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
Two ways marketing works Brand building Long term sales growth Sales uplift over base Sales activation Short term sales uplifts Short term effects dominate ~6 months Time Source: Binet & Field 2013
Brand and activation work in synergy 2.4 2.5 Number of very large business fx 2.0 2.0 1.5 1.5 0.8 1.0 0.5 0.0 Low Brand, Low Low Brand, High High Brand, Low High Brand, High Activation Activation Activation Activation 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 42% 45% % Reporting very large activation fx. 40% 36% 35% 30% 25% 20% 17% 15% 10% 5% 0% 0 1 ≥2 Number of very large brand effects reported Source: IPA Databank, 1998-2016 for-profit cases
The principles of balance
Brand-Activation balance matters 2� Peak at 62% brand reported� 1.5� effects� 20% loss of effectiveness business� Brand remains strong 1� of� 56% loss of effectiveness Number� Brand weakens 0.5� 0� 0� 10� 20� 30� 40� 50� 60� 70� 80� 90� 100� %� Budget� allocated� to� brand� building� Source: IPA Databank, 1998-2016 for-profit cases
When activation is easy, up-weight brand 100% 90% Optimum Brand/activation split 31 39 80% Activation 70% 60% 50% Brand 40% 69 61 30% 20% 10% 0% Low consideration High consideration Nature of purchase decision Source: IPA Databank, 1998-2016 for-profit cases
When brand building is easy, up-weight activation 100% 90% 24 Optimum Brand/activation split 80% 45 Activation 70% 60% 50% 40% 76 Brand 30% 55 20% 10% 0% Low High Role of emotions in purchase decision Source: IPA Databank, 1998-2016 for-profit cases
Flexing the rules by context Factors that modify the rules
Online research makes activation easier 100% 35% 32% 90% 26 Brrand/activation optimum 30% 27% 80% 45 V Large Activation fx 70% 25% 60% 20% 50% 15% 40% 74 30% 10% 55 20% 5% 10% 0% 0% Low research High research Low research High research Source: IPA Databank, 1998-2016 for-profit cases
Online selling makes activation easier 100% 45% 40% 90% 26 40% Brrand/activation optimum 80% V Large Activation fx. 45 35% 30% 70% 30% 60% 25% 50% 20% 40% 74 15% 30% 55 10% 20% 5% 10% 0% 0% Offline brand Online brand Offline brand Online brand Source: IPA Databank, 1998-2016 for-profit cases
Subscription makes activation easier 100% 40% 37% 90% 26 35% Brrand/activation optimum 31% 80% V Large Activation fx. 43 30% 70% 25% 60% 50% 20% 40% 15% 74 30% 57 10% 20% 5% 10% 0% 0% Series Subscription Series Subscription Source: IPA Databank, 1998-2016 for-profit cases
Innovation makes activation easier 100% 45% 40% 90% 40% 28 Brrand/activation optimum 80% 39 V Large Activation fx. 35% 70% 28% 30% 60% 25% 50% 20% 40% 72 15% 30% 61 10% 20% 5% 10% 0% 0% No innovation Any innovation No innovation Any innovation Source: IPA Databank, 1998-2016 for-profit cases
Brand effects are biggest for new brands 100% 90% 1.9 2.0 Brrand/activation optimum 37 80% Number of Brand fx. 44 1.6 70% 1.5 60% 50% 1.0 40% 63 30% 56 0.5 20% 10% 0.0 0% New brand Established brand New brand Established brand Source: IPA Databank, 1998-2016 for-profit cases
Activation gets easier as brands grow 100% 35% 30% 90% 24 Brrand/activation optimum 28% 30% 38 80% V Large Activation fx. 70% 25% 60% 20% 50% 15% 40% 76 62 30% 10% 20% 5% 10% 0% 0% Average brand Big brand Average brand Big brand Source: IPA Databank, 1998-2016 for-profit cases Big brands = Top 33% by market share
Brand is the key to premium pricing 12% 100% price sensitivity reduction % Reporting very large 10% 90% 36 80% 43 8% 70% 60% 6% 50% 40% 4% 64 30% 57 2% 20% 10% 0% 0% 0 1 2 3+ Value/mid-market Premium Number of very large brand effects recorded Source: IPA Databank, 1998-2016 for-profit cases
How does this affect sectors?
Brand building always drives long-term effectiveness Number of brand effects reported 3.0 0 1 ≥2 Number of very large business fx. 2.6 2.5 2.5 2.1 2.0 2.0 1.8 1.6 1.6 1.6 1.5 1.3 1.2 1.0 0.9 1.0 0.9 0.8 0.7 0.5 0.0 Durables FMCG Financial services Other services Retail Sector Source: IPA Databank, 1998-2016 for-profit cases
Brand & Activation potential vary widely Short-term activation effects 2.5 Brand effects 50% 2.1 44% Number of very large brand fx. 2.0 45% 1.8 1.7 1.6 40% 36% Very large activation fx. 35% 1.5 31% 30% 30% 26% 1.0 25% 1.0 20% 15% 0.5 10% 5% 0.0 0% Durables FMCG Financial Other Retail Durables FMCG Financial Other Retail services services services services Source: IPA Databank, 1998-2016 for-profit cases
Up-weight brand in Financial Services, down- weight brand in Other Services 100 20 90 36 80 40 42 Activation Optimum budget split % 49 70 60 50 Brand 80 40 64 30 60 58 51 20 10 0 Durables FMCG Financial services Other services Retail Source: IPA Databank, 1998-2016 for-profit cases
What about the NFP sector? 100% 90% 80% Optimum budget split 56 56 57 70% Activation 60% 50% 40% Brand 30% 43 44 44 20% 10% 0% Charities Government All NFP Source: IPA Databank, 2012-2016 not-for-profit cases
Brand building is becoming more important, not less 100 90 24 37 80 43 45 Optimum budget split % 70 Activation 60 50 Brand 40 76 63 30 57 55 20 10 0 98 to 10 00 to 12 02 to 14 04 to 16 Period Source: IPA Databank, 1998-2016 for-profit cases
The activation tide varies across sectors 20% 10% Growth of short-termism Retail Loss of effectiveness 2014-16 vs. 2006-08 2014-16 vs. 2006-08 0% 0% 50% 100% 150% 200% 250% 300% 350% -10% Other services -20% Durables -30% FMCG -40% 76% Correlation -50% -60% -70% Financial services -80% 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
The decline in market share reversed immediately 42% 42% Share of membership (%) 42% Brand metrics improved Branded searches increased Acquisition increased 40% Retention increased Despite less discounting 39% 40% 2017 ads 39% 2011 2012 2013 2014 2015 2016 2017 YTD Year SOURCE: AA
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
Recommend
More recommend
