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‘Media in Context’ is the sneak preview of Les Binet and Peter Field’s further research into the changing media landscape. In this session, they look in more detail at what produces long-term branding effects and how the 60/40 brand building vs activation rule plays out in different sectors.

Over the last ten years, Les Binet and Peter Field have been trawling the IPA Databank to uncover some rules about how marketing works. In June 2017 their latest published findings were released: ‘Media in Focus‘. They showed that the decline in long-termism and in marketing effectiveness since the start of the digital age is real.

This year at EffWeek they updated us with new findings that are beginning to get beneath the skin of the original research and put their earlier findings about media into context. They brought us more detail about how their ‘rules’ work with different sectors, types of brands, and marketing approaches.

Key learnings

For a summary table of all the variations on the 60/40 brand building/ activation rule, go to timecode 45:15 in the video

For a very  topline summary of the main conclusions in this presentation go to timecode 45:40 in the video

Peter and Les’ main findings are summarised below – for more detail watch their presentation.

Find out:
The effect of rational vs emotional decision making on the 60/40 rule
Product innovation and marketing effectiveness
The effects of category development on marketing effectiveness
Brand development and effectiveness
The effect of price position
The effect of online research – comparing high and low research categories
Online vs offline brands
Subscription vs series purchases
Differences to the 60/40 rule in different categories

The effect of rational vs emotional decision making on the 60/40 rule

(timecode 4:30) Any kind of involvement increases the effectiveness of communications. The more people think about the purpose of the decision or the more emotionally involved they are the more effective comms tend to be. But rational and emotional components have slightly different effects (timecode: 6.00)

  • Regardless of whether the decision is emotional or rational penetration is still the driver of growth
  • But we find that in more rational categories we get bigger activation effects and in more emotional categories we get bigger brand building effect.
  • (timecode:7:33) In terms of what this all means for budgets – advertising media works better for emotional decisions
  • (timecode: 8:20) But, in terms of the 60/40 rule best practice is to slightly upweight the brand building in rational categories and slightly downweight it in more emotional categories

Product innovation and marketing effectiveness

(timecode: 8:45) Product innovation has become a big issue in last 20 years. In general we see a definite increase of effectiveness of marketing communications when you have product innovation. In this part of the presentation Les goes through the variants of this metric against different types of innovation such as category launches or new sub-brands

  • New variant launches underperform and are worse than no innovation at all
  • Regardless of what kind of innovation you are doing penetration is the main driver
  • Effects tend to be slanted towards activation, so innovation is a slightly more short term strategy
  • (timecode: 11:48)Advertising media work harder with product innovation and it seems to boost growth from other factors
  • In terms of 60/40 you need to upweight brand building slightly

The effects of category development on marketing effectiveness

  • (timecode 13:00) As the category matures the effects of advertising get smaller and advertising efficiency declines. Penetration is still the name of the game, BUT loyalty effects become more important
  • We see a shift from volume and top line profit to price and ROI metrics
  • (timecode 14.50) Reduce the brand spend as the category matures

Brand development and effectiveness

  • (timecode 15.35) As brands mature loyalty becomes more important and there is a shift from volume to price
  • The bigger and stronger a brand the less effect advertising has
  • There are two points in a brand life when activation effects are particularly strong. When you’re new and when you’re big
  • Immediately after launch efficiency drops – a difficult trap to be in if your launch didn’t get you a foothold in the market
  • The 60:40 rule is slightly different depending on size. For small brands its much more in favour of activation rather than brand. For strong challengers it’s more about brand building

The effect of price position

(timecode 19:55) There are two points in the market where communications work best – at the bottom of the market, where you have really low prices and at the very top end of the market with super premium prices. Penetration still more important across the board, although there is an uplift in the importance of loyalty for premium products.

The effect of online research – comparing high and low research categories

(timecode 23:35) Research uses the TNS and Google Consumer Barometer

  • Short term effects are stronger in high research categories because we have many more opportunities to activate. You don’t get same kind of uplift for long term effects
  • There is a much higher efficiency and responsiveness to advertising investment in high research categories
  • Rational decision making has grown in influence and the danger is that people assume we need to step back on the emotional advertising and focus on rational advertising. The data contradicts this. Emotional campaigns are actually more efficient in these categories
  • The data shows that in low research categories the 60/40 rule still applies but in high research a greater proportion on brand building is (counterintuitively) significantly more effective. We found a balance of 78/22 Brand building / activation was optimum

Online vs offline brands

(timecode 29:25)

  • Online brands are twice as likely to be focussed on driving short term goals, backing up the notion that digital media is driving short termism
  • Many of these brands we looked at have a significant offline presences as well – we’re not talking about the Uber’s of the world here. So this is significant evidence that they are being sucked into the world of short term thinking principally because of their exposure to digital metrics.
  • This isn’t smart – there is no significant difference to the 60/40 rule between online and offline brands

Subscription vs series purchases

(timecode 31:34) A subscription purchase includes a contract that binds us in for a period of time. A series purchase is a repeated purchase, classically packaged goods such as toothpaste

  • Subscription brands focus much more on acquisition
  • Loyalty effects are actually much, much lower than you might expect in subscription categories. In both series and subscription loyalty is last acquisition does better, but reach is the best
  • In subscription categories the 60/40 rule is different because of the vital importance of bringing on board new customers, reaching out to people who don’t know us and don’t care about us – brand building needs to be at 71%

Differences to the 60/40 rule in different categories

(timecode 36:30)

  • Differences in responsiveness to advertising (measured using SOV). Retail and packaged goods are fairly unresponsive, services and financial services are responsive
  • Financial services need to uplift brand building to 75%. There are many reasons for this for example, the financial meltdown and its effect on the brands
  • Services – the databank is dominated by brands with perishable commodities so they are very focussed on short term effects. The sweet spot here is the opposite of financial services and weighted 65/35 towards activation
  • Retail is closer to 60/40

Related content:

“Just what the industry needs, great collaboration between clients and agencies on the topics that drive business growth.”

Bridget Angear, Joint Chief Strategy Officer at AMV BBDO

“It’s great to see the IPA in the UK bring the whole industry and particularly the trade bodies together to focus on effectiveness. This new Marketing Effectiveness initiative will enable people across the industry to work together to build on best practice.”

David Wheldon, Chief Marketing Officer, RBS

“Effectiveness is a team sport, so it was great to see the industry in the widest sense, come together. In an increasingly diverse and fragmented world, only by using all parts of the brain will we solve effectiveness challenges and design our campaigns to deliver short and long term value. That’s why what happens next is important – if the IPA can help facilitate progress on this with a long-term initiative around Marketing Effectiveness, we’ll definitely crack it.”

Bart Michels, Global CEO Kantar Added Value and Country Leader Kantar UK

“The time spent at #EffWeek was extraordinarily effective. It was great to hear the diverse views from all areas of the industry. All tied together with the common themes of accountability and effectiveness.”

Andrew Canter, Global CEO, BCMA

“It has been a privilege to be part of the inaugural Effectiveness Week. The agenda is one which we at O2 UK feel passionately about. To see and hear perspectives across the industry demonstrates how the breadth of marketing effectiveness is increasingly being valued within businesses. Data, insight, social, customer experience, test and learn, ROI, these are all fundamentals and were covered expansively at the event”.

Sandra Fazackerley, Marketing & Consumer, Telefónica UK Limited

“The full week of effectiveness events brought into clear focus the need for marketers to use data and insight to achieve the key business objectives of growth and profits. Marketers today are in a better position to quantify their knowledge of customers and measure the ability of investments in marketing to increase brand and shareholder value.”

Chris Combemale, Group CEO, DMA