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Effectiveness in Context - Preliminary Findings

There are two types of marketing - sales activation which provides short-term sales uplifts, and brand building which leads to long-term sales and profits. Effective marketing requires balancing both. While TV advertising is still an important brand building medium with high reach and emotion, consumers are now more rational in their decision making and do more online research. The rules for effective marketing have changed and are different depending on factors like the distribution channel, purchase model, and whether the brand is innovative. Both acquisition and loyalty marketing strategies can be effective, but loyalty strategies may provide greater annual growth. Despite claims that new digital channels have replaced TV, broadcast TV still has very high weekly reach among adults.

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Jonathan Jones
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265 views18 pages

Effectiveness in Context - Preliminary Findings

There are two types of marketing - sales activation which provides short-term sales uplifts, and brand building which leads to long-term sales and profits. Effective marketing requires balancing both. While TV advertising is still an important brand building medium with high reach and emotion, consumers are now more rational in their decision making and do more online research. The rules for effective marketing have changed and are different depending on factors like the distribution channel, purchase model, and whether the brand is innovative. Both acquisition and loyalty marketing strategies can be effective, but loyalty strategies may provide greater annual growth. Despite claims that new digital channels have replaced TV, broadcast TV still has very high weekly reach among adults.

Uploaded by

Jonathan Jones
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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EFFECTIVENESS

IN CONTEXT
PRELIMINARY FINDINGS
Sales uplift over base There are two kinds of marketing

Sales activation
Short term sales uplifts

Time
Source: Binet & Field 2013
There are two kinds of marketing
Brand building
Long term sales & profit
Sales uplift over base

Sales activation
Short term sales uplifts

Time
Source: Binet & Field 2013
You need both, in balance
1,6
large business effects

1,4
Number of very

1,2
1,0
0,8
0,6
0,4
0,2
0,0
<50% 50-70% >70%
% of budget allocated to brand building
Source: IPA Databank, 2014-16 cases
TV is the best brand medium
Brand activity TV advertising

Broadest High
Reach Emotion
Reach Emotion

Most
Fame talked
about
“But the rules have changed”
“Consumers are more rational now”
100%
90%
33% 29%
80%
% Communications budget

70%
60%
Activation
50%
Brand
40%
67% 71%
30%
20%
10%
0%
Emotional Rational
Decision is primarily
Source: IPA Databank, 1998-2016 for-profit cases
“Consumers do more research now”
100%
90%
26%
80%
% Communications budget

45%
70%
60%
Activation
50%
Brand
40%
74%
30%
55%
20%
10%
0%
Low High
Online research
Source: IPA Databank, 1998-2016 for-profit cases
“The rules are different for online brands”
100%
90%
26%
80%
% Communications budget

45%
70%
60%
Activation
50%
Brand
40%
74%
30%
55%
20%
10%
0%
Offline Online
Primary distribution channel
Source: IPA Databank, 1998-2016 for-profit cases
“Subscription models change everything”
100%
90%
26%
80%
% Communications budget

43%
70%
60%
Activation
50%
Brand
40%
74%
30% 57%
20%
10%
0%
Repeat purchase model Subscription model

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


“Innovators don’t need to advertise”
100%
90%
28%
80% 39%
% Communications budget

70%
60%
% Actvation
50%
% Brand
40%
72%
30% 61%
20%
10%
0%
No innovation Any innovation

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


“Loyalty marketing is more efficient”
2,0%
1,8%
Annual mkt. share growth

1,6%
1,4%
1,2%
1,0%
0,8%
0,6%
0,4%
0,2%
0,0%
Loyalty strategy Acquisition strategy Reach strategy

Base: 2008-16 IPA cases


“Nobody watches TV now”
100 Broadcast TV
OOH
90
Radio
80 Email
Weekly Reach (% Adults)

70 Other online Texting


Newsbrands Social networking
60 Search

50 Messaging
Shopping/
40 transacting
Online video Internet for work
30
Subscriber VoD
20
Cinema
10

0
0,00 1,00 2,00 3,00 4,00 5,00 6,00
Average Hours Per Day (Across All Adults)
Source: IPA Touchpoints 2016
The Media Landscape in 2016
2017
100 Broadcast TV
OOH
90
Radio
80 Email
Weekly Reach (% Adults)

70 Other online Texting


Newsbrands Social networking
60 Search

50 Messaging
Shopping/
40 transacting
Online video Internet for work
30
Subscriber VoD
20
Cinema
10

0
0,00 1,00 2,00 3,00 4,00 5,00 6,00
Average Hours Per Day (Across All Adults)
Source: IPA Touchpoints
“Mass media are becoming less effective”
45%
40%
business effects from adding

40%
% increase in avg. no. VL

35%
30% 27% 27% 27%
25% 22% 22%
20%
13% 14%
15%
10%
5%
0%
TV Press Radio Outdoor

Source: IPA Databank


*Outdoor = 2012 - 2016
Web 1.0 (1998 - 2006) Web 2.0 (2008* - 2016)
“But what about tech firms?”
Major tech firms spend on traditional ad media
£200.000.000

£190.000.000
Audited adspend (UK)

£180.000.000

£170.000.000

£160.000.000

£150.000.000

£140.000.000 Source: Nielsen


Brands: Amazon, Google, Apple, Facebook, Twitter, AirBnB, Uber, Spotify
£130.000.000
Jan

Jan

Jan

Jan

Jan
Nov

Nov

Nov

Nov
Sep

Sep

Sep

Sep
May

May

May

May

May
Mar

Jul

Mar

Jul

Mar

Jul

Mar

Jul

Mar

Jul
2013 2014 2015 2016 2017
Year ending
Mass marketing is alive and well
EFFECTIVENESS
IN CONTEXT
PUBLISHED 9th OCTOBER 2018

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