Previous research and this How does the context the brand operates - - PowerPoint PPT Presentation

Previous research and this

How does the context the brand operates in influence strategy? 500 digital era for- profit cases 120 not-for-profit cases

Sales uplift over base Time

Source: Binet & Field 2013

Two ways marketing works

Sales activation Short term sales uplifts Brand building Long term sales growth Short term effects dominate ~6 months

Brand and activation work in synergy

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 Number of very large business fx

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% 1 ≥2 % Reporting very large activation fx.

Number of very large brand effects reported

Source: IPA Databank, 1998-2016 for-profit cases

The principles of balance

Brand-Activation balance matters

0.5 1 1.5 2 10 20 30 40 50 60 70 80 90 100

Number

• f

business effects reported % Budget allocated to brand building

Source: IPA Databank, 1998-2016 for-profit cases

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 Optimum Brand/activation split

Nature of purchase decision

Activation Brand Source: IPA Databank, 1998-2016 for-profit cases

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 Optimum Brand/activation split

Role of emotions in purchase decision

Activation Brand Source: IPA Databank, 1998-2016 for-profit cases

Flexing the rules by context

Factors that modify the rules

Online research makes activation easier

Source: IPA Databank, 1998-2016 for-profit cases 27% 32% 0% 5% 10% 15% 20% 25% 30% 35% Low research High research V Large Activation fx 55 74 45 26 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Low research High research Brrand/activation optimum

Online selling makes activation easier

Source: IPA Databank, 1998-2016 for-profit cases 30% 40% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Offline brand Online brand V Large Activation fx. 55 74 45 26 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Offline brand Online brand Brrand/activation optimum

Subscription makes activation easier

Source: IPA Databank, 1998-2016 for-profit cases 31% 37% 0% 5% 10% 15% 20% 25% 30% 35% 40% Series Subscription V Large Activation fx. 57 74 43 26 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Series Subscription Brrand/activation optimum

Innovation makes activation easier

Source: IPA Databank, 1998-2016 for-profit cases 28% 40% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% No innovation Any innovation V Large Activation fx. 61 72 39 28 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% No innovation Any innovation Brrand/activation optimum

Brand effects are biggest for new brands

Source: IPA Databank, 1998-2016 for-profit cases 1.9 1.6 0.0 0.5 1.0 1.5 2.0 New brand Established brand Number of Brand fx. 56 63 44 37 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% New brand Established brand Brrand/activation optimum

Activation gets easier as brands grow

Source: IPA Databank, 1998-2016 for-profit cases Big brands = Top 33% by market share 28% 30% 0% 5% 10% 15% 20% 25% 30% 35% Average brand Big brand V Large Activation fx. 62 76 38 24 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Average brand Big brand Brrand/activation optimum

Brand is the key to premium pricing

57 64 43 36 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Value/mid-market Premium Source: IPA Databank, 1998-2016 for-profit cases 0% 2% 4% 6% 8% 10% 12% 1 2 3+ % Reporting very large price sensitivity reduction Number of very large brand effects recorded

How does this affect sectors?

Brand building always drives long-term effectiveness

0.9 0.9 0.8 1.0 0.7 1.3 1.2 1.6 1.6 1.6 2.5 2.0 2.1 1.8 2.6

0.0 0.5 1.0 1.5 2.0 2.5 3.0 Durables FMCG Financial services Other services Retail Number of very large business fx.

Sector

Number of brand effects reported 1 ≥2 Source: IPA Databank, 1998-2016 for-profit cases

Brand & Activation potential vary widely

31% 26% 36% 44% 30% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Durables FMCG Financial services Other services Retail Very large activation fx.

Short-term activation effects

Source: IPA Databank, 1998-2016 for-profit cases 2.1 1.7 1.6 1.8 1.0 0.0 0.5 1.0 1.5 2.0 2.5 Durables FMCG Financial services Other services Retail Number of very large brand fx.

Brand effects

Up-weight brand in Financial Services, down- weight brand in Other Services

58 60 80 51 64 42 40 20 49 36

10 20 30 40 50 60 70 80 90 100 Durables FMCG Financial services Other services Retail Optimum budget split %

Activation Brand Source: IPA Databank, 1998-2016 for-profit cases

What about the NFP sector?

43 44 44 57 56 56

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Charities Government All NFP Optimum budget split Activation Brand Source: IPA Databank, 2012-2016 not-for-profit cases

Brand building is becoming more important, not less

55 57 63 76 45 43 37 24

10 20 30 40 50 60 70 80 90 100

98 to 10 00 to 12 02 to 14 04 to 16

Optimum budget split %

Period

Activation Brand Source: IPA Databank, 1998-2016 for-profit cases

The activation tide varies across sectors

• 80%
• 70%
• 60%
• 50%
• 40%
• 30%
• 20%
• 10%

0% 10% 20% 0% 50% 100% 150% 200% 250% 300% 350% Loss of effectiveness 2014-16 vs. 2006-08 Growth of short-termism 2014-16 vs. 2006-08

76% Correlation

Other services Financial services Durables FMCG Retail

Source: IPA Databank, 2006-2016 for-profit cases

Reversing the activation tide

Case study: AA Roadside Assistance

• Brand activity cut in favour of “hard working” activation
• Initial discounts used to entice new members
• Renewal price hikes used to make up profit
• Highly profitable in the short term, but…
• Brand metrics in free fall
• Whole category becoming commoditised
• Angry customers, churn increasing
• Bigger and bigger discounts required
• Market share declining
• Complete collapse predicted in five years

AA “Singing Baby” TVC

AA “Singing Baby” TVC

42% 42% 40% 40% 39% 39% 42%

2011 2012 2013 2014 2015 2016 2017 YTD

Share of membership (%) Year

The decline in market share reversed immediately

SOURCE: AA

2017 ads

Brand metrics improved Branded searches increased Acquisition increased Retention increased Despite less discounting

Conclusions

• Invest more in brand building where activation is easy
• Invest more in activation where brand building is easy
• Activation is getting easier so brand building is becoming

more important: the 60:40 rule is shifting further to brand

• This is making brand-building media more important
• The trend in investment is away from brand: some sectors

& contexts are already strongly out of balance

• We urgently need to restore balance: allocate the

recommended balance for your brand’s context

Thank you