previous research and this · 3/27/2019 · source: ipa databank, 1998-2016 for-profit cases,...
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Previous research and this
How does the context the brand operates in influence strategy?
500 digital era for-profit cases
120 not-for-profit cases
Sale
s u
plif
t o
ver
bas
e
TimeSource: Binet & Field 2013
Two ways marketing works
Sales activationShort term sales uplifts
Brand buildingLong term sales growth
Short term effects dominate ~6 months
Brand and activation work in synergy
0.8
1.5
2.0
2.4
0.0
0.5
1.0
1.5
2.0
2.5
Low Brand, LowActivation
Low Brand, HighActivation
High Brand, LowActivation
High Brand, HighActivation
Nu
mb
er
of
very
larg
e b
usi
ne
ss f
x
Balance of brand and activation effectsSource: IPA Databank, 1998-2016 for-profit cases, based on scale of activation effects and number of brand effects
Brand building boosts short-term effects
17%
36%
42%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0 1 ≥2
% R
ep
ort
ing
very
larg
e a
ctiv
atio
n f
x.
Number of very large brand effects reportedSource: IPA Databank, 1998-2016 for-profit cases
The principles of balance
Brand-Activation balance matters
0
0.5
1
1.5
2
0 10 20 30 40 50 60 70 80 90 100
Numberofbusinesseffectsreported
%Budgetallocatedtobrandbuilding
Source: IPA Databank, 1998-2016 for-profit cases
Peak at 62% brand
20% loss of effectivenessBrand remains strong
56% loss of effectivenessBrand weakens
When activation is easy, up-weight brand
61 69
39 31
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Low consideration High consideration
Op
tim
um
Bra
nd
/act
ivat
ion
sp
lit
Nature of purchase decision
Activation
Brand
Source: IPA Databank, 1998-2016 for-profit cases
When brand building is easy, up-weight activation
7655
2445
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Low High
Op
tim
um
Bra
nd
/act
ivat
ion
sp
lit
Role of emotions in purchase decision
Activation
Brand
Source: IPA Databank, 1998-2016 for-profit cases
Flexing the rules by context
Factors that modify the rules
Online research makes activation easier
Source: IPA Databank, 1998-2016 for-profit cases
27%
32%
0%
5%
10%
15%
20%
25%
30%
35%
Low research High research
V L
arge
Act
ivat
ion
fx
55
74
45
26
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Low research High research
Brr
and
/act
ivat
ion
op
tim
um
Online selling makes activation easier
Source: IPA Databank, 1998-2016 for-profit cases
30%
40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Offline brand Online brand
V L
arge
Act
ivat
ion
fx.
55
74
45
26
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Offline brand Online brand
Brr
and
/act
ivat
ion
op
tim
um
Subscription makes activation easier
Source: IPA Databank, 1998-2016 for-profit cases
31%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Series Subscription
V L
arge
Act
ivat
ion
fx.
57
74
43
26
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Series Subscription
Brr
and
/act
ivat
ion
op
tim
um
Innovation makes activation easier
Source: IPA Databank, 1998-2016 for-profit cases
28%
40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
No innovation Any innovation
V L
arge
Act
ivat
ion
fx.
6172
3928
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No innovation Any innovation
Brr
and
/act
ivat
ion
op
tim
um
Brand effects are biggest for new brands
Source: IPA Databank, 1998-2016 for-profit cases
1.9
1.6
0.0
0.5
1.0
1.5
2.0
New brand Established brand
Nu
mb
er
of
Bra
nd
fx.
5663
4437
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
New brand Established brand
Brr
and
/act
ivat
ion
op
tim
um
Activation gets easier as brands grow
Source: IPA Databank, 1998-2016 for-profit casesBig brands = Top 33% by market share
28%30%
0%
5%
10%
15%
20%
25%
30%
35%
Average brand Big brand
V L
arge
Act
ivat
ion
fx.
6276
3824
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Average brand Big brand
Brr
and
/act
ivat
ion
op
tim
um
Brand is the key to premium pricing
5764
4336
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Value/mid-market Premium
Source: IPA Databank, 1998-2016 for-profit cases
0%
2%
4%
6%
8%
10%
12%
0 1 2 3+
% R
epo
rtin
g ve
ry la
rge
pri
ce s
en
siti
vity
red
uct
ion
Number of very large brand effects recorded
How does this affect sectors?
Brand building always drives long-term effectiveness
0.9 0.90.8
1.0
0.7
1.31.2
1.6 1.61.6
2.5
2.0 2.1
1.8
2.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Durables FMCG Financial services Other services Retail
Nu
mb
er
of
very
larg
e b
usi
ne
ss f
x.
Sector
Number of brand effects reported
0 1 ≥2
Source: IPA Databank, 1998-2016 for-profit cases
Brand & Activation potential vary widely
31%
26%
36%
44%
30%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Durables FMCG Financialservices
Otherservices
Retail
Ver
y la
rge
acti
vati
on
fx.
Short-term activation effects
Source: IPA Databank, 1998-2016 for-profit cases
2.1
1.7 1.61.8
1.0
0.0
0.5
1.0
1.5
2.0
2.5
Durables FMCG Financialservices
Otherservices
Retail
Nu
mb
er o
f ve
ry la
rge
bra
nd
fx.
Brand effects
Up-weight brand in Financial Services, down-weight brand in Other Services
58 6080
5164
42 4020
4936
0
10
20
30
40
50
60
70
80
90
100
Durables FMCG Financial services Other services Retail
Op
tim
um
bu
dge
t sp
lit % Activation
Brand
Source: IPA Databank, 1998-2016 for-profit cases
What about the NFP sector?
43 44 44
57 56 56
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Charities Government All NFP
Op
tim
um
bu
dge
t sp
lit
Activation
Brand
Source: IPA Databank, 2012-2016 not-for-profit cases
Brand building is becoming more important, not less
55 57 6376
45 43 3724
0
10
20
30
40
50
60
70
80
90
100
98 to 10 00 to 12 02 to 14 04 to 16
Op
tim
um
bu
dge
t sp
lit %
Period
Activation
Brand
Source: IPA Databank, 1998-2016 for-profit cases
The activation tide varies across sectors
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
0% 50% 100% 150% 200% 250% 300% 350%
Loss
of
effe
ctiv
enes
s 2
01
4-1
6 v
s. 2
00
6-0
8
Growth of short-termism 2014-16 vs. 2006-08
76% Correlation
Other services
Financial services
Durables
FMCG
Retail
Source: IPA Databank, 2006-2016 for-profit cases
Reversing the activation tide
Case study: AA Roadside Assistance
• Brand activity cut in favour of “hard working” activation• Initial discounts used to entice new members• Renewal price hikes used to make up profit• Highly profitable in the short term, but…
• Brand metrics in free fall• Whole category becoming commoditised• Angry customers, churn increasing• Bigger and bigger discounts required• Market share declining• Complete collapse predicted in five years
AA “Singing Baby” TVC
AA “Singing Baby” TVC
42%42%
40%
40%
39%
39%
42%
2011 2012 2013 2014 2015 2016 2017 YTD
Shar
e o
f m
em
be
rsh
ip (
%)
Year
The decline in market share reversed immediately
SOURCE: AA
2017 ads
Brand metrics improvedBranded searches increased
Acquisition increasedRetention increased
Despite less discounting
Conclusions
• Invest more in brand building where activation is easy• Invest more in activation where brand building is easy• Activation is getting easier so brand building is becoming
more important: the 60:40 rule is shifting further to brand• This is making brand-building media more important• The trend in investment is away from brand: some sectors
& contexts are already strongly out of balance• We urgently need to restore balance: allocate the
recommended balance for your brand’s context
Thank you