Marketing effectiveness 2019 Wim Vermeulen and Peter Field Part 1

MARKETING
EFFECTIVENESS
Getting the balance right in 2019

My evidence base
How does the
context the brand
operates in
influence strategy?
500 digital era
cases

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

What does the new short-termism
look like?

Salesupliftoverbase
Time
Source: Binet & Field 2013
The deception of the short-term model
Sales activation
Short term sales uplifts only

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

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

1. The moment of purchase is too late

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

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

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

The moment of purchase is too late

2 Tight targeting doesn’t work
in the long term

“Market share increases depend on substantially
growing the size of your customer base.”

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

“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

Tight targeting doesn’t work

3. Fame (TapForward) and Creativity beat
everything

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

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%

What doesn’t drive fame?
Source: Unruly / IPA Databank
Unruly advertising
response metric
Shock 28%
Surprise 27%
Amazement 14%
Disgust 11%
Hilarity 10%
# 17 correlation of 18
Knowledge -13%
Unruly advertising
response metric
Shock 28%
Surprise 27%
Amazement 14%
Disgust 11%
Hilarity 10%

Creativity amplifies fame
0%
10%
20%
30%
40%
50%
Creatively awarded Non-awarded
Verylargefameeffects

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

“Shit that arrives at the
speed of light is still shit”

4. Brand building is getting more
important

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
Peak at 62% brand
20% loss of effectiveness
Brand remains strong
56% loss of effectiveness
Brand 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
OptimumBrand/activationsplit
Nature of purchase decision
Activation
Brand

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

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

Online selling makes activation easier
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

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

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

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

5. The way forward: getting the balance right
brings big rewards
AA Roadside recovery
Churchill insurance

Abandoning the brand:
AA Roadside Assistance

The damage done to the AA brand

The damage done to AA search response

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

Reversing the damage to the AA Brand

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%

Churchill Insurance: the value of a brand in a
market dominated by price comparison sites

Churchill brand effect
Source: Direct Line Group IPA case study 2018
Churchill’s brand equity delivered a price premium in the £10-20 range

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

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

2019 has to be smarter than this
Thank you

Marketing effectiveness 2019 Wim Vermeulen and Peter Field Part 1

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