peter field - ipa databank
DESCRIPTION
Marketing Effectiveness in the Data AgeTRANSCRIPT
Effectiveness in the data age
November 3rd 2011
This Presentation
• What drives effectiveness and what should we measure? • Why some metrics and analytics are damaging to
effectiveness • The ultimate data challenge: the dominant driver of
effectiveness is usually ignored • What can we do about this?
Our main sources
• IPA dataBANK - 929 case studies - 30 years of data
• Nielsen analysis of 30 UK packaged goods categories - 123 brands
• World’s leading database on creativity
• World’s leading global case study database
The measures of business success
• Effectiveness measured in terms of business results, not prizes.
• Key metrics: – Effectiveness Success Rate.
% cases showing very large effects across a range of business metrics, from sales to profit.
– Efficiency points of market share growth per 10 points of Extra Share of Voice (ESOV). ESOV = SOV minus SOM
What drives effectiveness and what should we measure?
Broad findings from the IPA Databank
There is more to growth than volume
5%
26% 22%
63%
36%
25% 19% 20%
0%
10%
20%
30%
40%
50%
60%
70%
Price sensitivity Share growth Share defence Sales growth
Campaign objective
Price is the key to profit
Incidence
Very large profit growth
Build advocacy not loyalty
Common practice...
7%
13%
21%
0%
5%
10%
15%
20%
25%
Increase
loyalty
Increase
penetration
Increase both
Campaign objective
Incid
en
ce
...is not best practice
27%
73%
82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Increase loyalty Increase
penetration
Increase both
Campaign objective
Eff
ec
tiv
en
es
s s
uc
ce
ss
rate
The myth of loyalty
Awareness, image & short-term responses are over-rated
61% 55%
46%
33%
67% 68% 67%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Awareness Image Direct Fame Campaign objective
The most popular objectives are not the most effective
Incidence
Effectiveness success rate
Share of voice is still crucial
The concept of equilibrium SOV
Source: Marketing in the era of Accountability
How ‘extra’ share of voice drives growth
-40%
-20%
0%
20%
40%
60%
80%
100%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
Mar
ket
shar
e g
ain
(%
poi
nts
)
ESOV (SOV-SOM)
Market share growth vs 'extra' share of voice
The advantage of brand leadership
1.4%
0.4%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
FMCG Brand Leaders FMCG Challenger Brands
Mkt
sha
re g
ain
per 1
0% p
oint
s ES
OV
(% p
oint
s)
The difference between average strategy and ‘best in class’
0.5%
0.8%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
FMCG Nielsen Average FMCG IPA Average
Mkt
sha
re g
ain
per 1
0% p
oint
s ES
OV
(% p
oint
s)
The difference between traditional and multi-channel campaigns
1.1%
2.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Traditional advertising alone Advertising plus other channels
Mkt
sha
re g
ain
per 1
0% p
oint
s ES
OV
(% p
oint
s)
Communications channels used
TV enhances campaign efficiency
0.9%
0.5%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
1.0%
Campaigns using TV Campaigns not using TV
Effic
ienc
y: M
kt s
hare
gai
n pe
r 10%
po
ints
ESO
V (%
poi
nts)
Campaigns 2004-2010
On-line enhances TV effectiveness
63% 71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Campaigns using TV without on-line Campaigns using TV + on-line
Effe
ctiv
enes
s su
cces
s ra
te %
Why some metrics can be damaging to effectiveness
How campaigns drive growth
Communications strategies
• Effective campaigns aim to change behaviour.
• Some try to do this in a primarily rational way, some primarily use emotions, and some use both.
• Rational campaigns are the most common, but…
Emotional strategies are more profitable
16%
26%
30%
0%
5%
10%
15%
20%
25%
30%
35%
Emotional Combined Rational
Campaign strategy
V l
arg
e p
rofi
t g
ain
s (
% r
ep
ort
ing
)
Emotional campaigns outperform on almost every metric
…yield stronger business results
28%
11%
4%
31%
56%
26%
5%2%
27%
47%
0%
10%
20%
30%
40%
50%
60%
Sales Share Price
elasticity
Loyalty Penetration
Metric
Very
larg
e e
ffect
rep
ort
ed
%
Emotionalcampaigns
Rational campaigns
…build stronger brands
40%
32%
28%
20% 22%
14%
6%
34%
13% 13%
8%
13% 12%
5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Awareness Fame Differentiation Commitment Image Quality Trust
Very
larg
e ef
fect
repo
rted
%
Metric
Emotional campaigns
Rational campaigns
The dangerous exception
38%35%
28%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Emotional Combined Rational
Campaign strategy
V la
rge
shor
t ter
m d
irec
t eff
ects
(% r
epor
ting)
The most powerful strategy?
34%
28% 26%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Fame Emotional involvement
Combined emotional & rational
Any rational
Very
larg
e pr
ofit
gain
s (%
repo
rtin
g)
Communications strategy
The power of Fame
34%
6%
53%
13%
32%
22%
3%
50%
9%
30%
0%
10%
20%
30%
40%
50%
60%
Profit Price sensitivity
Sales Loyalty Penetration
% a
chie
ving
ver
y la
rge
effe
ct
Business metric
Fame campaigns achieve broader business success
Fame campaigns
Other campaigns
Fame campaigns are more efficient
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-40% -20% 0% 20% 40% 60% 80% 100%
SOM growth
ESOV
Fame campaigns are 2.3 times more efficient
Other campaigns
Fame campaigns
Implication for targeting
• Fame is the antithesis of tight targeting – ‘waste’ can be good
• By getting a brand and its marketing talked about: – Give the brand a sense of stature and authority beyond its actual
size – Turn consumers into brand advocates
The ultimate data challenge
The dominant driver of effectiveness
The impact of creativity
• 16 years of data – 367 campaigns – 65 creatively awarded – 20% international
• Comparison of the efficiency of creatively awarded vs non-awarded campaigns
How ESOV drives growth: overall efficiency for the sample
On average 1.3 points of share growth per 10 points of ESOV
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
SOM growth
ESOV
How ESOV drives market share growth
99% confidence
Efficiency of non-creatively awarded cases
On average 0.8 points of share growth per 10 points of ESOV
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
SOM growth
ESOV
Efficiency of non-awarded campaigns
99.7% confidence
Efficiency of creatively awarded campaigns
On average 5.4 points of share growth per 10 points of ESOV
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
SOM growth
ESOV
Efficiency of creatively awarded campaigns
99.9% confidence
The power of creativity is clear
~7:1 advantage in terms of efficiency
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
SOM growth
ESOV
Comparison of the efficiency of awarded and non-awarded campaigns
Creatively awarded
Non-creatively awarded
Non-awarded campaigns are becoming less efficient
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
SOM growth
ESOV
The efficiency of non-awarded campaigns has fallen over time
Pre 2004
2004 & post
Whereas awarded campaigns are becoming more efficient
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
SOM growth
ESOV
The efficiency of creatively-awarded campaigns has risen over time
Pre 2004
2004 & post
Now ~12:1 advantage in terms of efficiency
How does creativity appear to work?
0%!10%!20%!30%!40%!50%!60%!70%!80%!90%!
100%!
Creatively awarded
Non-awarded
47% 35%
33%
31%
19% 34%
Pro
port
ion
of a
ll ca
ses
Communications model
Awarded campaigns are more likely to be emotional
Rational
Combined
Emotional
How does creativity appear to work?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Fame Awareness
48%
23% 25% 25%
Perc
enta
ge re
port
ing
very
larg
e ef
fect
s
Creatively awarded
Non-awarded
+ -
So why is creativity getting more important?
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pre 2004 2004 & post
28%
70%
18%
29%
% re
port
ing
very
larg
e fa
me
effe
cts
The widening fame gap
Creatively awarded
Non-awarded
The creative fame journey – the growing challenge for
measurement
The multi-channel idea makes non-holistic measurement irrelevant
The creative fame journey
• From relying entirely on the popularity of great work to drive fame…
• To developing on-line ‘collateral’ to drive and exploit the fame potential of a great idea
Mercedes Germany
Barclaycard
Barclaycard
Gillette India
Yellow Pages NZ
Source: CAANZ
What can we do about it?
Common practice
• Measure volume
• Measure loyalty
• Measure brand awareness
• Measure immediate response
• Promote rational communication
• Suspicious of creative awards
Best practice
• Measure price elasticity
• Measure advocacy
• Measure brand fame
• Measure long term effects
• Promote emotional engagement
• Reward creative awards
Further reading
Thank you