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Marketing effectiveness 2019 Wim Vermeulen and Peter Field Part 1

Presentation for the Marketing Effectiveness 2019 event of BAM on February 5th, 2019.
The post-truth world has engulfed marketing. The self-appointed apostles of the digital revolution have led us badly astray; even the Mad Men and Women have lost the plot.
A counter revolution is underway, we call it the evidence-based way. Come along and hear what Wim and Peter have to say about what has gone wrong and what needs to change.

Peter Field explains why the current marketing model is broken and makes the case for getting back to marketing effectiveness, Wim Vermeulen talks about the way forward and examines today's most effective communication model and the TapForward effect.

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Marketing effectiveness 2019 Wim Vermeulen and Peter Field Part 1

  1. 1. MARKETING EFFECTIVENESS Getting the balance right in 2019
  2. 2. My evidence base How does the context the brand operates in influence strategy? 500 digital era cases
  3. 3. Short-termism is killing effectiveness 0% 5% 10% 15% 20% 25% 30% 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2002 2004 2006 2008 2010 2012 2014 2016 %casesshort-term Avg.no.VLbusinesseffects 6 years ending Effectiveness % short-term Source: IPA Databank, 1998-2016 for-profit cases
  4. 4. What does the new short-termism look like?
  5. 5. Salesupliftoverbase Time Source: Binet & Field 2013 The deception of the short-term model Sales activation Short term sales uplifts only
  6. 6. Salesupliftoverbase Time Source: Binet & Field 2013 The deception of the short-term model Sales activation Short term sales uplifts only Brand building Long term sales growth Growing pricing power Short term effects dominate ~6 months
  7. 7. 4 wrong assumptions at work 1. Targeting people at the moment of purchase is best 2. Tight targeting is better than broad reach 3. Relevance beats brand-building and creativity 4. Big data makes brand building irrelevant
  8. 8. 1. The moment of purchase is too late
  9. 9. You need brand and activation 0.8 1.5 2.0 2.4 0.0 0.5 1.0 1.5 2.0 2.5 Low Brand, Low Activation Low Brand, High Activation High Brand, Low Activation High Brand, High Activation Numberofverylargebusinessfx Balance of brand and activation effects Source: IPA Databank, 1998-2016 for-profit cases, based on scale of activation effects and number of brand effects
  10. 10. Brand building boosts short-term effects 17% 36% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 1 ≥2 %Reportingverylargeactivationfx. Number of very large brand effects reported Source: IPA Databank, 1998-2016 for-profit cases
  11. 11. Brand is the key to premium pricing 0% 2% 4% 6% 8% 10% 12% 0 1 2 3+ %Reportingverylarge pricesensitivityreduction Number of very large brand effects recorded Source: IPA Databank, 1998-2016 for-profit cases
  12. 12. The moment of purchase is too late
  13. 13. 2 Tight targeting doesn’t work in the long term
  14. 14. “Market share increases depend on substantially growing the size of your customer base.”
  15. 15. 1-1 at scale is no substitute for brand building 0% 10% 20% 30% 40% 50% 60% 70% 80% Did use Did not use Verylargeactivationeffects Use of Big Data for real-time marketing 1-1 at scale drives short-term activation 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% Did use Did not use Annualmarketsharegrowth Use of Big Data for real-time marketing Broad early targeting drives long- term growth Source: IPA Databank, 2014-16 cases
  16. 16. “We targeted too much, and we went too narrow…The bigger your brand, the more you need broad reach and less targeted media.” Marc Pritchard, CMO P&G Wall Street Journal, Aug. 17, 2016
  17. 17. Tight targeting doesn’t work
  18. 18. 3. Fame (TapForward) and Creativity beat everything
  19. 19. The Rational model doesn’t work as hard 0.2 1.0 1.3 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Rational Emotional Fame (TapForward) SOVefficiency Source: IPA Databank, 2004-16 cases
  20. 20. What drives fame? Source: Unruly / IPA Databank Unruly advertising response metric (top 5 correlations) Correlation with fame (TapForward) effects Shock 28% Surprise 27% Amazement 14% Disgust 11% Hilarity 10%
  21. 21. What doesn’t drive fame? Source: Unruly / IPA Databank Unruly advertising response metric (top 5 correlations) Correlation with fame (TapForward) effects Shock 28% Surprise 27% Amazement 14% Disgust 11% Hilarity 10% # 17 correlation of 18 Knowledge -13% Unruly advertising response metric (top 5 correlations) Correlation with fame (TapForward) effects Shock 28% Surprise 27% Amazement 14% Disgust 11% Hilarity 10%
  22. 22. Creativity amplifies fame 0% 10% 20% 30% 40% 50% Creatively awarded Non-awarded Verylargefameeffects
  23. 23. The more creative the better 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Highly creatively awarded (4+) Less creatively awarded (1-3) Not creatively awarded SOVefficiency
  24. 24. “Shit that arrives at the speed of light is still shit”
  25. 25. Creativity beats everything
  26. 26. 4. Brand building is getting more important
  27. 27. Brand-Activation balance matters 0 0.5 1 1.5 2 0 10 20 30 40 50 60 70 80 90 100 Numberofbusinesseffectsreported % Budget allocated to brand building Source: IPA Databank, 1998-2016 for-profit cases Peak at 62% brand 20% loss of effectiveness Brand remains strong 56% loss of effectiveness Brand weakens
  28. 28. 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 OptimumBrand/activationsplit Nature of purchase decision Activation Brand Source: IPA Databank, 1998-2016 for-profit cases
  29. 29. When brand building is easy, up-weight activation 76 55 24 45 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Low High OptimumBrand/activationsplit Role of emotions in purchase decision Activation Brand Source: IPA Databank, 1998-2016 for-profit cases
  30. 30. Up-weight brand in Financial Services, down-weight brand in Other Services 58 60 80 51 64 42 40 20 49 36 0 10 20 30 40 50 60 70 80 90 100 Durables FMCG Financial services Other services Retail Optimumbudgetsplit% Activation Brand Source: IPA Databank, 1998-2016 for-profit cases
  31. 31. 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 VLargeActivationfx. 55 74 45 26 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Offline brand Online brand Brrand/activationoptimum Activation Brand
  32. 32. Brand building is becoming more important, not less 55 57 63 76 45 43 37 24 0 10 20 30 40 50 60 70 80 90 100 98 to 10 00 to 12 02 to 14 04 to 16 Optimumbudgetsplit% Period Activation Brand Source: IPA Databank, 1998-2016 for-profit cases
  33. 33. 61% 39% UK advertising spend split, 2000 Share of display Share of direct response Source: Enders Analysis estimates based on AA/WARC The tide of short-term activation spend From: ‘Advertising after the turning point’ [Enders Analysis June 2018] 45% 55% UK advertising spend split, 2017
  34. 34. The damage mirrors short-termism -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 0% 50% 100% 150% 200% 250% 300% 350% Lossofeffectiveness2014-16vs.2006-08 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
  35. 35. 5. The way forward: getting the balance right brings big rewards AA Roadside recovery Churchill insurance
  36. 36. Abandoning the brand: AA Roadside Assistance
  37. 37. The damage done to the AA brand
  38. 38. The damage done to AA search response
  39. 39. The damage done to AA pricing
  40. 40. 42% 42% 40% 40% 39% 39% 2011 2012 2013 2014 2015 2016 2017 Shareofmembership(%) Year The damage done to AA market share SOURCE:AA Complete collapse predicted in five years
  41. 41. Reversing the damage to the AA Brand
  42. 42. Reversing the damage to the AA Brand
  43. 43. 42% 42% 40% 40% 39% 39% 42% 2011 2012 2013 2014 2015 2016 2017 YTD Shareofmembership(%) Year AA market share recovered rapidly SOURCE:AA 2017 ads Brand metrics improved Branded searches increased Acquisition increased Retention increased Despite less discounting Policy pricing increased by 5%
  44. 44. Churchill Insurance: the value of a brand in a market dominated by price comparison sites
  45. 45. Churchill brand effect Source: Direct Line Group IPA case study 2018 Churchill’s brand equity delivered a price premium in the £10-20 range
  46. 46. Why TV? “We could find compelling evidence for both the long-term and short-term effectiveness of media lines such as TV and radio. By contrast, our research did not support continued investment in a number of programmatic digital media lines even on a short- term basis.” Direct Line Group 2018 IPA case study
  47. 47. How do we restore effectiveness? • Rebalance expenditure back to brand building and established brand media. • As resistance to data gathering and usage grows, repurpose data from last minute targeting to strategic brand insight • Invest in creativity and fame (TapForward) • Stop measuring shit at the speed of light
  48. 48. 2019 has to be smarter than this Thank you

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