The long and the short of it:
10 key principles of success
Les Binet & Peter Field
Our new research
• What are the ingredients of effectiveness?
– over the short term?
– over the long term?
• Method: meta-analysis of IPA effectiveness Databank
– 996 campaigns
– 700 brands
– 83 categories
• Compare effects of strategies over short & long term.
What’s the problem?
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No long term effects without short term.
But short and long term effects are different
Short term effects are vital for efficiency.
But long term effects drive growth and profit.
You need both.
But how do you balance them?
% Reporting very large
profit gains
1) Support volume and price
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Neither
sales/share only
price only
Very large improvements reported in…
both
But price effects take time
% Reporting very large
pricing effects
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
3 months
6 months
1 year
2 years
Campaigns periods up to
3 years
2) Build sales and saleability
Annualised ESOV Efficiency
0.8
Direct campaigns
Brand campaigns
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
1-2 years
3+ years
Price effects depend on brand-building
% Reporting very large price
sensitivity reduction
12%
10%
11%
8%
8%
6%
4%
2%
5%
1%
3%
0%
0
1
2
3
Number of very large brand effects recorded
4+
The need for ‘brand response’
% reporting each type of effect
(very large)
60%
50%
40%
30%
20%
Direct sales
27%
21%
10%
Share
17%
0%
-10%
Pure brand
Brand Response Pure Response
Campaign objectives
Profit
3) Talk to all your prospects
Broad but slower effects, big paybacks
Long
term
Long term prospects
Brand
building
Immediate
prospects
Short
term
Customer
base
Narrower but earlier effects,
smaller paybacks
Sales
activation
Broad reach for effectiveness & efficiency
7
3
Total number of very large effects
Annualised ESOV efficiency
6.7
6
2.6
2
5.6
5
4
1.5
3
2
1
0
2.5
1
2.2
0.2
0.5
0.3
Target existing customers Target new customers
0
Target whole market
Annualised ESOV efficiency
Total number of very large effects
8
Broad reach for price & profit
Target existing customers
Target non-customers
Target whole market
% cases reporting very large effects
35%
30%
30%
27%
25%
20%
15%
10%
4%
5%
0%
5%
8%
0%
Price sensitivity
Profit
4) Balance head & heart
Short term behavioural
responses
Long term brand
preferences
System 2
Rational product &
pricing messages
System 1
Emotional brand
associations
1
7
13
19
25
31
37
43
49
55
61
67
73
79
85
91
97
103
109
115
121
127
133
139
145
151
157
163
169
175
181
187
193
199
205
211
217
223
229
235
241
247
253
259
265
271
277
283
289
295
301
307
313
319
325
331
337
343
349
355
361
Sales uplift over base
Effect of a single exposure
Rational messaging
Big direct effect,
but decays quickly.
Emotional priming
Smaller effect on sales.
Decays slowly.
Time
Sales uplift over base
Effect of a multiple exposures
Rational messaging
Short term sales uplifts, but
Brand perceptions unchanged.
No long term increase in sales
or reduction in price sensitivity.
Emotional priming
Brand grows stronger,
leading to long term volume increase
Time
Emotions drive long term price elasticity
8%
7%
7%
Very large reduction in
price elasticity (3+ years)
6%
5%
5%
4%
3%
2%
1%
0%
0%
Rational
Combined
Emotional
Emotional effects build over years
45%
43%
40%
Very large profit effects
35%
30%
30%
Emotional
campaigns
25%
20%
15%
23%
13%
20%
10%
5%
10%
0%
1 year
2 years
3+ years
Rational
campaigns
Emotional priming at work: John Lewis
http://www.youtube.com/watch?v=pSLOnR1s74o
5) Aim for fame
1.6
Fame quadruples efficiency
Annualised ESOV efficiency
1.4
1.2
1.4
1.0
0.8
0.6
0.4
0.3
0.2
0.0
Fame campaigns
Other campaigns
Fame accelerates success
2.5
2.3
Very large business effects
2.0
2.0
2.1
1.5
Fame
campaigns
1.5
1.0
1.0
All emotional
campaigns
1.1
0.5
0.0
1 year
2 years
3+ years
Fame has the biggest effect on price
9%
Very large reduction
in price sensitivity
8%
7%
8%
6%
5%
4%
3%
3%
2%
1%
0%
Fame campaigns
Other campaigns
6) Creativity increases efficiency
Annualised ESOV efficiency
3.0
2.5
2.8
2.0
1.5
1.0
0.5
0.3
0.0
Creatively awarded
Other campaigns
Creativity has a powerful effect on price
8%
Very large reduction
in price sensitivity
7%
7%
6%
5%
4%
3%
3%
2%
1%
0%
Creatively awarded
Other campaigns
7) Share of voice matters more than ever
12%
Equilibrium: SOV = SOM
Share of voice
10%
8%
SOV > SOM: brands tend to grow
6%
4%
SOV < SOM: brands tend to shrink
2%
0%
0%
2%
4%
6%
Share of market
8%
10%
12%
SOV is becoming more important
Annualised ESOV efficiency
0.7
0.6
0.6
0.5
0.4
0.3
0.2
0.3
0.1
0.0
1980-2002
2004-2010
8) Integrate brand and activation
Brand
channels only
Brand + Activation
Activation channels
only
Brand effects
1.2
1.6
0.5
Business effects
1.3
1.5
0.7
ESOV efficiency
0.3
0.6
-
Integration can double efficiency
TV is vital for long term profit
Average uplift in profit effects
140%
3+ year campaigns only
120%
100%
80%
60%
40%
20%
0%
-20%
TV
Other brand
Channels added
Activation
Online: horses for courses
Some online channels are better for brand building, others for activation
Channel:
Increase in
number of
brand
effects:
Websites
Interactive
Social/viral
Mobile/Apps
Search
17%
15%
-2%
-5%
-6%
9) Balance brand and activation SOV
TV (inc. sponsorship)
Press - display
Online - display
Outdoor & Transport
Radio (inc. branded content)
Cinema
27%
17%
Brand
channels:
61%
7%
5%
3%
1%
Online - search
Direct marketing
Press - classified
Online - classified
17%
11%
7%
5%
0%
5%
Activation
channels:
39%
10%
15%
20%
25%
30%
% UK media expenditure, 2011
35%
40%
The 60:40 rule
Number of very large effects
10
9
8
7
Optimum: ~40%
6
5
4
3
2
1
0
0%
10%
20%
30%
40%
50%
60%
Activation share of budget
70%
80%
90%
100%
VW: balancing brand and activation
http://www.youtube.com/watch?v=oeKuFs0KxO8
VW: balancing brand and activation
http://www.youtube.com/watch?feature=player_embedded&v=tx_Awd6-_Do
10) Measure short and long-term effects
50%
Very large direct effects
40%
35%
Very large profits
30%
25%
30%
20%
20%
15%
10%
10%
5%
0%
Rational
Combined Emotional
0%
Rational
Combined Emotional
Short term metrics alone can be misleading
Big data = big danger?
40%
% Reporting very
large direct effects
35%
38%
34%
30%
25%
20%
27%
24%
15%
10%
5%
0%
Creatively
awarded
Not creatively
awarded
Fame campaigns
Rational
campaigns
Pre-testing vs. tracking
Very large sales effects
30%
31%
25%
20%
Pretested minus
non-pretested
15%
10%
10%
5%
9%
tracked minus
non-tracked
0%
-5%
-10%
≤ 6 months
1 year
-7%
-7%
2+ years
-10%
Key long term metrics:
SOV & price elasticity
Share of voice
minus market
share
Brand A
+9.3%
Brand B
+2.9%
Brand C
-2.0%
Level of trade
promotion
Price elasticity
Year 1
Source: DDB Matrix
Price elasticity
Year 2
Price elasticity
Year 3
Key long term metrics:
SOV & price elasticity
Share of voice
minus market
share
Level of trade
promotion
Brand A
+9.3%
Low
Brand B
+2.9%
Low
Brand C
-2.0%
High
Price elasticity
Year 1
Source: DDB Matrix
Price elasticity
Year 2
Price elasticity
Year 3
Key long term metrics:
SOV & price elasticity
Share of voice
minus market
share
Level of trade
promotion
Price elasticity
Year 1
Brand A
+9.3%
Low
-2.4
Brand B
+2.9%
Low
-1.9
Brand C
-2.0%
High
-1.3
Source: DDB Matrix
Price elasticity
Year 2
Price elasticity
Year 3
Key long term metrics:
SOV & price elasticity
Share of voice
minus market
share
Level of trade
promotion
Price elasticity
Year 1
Price elasticity
Year 2
Brand A
+9.3%
Low
-2.4
-1.7
Brand B
+2.9%
Low
-1.9
-1.5
Brand C
-2.0%
High
-1.3
-1.6
Source: DDB Matrix
Price elasticity
Year 3
Key long term metrics:
SOV & price elasticity
Share of voice
minus market
share
Level of trade
promotion
Price elasticity
Year 1
Price elasticity
Year 2
Price elasticity
Year 3
Brand A
+9.3%
Low
-2.4
-1.7
-0.7
Brand B
+2.9%
Low
-1.9
-1.5
-1.4
Brand C
-2.0%
High
-1.3
-1.6
-2.0
Source: DDB Matrix
The balanced scorecard
Long
term
Long term business performance
Price elasticity
Econometrics
Brand equity
Implicit, emotional responses
Creativity & fame metrics
Short term sales
On & offline response
Explicit communication
Short
term
Persuasion scores
10 Key principles for success
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Support volume and price
Build sales and saleability
Talk to all your prospects
Balance head and heart
Aim for fame
Creativity increases efficiency
Share of voice matters more than ever
Integrate brand and activation
Balance brand and activation SOV
Measure short and long-term effects