Peter Field - IPA DATAbank

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Marketing Effectiveness in the Data Age

Peter Field - IPA DATAbank

  1. 1. Effectiveness in the data age November 3rd 2011
  2. 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. 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. 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. 5. What drives effectiveness and what should we measure? Broad findings from the IPA Databank
  6. 6. There is more to growth than volume Price is the key to profit70%60% 63%50% Incidence40%30% 36% Very large profit growth20% 26% 25% 22% 20% 19%10% 5%0% Price sensitivity Share growth Share defence Sales growth Campaign objective
  7. 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. 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. 9. Share of voice is still crucial
  10. 10. The concept of equilibrium SOVSource: Marketing in the era of Accountability
  11. 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. 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. 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. 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. 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. 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. 17. Why some metrics can bedamaging to effectiveness How campaigns drive growth
  18. 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. 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 strategyEmotional campaigns outperform on almost every metric
  20. 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. 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. 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. 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. 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. 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. 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. 27. The ultimate data challenge The dominant driver of effectiveness
  28. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 38. The creative fame journey – the growing challenge for measurement The multi-channel idea makes non-holistic measurement irrelevant
  39. 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. 40. Mercedes Germany
  41. 41. Barclaycard
  42. 42. Barclaycard
  43. 43. Gillette India
  44. 44. Yellow Pages NZSource: CAANZ
  45. 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. 46. Further reading Thank you

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