is a powerful and ever-growing influence in the lives of all brands. Its impact needs to be properly measured.

A version of this article originally appeared in Campaign.

Last year UK social media adspend grew by 45% according to the IAB and PwC. 2016 is likely to be no different and this is before earned and owned social are mixed in.

A recent survey of CMO’s in the US said it expected social media spend to be 20.9% share of marketing budgets in the next five years. However, the same annual survey reports that only 11.5% of marketing leaders believe they have proven the impact of social media quantitatively and only 3.4% say that social media contributes very highly to their business performance.

“Only 11.5% of marketing leaders believe they have proven the impact of social media”

Here is the disconnect: we know that social is today’s ascendant and tomorrow’s dominant medium. But the rigorous case law proving business value (which in other media we take for granted with over 30 years of IPA Effectiveness Awards and Marketing Society Excellence Awards) is just not there yet for social.

In short, there is still not enough “measuring” (of causal and not just correlated business return), and still too much “counting” (of intermediary measures such as likes, retweets and views).

“The rigorous case law proving business value is just not there for social.”

It is for this reason that we established #IPASocialWorks. As our academic advisor on the project Paddy Barwise, Emeritus Professor of Marketing and Management at The London Business School, says: “I’m not aware of anything elsewhere that matches its scale and quality.”

Stephen Maher speaking at Effectiveness Week 2016 on the pitfalls of measuring social media

#IPASocialWorks is the world’s first cross-industry collaboration of its kind across brands, agencies, insight specialists and social platforms to accelerate knowledge and best practice on measuring social media. An IPA, Marketing Society and MRS-led body, we are blessed with involvement from marketing leaders from ASOS, BT, O2, Transport for London, Travelex as well as Mindshare’s Simeon Duckworth, Brainjuicer’s Tom Ewing and support from Facebook and Twitter.

Our aims are threefold. First, develop a robust bank of case law proving the business impact of social on brands through campaign evaluation; social insight and personalisation. Second, launch accompanying ‘how to’ guides and bespoke training. And last but not least, spread the word as often and as globally as we can – hence our recent presence at Effectiveness Week 2016.

“To help embed this rigour into business cultures we have developed training modules and ‘how to’ guides”

So what are our results so far? We have reviewed over 250 cases and peer-reviewed over 60 of these and then selected over 20 where we can see a direct relationship between social – whether paid earned or owned – and a business return.

Many of those we’ve reviewed are falling down because they lack some effectiveness “basics” such as defined KPIs and the thinking ahead about the data required, to prove or disprove a hypothesis. This hints at underlying issues in social – such as maybe the need for more training in the rigours of marketing effectiveness. As Fran Cassidy, #IPASocialWorks project director and one of the authors of our guides, says: “The contribution from social datasets to customer understanding and the evaluation of its impact in brand communication remains patchy at best”.

Illustration - You need good data, when measuring social media real impact rather then just vanity metrics must be assessed

To help embed this rigour into business cultures, we have also developed training modules and ‘how-to’ guides which are jammed with best practice, case studies, seven-point checklists and five-point plans for how to bake social media measurement into the architecture of any marketing.

“The contribution from social datasets to customer understanding remains patchy at best”

The first guide was on evaluation; the second focussed on insight – whereas Jessica Salmon, head of research at O2 says: “As consumers’ adoption of multiple social platforms evolves and becomes more sophisticated, so must our approach – moving from simply counting ‘likes’ to understanding sentiment, context and integrating with other sources”.

And just this week we are launching a preview of our third guide on personalisation. Its author Celina Burnett, marketing analytics at Asos says: “This explores the evolution of personalisation and how brands and agencies can use social media to fuel more relevant experiences. We’ve got some great case studies included such as the BBC, O2 and Adidas which show the real breadth in approaches for how social media and social media data are being used to drive business outcomes”.

“This is no one-off wham-bam-thank-you-ma’am study”

So at #IPASocialWorks we are committed to continually learning together as social morphs excitedly every day. As the writer and behavioural change strategist Mark Earls says: “This is no one-off wham-bam-thank-you-ma’am study but a more practical body of learning which moves and evolves as the environment does (and one thing we all know is – that landscape is not going to simply shift from how it was to some simple alternative state).”

There will always be one constant in our work, however – the need to keep proving (what we know intuitively to be) social’s real business value. And that means more ‘measuring’ not ‘counting’.

Stephen Maher is chief executive of MBA; chairman of The Marketing Society and chair of #IPASocialWorks

Infographic and Report – Towards an Insight Driven Organisation

This report by the Market Research Society examines how to foster a culture of insight and use it to deliver business growth.

Download and read Towards an Insight Driven Organisation here, to find out what organisations with high-performing insight capabilities are doing right, and what the rest of them are doing wrong.

Infographic of key points from the MRS report into Insight Driven Organisations

INFOGRAPHIC & REPORT – Key Findings from Kantar Vermeer’s Marketing2020

Marketing2020 – Organising for Growth focuses on identifying how business leaders can best align their strategy, structure, and capabilities to generate business growth.

Read the Marketing2020 report brochure here for an understanding of how high-performing businesses structure themselves and their marketing function for growth.

Infographic of 3 key points from Kantar Vermeer's Marketing2020 report

INFOGRAPHIC & REPORT – Key Findings From Measuring Content Marketing by the CMA

Like many marketing disciplines, content marketing is facing a crisis of measurement.

The Effective Measurement Report looks at the areas of spend that are most troublesome to account for, building growth in the long, rather than the short term and paid, owned, earned multi-channel, multi-platform optimisation.

Read the full report here.

Effectiveness Week Infographic from the Content Marketing Association's report 'Measuring Content Marketing Effectiveness'

Infographic and Report – Selling Creativity Short

The dual impacts of short-termism in marketing and lower investment behind creativity have halved the success of creativity over a period of just four years.

Selling Creativity Short is Peter Fields’ 2015 report on the effects of short-termism on marketing and is an essential read.

Infographic showing key findings from Selling Creativity Short