1.
Maximising Efficiency
Key learning from the IPA Databank

2.
• Analysis of 996 IPA cases
over 30 years.
• Covers 700 brands in 83
categories.
• Identifies the ingredients
for effectiveness, over the
short and long term.
• “Effectiveness” measured in
hard business terms.

3.
“Long-term results cannot be achieved by
piling short-term results on short-term
results.”
Peter Drucker, 1993

4.
This presentation
• 5 drivers of efficiency
• 5 implications for performance measurement

5.
What do we mean by efficiency?
0%
2%
4%
6%
8%
10%
12%
0% 2% 4% 6% 8% 10% 12%
Shareofvoice
Share of market
SOV > SOM: brands tend to grow
SOV < SOM: brands tend to shrink
Equilibrium: SOV = SOM

6.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
-20% 0% 20% 40% 60% 80% 100%
AnnualMarketShareGain
ESOV (SOV minus SOM)
What do we mean by efficiency?
Share growth α 0.04 x ESOV
Above average
Below average
Growth
Investment

7.
Drivers of efficiency

8.
1. Balanced campaign of long-term brand-
driven growth and short-term activation
The 60:40 rule

9.
Salesupliftoverbase
Time
Sales activation
Big direct effect,
but decays quickly. Brand building
Smaller effect
on all metrics.
Decays slowly.
Two ways marketing can affect sales

10.
Salesupliftoverbase
Time
Sales activation
Short term sales uplifts,
but no long term growth
Brand building
Long term sales growth
Brand building drives long-term growth
Short term effects dominate ~6 months

11.
Different time-frames favour different strategies
0%
10%
20%
30%
40%
50%
60%
0-3 months 3-6 months 6+ months
Sharegrowtheffects
Campaign evaluation period
ADMA data
Brand-
building
Activation

12.
For maximum profit, you need both
0%
5%
10%
15%
20%
25%
30%
Brand buiding Both Sales activation
Profiteffect
Campaign objectives

13.
For maximum efficiency, you need both
0.0
0.1
0.2
0.3
0.4
0.5
Brand buiding Both Sales activation
ESOVEfficiency
Campaign objectives

14.
Balance is important to effectiveness

15.
Balance is very important to efficiency
Optimum: ~35%

16.
Balance is very important to efficiency
The 60:40 rule
Brand:Activation

17.
2. Pricing effects

18.
Volume is not enough
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Neither Sales/share only Price only Both
Profiteffect
Improvements reported in…

19.
Volume is not enough
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Neither Sales/share only Price only Both
ESOVEfficiency
Improvements reported in…
Insufficient data

20.
But price effects are long term
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
3 months 6 months 1 year 2 years 3 years
Pricingeffect
Campaigns periods up to

21.
Brand building is key to lower price sensitivity
0%
2%
4%
6%
8%
10%
12%
0 1 2 3 4+
Priceeffect
Number of brand metrics improved

22.
3. Emotional engagement

23.
Emotional campaigns work harder
0%
2%
4%
6%
8%
Rational Combined Emotional
Price effect
NONE
0.0
0.1
0.2
0.3
0.4
0.5
0.6
Rational Combined Emotional
ESOV Efficiency

24.
4. Fame

25.
Fame drives volume and pricing
0.0
0.5
1.0
1.5
2.0
Fame
campaigns
Other
campaigns
SOV Efficiency
0%
2%
4%
6%
8%
10%
Fame
campaigns
Other
campaigns
Price effect
4:1

26.
5. Creativity

27.
Creativity amplifies fame
0.0
1.0
2.0
3.0
4.0
Creatively
awarded
Not creatively
awarded
SOV Efficiency
0%
2%
4%
6%
8%
10%
Creatively
awarded
Not creatively
awarded
Price effect
10:1

28.
And creativity is getting more efficient
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Up to 2002 Post 2002
ESOVefficiency

29.
Implications for performance
measurement

30.
A challenge for performance measurement
19%
31%
27% 26%
35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Creatively
awarded
Not creatively
awarded
Emotional
campaigns
Fame
campaigns
Rational
campaigns
Short-termactivationeffects

31.
Pre-testing has promoted short-term effects
-15%
-10%
-5%
0%
5%
10%
15%
≤ 6 months 1 year 2+ years
Uplifttocampaignsaleseffects
pretestedminusnon-pretested
Campaign duration

32.
Balancing the metrics
1. Beware of quarterly sales measures or shorter-term
activation sales as a sole measure of success: balance short
term sales responses with long-term metrics:
– Year-on-year sales uplifts – econometrics will help
apportion these to the campaign
– Annualised efficiency – ESOV is not a short-term metric
– Price elasticity - econometrics will be needed

33.
Balancing the metrics
2. Beware persuasion scores as a sole measure of success:
balance these with emotional responses and emotional
brand equity shifts: these relate to long-term effects
3. Measure buzz and advocacy
4. Encourage creativity – reward major achievements
5. Aim for a balanced scorecard of a wide range of short and
long-term metrics – the more metrics, the more reliable the
indication.

34.
www.ipa.co.uk/content/the-long-and-the-short-of-it
Thank you