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?
• 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?
 1) Support volume and price
100%
90%
80%
% Reporting very large

70%
profit gains

60%
50%
40%
30%
20%
10%
0%
Neither sales/share only price only both
Very large improvements reported in…
 But price effects take time
3.5%
3.0%
% Reporting very large

2.5%
pricing effects

2.0%
1.5%
1.0%
0.5%
0.0%
3 months 6 months 1 year 2 years 3 years
Campaigns periods up to
 2) Build sales and saleability
0.8 Direct campaigns Brand campaigns
Annualised ESOV Efficiency

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
12%
% Reporting very large price

10% 11%
sensitivity reduction

8%
8%
6%
4% 5%
2% 3%
1%
0%
0 1 2 3 4+
Number of very large brand effects recorded
 The need for ‘brand response’
60%
% reporting each type of effect

50%

40%
(very large)

30% Direct sales

27% Share
20%
21% Profit
17%
10%

0%
Pure brand Brand Response Pure Response
-10%
Campaign objectives
 3) Talk to all your prospects
Broad but slower effects, big paybacks

Long Brand
term
Long term prospects building

Immediate
prospects

Short Customer Sales

term base activation
Narrower but earlier effects,
smaller paybacks
 Broad reach for effectiveness & efficiency
8 3
Total number of very large effects

Total number of very large effects Annualised ESOV efficiency

7

Annualised ESOV efficiency

2.5
6.7 2.6
6
2
5 5.6
4 1.5
3
1
2
2.2 0.5
1 0.2
0.3
0 0
Target existing customers Target new customers Target whole market
 Broad reach for price & profit
Target existing customers Target non-customers Target whole market
35%
30%
% cases reporting very large effects

30% 27%
25%

20%

15%

10% 8%
4% 5%
5%
0%
0%
Price sensitivity Profit
 4) Balance head & heart
Short term behavioural Rational product &
responses System 2 pricing messages

Long term brand System 1 Emotional brand

preferences associations
 Sales uplift over base
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
Big direct effect,

157
but decays quickly.
Rational messaging

163
169
175
181
187
193
199
Time

205
211
217
223
229
235
241
247
253
259
265
271
277
283
289
295
Effect of a single exposure

Decays slowly.

301
307
Emotional priming

313
Smaller effect on sales.

319
325
331
337
343
349
355
361
 Effect of a multiple exposures
Rational messaging
Short term sales uplifts, but
Sales uplift over base
Emotional priming
Brand grows stronger,
leading to long term volume increase

Brand perceptions unchanged.

No long term increase in sales
or reduction in price sensitivity.

Time
 Emotions drive long term price elasticity
8%
7% 7%
6%
price elasticity (3+ years)
Very large reduction in

5%
5%
4%
3%
2%
1%
0%
0%
Rational Combined Emotional
 Emotional effects build over years
45% 43%

40%
35%
30%
Very large profit effects

30%
Emotional
25% campaigns
20% 23%
Rational
20%
15% 13% campaigns
10%
10%
5%
0%
1 year 2 years 3+ years
Emotional priming at work: John Lewis

http://www.youtube.com/watch?v=pSLOnR1s74o
 5) Aim for fame
1.6
Fame quadruples efficiency
1.4
1.4
1.2
Annualised ESOV efficiency

1.0
0.8
0.6
0.4
0.2 0.3

0.0
Fame campaigns Other campaigns
 Fame accelerates success
2.5 2.3

2.0
2.0
Very large business effects

2.1

1.5 Fame
1.5
campaigns
1.0
1.0 All emotional
1.1
campaigns

0.5

0.0
1 year 2 years 3+ years
 Fame has the biggest effect on price
9%
8%
8%
7%
Very large reduction
in price sensitivity

6%
5%
4%
3%
3%
2%
1%
0%
Fame campaigns Other campaigns
 6) Creativity increases efficiency
3.0
2.8
Annualised ESOV efficiency

2.5

2.0

1.5

1.0

0.5
0.3
0.0
Creatively awarded Other campaigns
 Creativity has a powerful effect on price
8%
7%
7%
6%
Very large reduction
in price sensitivity

5%
4%
3% 3%
2%
1%
0%
Creatively awarded Other campaigns
 7) Share of voice matters more than ever
12%
Equilibrium: SOV = SOM
10%
Share of voice

8% SOV > SOM: brands tend to grow

6%

4%

2% SOV < SOM: brands tend to shrink

0%
0% 2% 4% 6% 8% 10% 12%
Share of market
 SOV is becoming more important
0.7
0.6
Annualised ESOV efficiency

0.6
0.5
0.4
0.3
0.3
0.2
0.1
0.0
1980-2002 2004-2010
 8) Integrate brand and activation
Brand Brand + Activation Activation channels
channels only 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
140%
3+ year campaigns only
Average uplift in profit effects

120%
100%
80%
60%
40%
20%
0%
-20% TV Other brand Activation
Channels added
 Online: horses for courses

Some online channels are better for brand building, others for activation

Channel: Websites Interactive Social/viral Mobile/Apps Search

Increase in
number of
17% 15% -2% -5% -6%
brand
effects:
 9) Balance brand and activation SOV
TV (inc. sponsorship) 27%
Press - display 17%
Online - display 7% Brand
Outdoor & Transport 5% channels:
61%
Radio (inc. branded content) 3%
Cinema 1%

Online - search 17%

Direct marketing 11% Activation
Press - classified 7% channels:
39%
Online - classified 5%
0% 5% 10% 15% 20% 25% 30% 35% 40%
% UK media expenditure, 2011
 The 60:40 rule
10
9
Number of very large effects

8
7
Optimum: ~40%
6
5
4
3
2
1
0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Activation share of budget
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% 35%
Very large direct effects Very large profits
30%
40%
25%
30% 20%
20% 15%
10%
10%
5%
0%
0%
Rational Combined Emotional
Rational Combined Emotional

Short term metrics alone can be misleading

 Big data = big danger?
40%
35% 38%
34%
large direct effects

30%
% Reporting very

25% 27%
20% 24%
15%
10%
5%
0%
Creatively Not creatively Fame campaigns Rational
awarded awarded campaigns
 Pre-testing vs. tracking
30% 31%
25%
Very large sales effects

20%
Pretested minus
15% non-pretested
10%
10% 9%
5% tracked minus
0% non-tracked
≤ 6 months 1 year 2+ years
-5%
-7% -7%
-10%
-10%
 Key long term metrics:
SOV & price elasticity

Share of voice
Level of trade Price elasticity Price elasticity Price elasticity
minus market
promotion Year 1 Year 2 Year 3
share

Brand A +9.3%
Brand B +2.9%
Brand C -2.0%

Source: DDB Matrix

 Key long term metrics:
SOV & price elasticity

Share of voice
Level of trade Price elasticity Price elasticity Price elasticity
minus market
promotion Year 1 Year 2 Year 3
share

Brand A +9.3% Low

Brand B +2.9% Low
Brand C -2.0% High

Source: DDB Matrix

 Key long term metrics:
SOV & price elasticity

Share of voice
Level of trade Price elasticity Price elasticity Price elasticity
minus market
promotion Year 1 Year 2 Year 3
share

Brand A +9.3% Low -2.4

Brand B +2.9% Low -1.9
Brand C -2.0% High -1.3

Source: DDB Matrix

 Key long term metrics:
SOV & price elasticity

Share of voice
Level of trade Price elasticity Price elasticity Price elasticity
minus market
promotion Year 1 Year 2 Year 3
share

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

 Key long term metrics:
SOV & price elasticity

Share of voice
Level of trade Price elasticity Price elasticity Price elasticity
minus market
promotion Year 1 Year 2 Year 3
share

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 Persuasion scores
term
 10 Key principles for success
1. Support volume and price
2. Build sales and saleability
3. Talk to all your prospects
4. Balance head and heart
5. Aim for fame
6. Creativity increases efficiency
7. Share of voice matters more than ever
8. Integrate brand and activation
9. Balance brand and activation SOV
10. Measure short and long-term effects