Marketing Effectiveness in the Data Age

1. Effectiveness in the data age
November 3rd 2011

2. 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?

3. 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

4. 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

5. What drives effectiveness and
what should we measure?
Broad findings from the IPA Databank

6. There is more to growth than
volume
Price is the key to profit
70%
60% 63%
50% Incidence
40%
30% 36% Very large profit
growth
20% 26% 25%
22% 20%
19%
10%
5%
0%
Price sensitivity Share growth Share defence Sales growth
Campaign objective

7. Build advocacy not loyalty
The myth of loyalty
Common practice... ...is not best practice
25% 90%
Effectiveness success
80%
20% 70% 82%
60% 73%
Incidence
15%
21%
50%
rate
40%
10%
13% 30%
5% 20%
7%
10% 27%
0% 0%
Increase Increase Increase both Increase loyalty Increase Increase both
loyalty penetration penetration
Campaign objective Campaign objective

8. Awareness, image & short-term
responses are over-rated
The most popular objectives are not the most effective
80%
70% 78%
67% Incidence
60% 67% 68%
61%
50%
55%
40% 46% Effectiveness
success rate
30% 33%
20%
10%
0%
Awareness Image Direct Fame
Campaign objective

9. Share of voice is still crucial

10. The concept of equilibrium SOV
Source: Marketing in the era of Accountability

11. How ‘extra’ share of voice drives
growth
Market share growth vs 'extra' share of voice
100%
Market share gain (% points)
80%
60%
40%
20%
0%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
ESOV (SOV-SOM)
-20%
-40%

12. The advantage of brand leadership
1.6%
1.4%
Mkt share gain per 10% points
1.2% 1.4%
ESOV (% points)
1.0%
0.8%
0.6%
0.4%
0.2% 0.4%
0.0%
FMCG Brand Leaders FMCG Challenger Brands

13. The difference between average
strategy and ‘best in class’
0.9%
Mkt share gain per 10% points
0.8%
0.7% 0.8%
ESOV (% points)
0.6%
0.5%
0.4% 0.5%
0.3%
0.2%
0.1%
0.0%
FMCG Nielsen Average FMCG IPA Average

14. The difference between traditional
and multi-channel campaigns
3.0%
Mkt share gain per 10% points ESOV
2.5%
2.5%
2.0%
(% points)
1.5%
1.0%
1.1%
0.5%
0.0%
Traditional advertising alone Advertising plus other channels
Communications channels used

15. TV enhances campaign efficiency
Campaigns 2004-2010
1.0%
Efficiency: Mkt share gain per 10%
0.9%
0.9%
points ESOV (% points)
0.8%
0.7%
0.6%
0.5%
0.4% 0.5%
0.3%
0.2%
0.1%
0.0%
Campaigns using TV Campaigns not using TV

16. On-line enhances TV effectiveness
80%
70%
Effectiveness success rate %
71%
60%
63%
50%
40%
30%
20%
10%
0%
Campaigns using TV without on-line Campaigns using TV + on-line

17. Why some metrics can be
damaging to effectiveness
How campaigns drive growth

18. 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…

19. Emotional strategies are more
profitable
35%
V large profit gains (% reporting)
30%
30%
25%
26%
20%
15%
16%
10%
5%
0%
Emotional Combined Rational
Campaign strategy
Emotional campaigns outperform on almost every metric

20. …yield stronger business results
60%
Very large effect reported %
56%
50%
47% Emotional
40%
campaigns
30%
31% Rational campaigns
28%
27% 26%
20%
10%
11%
2%
4% 5%
0%
Sales Share Price Loyalty Penetration
elasticity
Metric

21. …build stronger brands
45%
40%
Very large effect reported %
40% Emotional campaigns
35%
Rational campaigns
30% 34%
32%
25% 28%
20% 22%
20%
15%
13% 13% 14%
10% 13% 12%
5% 8% 6%
5%
0%
Awareness Fame Differentiation Commitment Image Quality Trust
Metric

22. The dangerous exception
40%
V large short term direct effects
35% 38%
35%
30%
(% reporting)
25% 28%
20%
15%
10%
5%
0%
Emotional Combined Rational
Campaign strategy

23. The most powerful strategy?
40%
Very large profit gains (% reporting)
35%
30%
34%
25% 28%
26%
20%
15%
16%
10%
5%
0%
Fame Emotional Combined emotional Any rational
involvement & rational
Communications strategy

24. The power of Fame
Fame campaigns achieve broader business success
60%
% achieving very large effect
50% 53%
50%
40% Fame
campaigns
34%
30% 32%
30%
Other
20% 22% campaigns
10% 13%
9%
6%
3%
0%
Profit Price Sales Loyalty Penetration
sensitivity
Business metric

25. Fame campaigns are more efficient
Fame campaigns are 2.3 times more efficient
60%
SOM growth Other campaigns
50%
Fame campaigns
40%
30%
20%
10%
0%
-40% -20% 0% 20% 40% 60% 80% 100%
-10%
-20% ESOV
-30%
-40%

26. 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

27. The ultimate data challenge
The dominant driver of effectiveness

28. 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

29. How ESOV drives growth:
overall efficiency for the sample
How ESOV drives market share growth
60%
SOM growth 50%
40%
30%
99% confidence
20%
10%
0%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
-10%
-20% ESOV
-30%
-40%
On average 1.3 points of share growth per 10 points of ESOV

30. Efficiency of non-creatively awarded
cases
Efficiency of non-awarded campaigns
60%
SOM growth 50%
40%
30%
20% 99.7% confidence
10%
0%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
-10%
ESOV
-20%
-30%
-40%
On average 0.8 points of share growth per 10 points of ESOV

31. Efficiency of creatively awarded
campaigns
Efficiency of creatively awarded campaigns
60.0%
SOM growth
50.0%
40.0%
30.0% 99.9% confidence
20.0%
10.0%
0.0%
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
-10.0% ESOV
-20.0%
-30.0%
-40.0%
On average 5.4 points of share growth per 10 points of ESOV

32. The power of creativity is clear
Comparison of the efficiency of awarded and non-awarded campaigns
60.0%
SOM growth
50.0%
40.0% Creatively
awarded
30.0%
Non-creatively
20.0% awarded
10.0%
0.0%
-60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
-10.0%
ESOV
-20.0%
-30.0%
-40.0%
~7:1 advantage in terms of efficiency

33. Non-awarded campaigns are
becoming less efficient
The efficiency of non-awarded campaigns has fallen over time
60%
SOM growth 50%
Pre 2004
40%
2004 & post
30%
20%
10%
0%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
-10%
ESOV
-20%
-30%
-40%

34. Whereas awarded campaigns are
becoming more efficient
The efficiency of creatively-awarded campaigns has risen over time
60%
SOM growth 50%
40%
30% Pre 2004
20%
2004 & post
10%
0%
-60% -40% -20% 0% 20% 40% 60% 80% 100%
-10%
ESOV
-20%
-30%
-40%
Now ~12:1 advantage in terms of efficiency

35. How does creativity appear to
work?
Awarded campaigns are more likely to be emotional
100%! Communications
19% model
Proportion of all cases
90%! 34%
80%! Rational
33%
70%! Combined
60%! 31% Emotional
50%!
40%!
30%! 47%
20%! 35%
10%!
0%!
Creatively Non-awarded
awarded

36. How does creativity appear to
work?
50%
45% 48%
Percentage reporting very large effects
40%
35% Creatively
awarded
30%
25% 25% 25% Non-awarded
20%
23%
15%
10%
5%
0%
Fame Awareness
+ -

37. So why is creativity getting more
important?
The widening fame gap
80%
% reporting very large fame effects
70% 70%
60%
Creatively
50% awarded
40% Non-
awarded
30%
29%
20%
28%
18%
10%
0%
Pre 2004 2004 & post

38. The creative fame journey –
the growing challenge for
measurement
The multi-channel idea makes non-holistic
measurement irrelevant

39. 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

40. Mercedes Germany

41. Barclaycard

42. Barclaycard

43. Gillette India

44. Yellow Pages NZ
Source: CAANZ

45. What can we do about it?
Common practice Best practice
• Measure volume • Measure price elasticity
• Measure loyalty • Measure advocacy
• Measure brand awareness • Measure brand fame
• Measure immediate • Measure long term effects
response
• Promote rational • Promote emotional
communication engagement
• Suspicious of creative • Reward creative awards
awards

46. Further reading
Thank you