With their previous volumes becoming landmarks in using evidence-based marketing science to drive profitable brand growth, it’s no surprise that Les Binet and Peter Field have been named the ‘Godfathers of Marketing Effectiveness’. Their latest study, presented at this month’s IPA Effectiveness Week, looks to be just as important.
Unveiling the initial findings from their third volume, Media in the Digital Age, Binet began by dismissing the concept that brands grow through loyalty. Penetration works far better – of the cases on the IPA database showing growth, only 7% are growing through a loyalty strategy compared to 22% through penetration.
This requires a paid media approach – average share of market growth per annum is just 0.9% for unpaid online campaigns, versus 2.6% for paid-for media. For growth, you need not only place content, but also pay to bring it to people’s attention.
By looking at the thousands of cases in the IPA databank, Binet and Field uncovered what is driving this profitable brand growth – i.e. effectiveness – in a digital age.
Thanks to the impact of the internet, advertisers need scale, which means online video and TV, not either/or. Online video-only campaigns saw a 25% increase in very large business effects. TV-only campaigns saw a 33% jump. For campaigns which did both, the increase was over 50%.
Budgets matter more than they used to. The proportion of growth explained by share of voice is getting stronger, doubling from 6% to 12% for campaigns between 2008-2016 compared to 1998-2006.
Mass media is working better than ever. Adding TV to a non-TV campaign has always paid dividends in terms of the effects on business. But this ‘TV boost’ is growing – since 2008, adding TV as a channel has seen a 40% boost.
This makes it all seem easy – keep using paid media and mix online video and TV to drive share of voice, and growth will follow.
But it’s not that simple. While the effectiveness of some strategies is clear, the number of large business effects achieved by campaigns has decreased sharply since 2012. Why the performance decline? Binet and Field pointed to four factors:
– Increasing focus on the short-term (8% of cases in 2006 had a short-term focus vs 25% in 2016).
– Greater proportions of the budget spent on activation rather than brand building (31% in 2014 vs 47% in 2016). The most efficient campaigns still adhere to the 60-40 rule: 60% on brand-building, 40% on activation.
– Greater focus on ROI/ROMI, which is a risky strategy in the long-term. ROI rewards sales activation strategies, but not what will happen in terms of the brand over the next few years.
– A worrying trend in ESOV decline – from 13 percentile points in 2006 to 3 in 2016. Brands are letting campaigns take the strain, not backing great creative work.
Binet highlighted the findings as “empirical evidence that our industry is focusing too much on the short term”. His rallying cry was that, “for truly effective advertising, we must continue to invest more in long-term brand building”.