previous research and this - effworks · 500 digital era for-profit cases 120 not-for-profit ... 0%...

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

Sale

s u

plif

t o

ver

bas

e

TimeSource: Binet & Field 2013

Two ways marketing works

Sales activationShort term sales uplifts

Brand buildingLong 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, LowActivation

Low Brand, HighActivation

High Brand, LowActivation

High Brand, HighActivation

Nu

mb

er

of

very

larg

e b

usi

ne

ss f

x

Balance of brand and activation effectsSource: 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%

0 1 ≥2

% R

ep

ort

ing

very

larg

e a

ctiv

atio

n f

x.

Number of very large brand effects reportedSource: IPA Databank, 1998-2016 for-profit cases

The principles of balance

Brand-Activation balance matters

0

0.5

1

1.5

2

0 10 20 30 40 50 60 70 80 90 100

Numberofbusinesseffectsreported

%Budgetallocatedtobrandbuilding

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

Peak at 62% brand

20% loss of effectivenessBrand remains strong

56% loss of effectivenessBrand 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

Op

tim

um

Bra

nd

/act

ivat

ion

sp

lit

Nature of purchase decision

Activation

Brand


When brand building is easy, up-weight activation

7655

2445

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Low High

Op

tim

um

Bra

nd

/act

ivat

ion

sp

lit

Role of emotions in purchase decision

Activation

Brand


Flexing the rules by context

Factors that modify the rules

Online research makes activation easier


27%

32%

0%

5%

10%

15%

20%

25%

30%

35%

Low research High research

V L

arge

Act

ivat

ion

fx

55

74

45

26

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Low research High research

Brr

and

/act

ivat

ion

op

tim

um

Online selling makes activation easier


30%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Offline brand Online brand

V L

arge

Act

ivat

ion

fx.

55

74

45

26

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Offline brand Online brand

Brr

and

/act

ivat

ion

op

tim

um

Subscription makes activation easier


31%

37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Series Subscription

V L

arge

Act

ivat

ion

fx.

57

74

43

26

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Series Subscription

Brr

and

/act

ivat

ion

op

tim

um

Innovation makes activation easier


28%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

No innovation Any innovation

V L

arge

Act

ivat

ion

fx.

6172

3928

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No innovation Any innovation

Brr

and

/act

ivat

ion

op

tim

um

Brand effects are biggest for new brands


1.9

1.6

0.0

0.5

1.0

1.5

2.0

New brand Established brand

Nu

mb

er

of

Bra

nd

fx.

5663

4437

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

New brand Established brand

Brr

and

/act

ivat

ion

op

tim

um

Activation gets easier as brands grow

Source: IPA Databank, 1998-2016 for-profit casesBig brands = Top 33% by market share

28%30%

0%

5%

10%

15%

20%

25%

30%

35%

Average brand Big brand

V L

arge

Act

ivat

ion

fx.

6276

3824

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Average brand Big brand

Brr

and

/act

ivat

ion

op

tim

um

Brand is the key to premium pricing

5764

4336

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Value/mid-market Premium


0%

2%

4%

6%

8%

10%

12%

0 1 2 3+

% R

epo

rtin

g ve

ry la

rge

pri

ce s

en

siti

vity

red

uct

ion

Number of very large brand effects recorded

How does this affect sectors?

Brand building always drives long-term effectiveness

0.9 0.90.8

1.0

0.7

1.31.2

1.6 1.61.6

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

Nu

mb

er

of

very

larg

e b

usi

ne

ss f

x.

Sector

Number of brand effects reported

0 1 ≥2


Brand & Activation potential vary widely

31%

26%

36%

44%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Durables FMCG Financialservices

Otherservices

Retail

Ver

y la

rge

acti

vati

on

fx.

Short-term activation effects


2.1

1.7 1.61.8

1.0

0.0

0.5

1.0

1.5

2.0

2.5

Durables FMCG Financialservices

Otherservices

Retail

Nu

mb

er o

f ve

ry la

rge

bra

nd

fx.

Brand effects

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

58 6080

5164

42 4020

4936

0

10

20

30

40

50

60

70

80

90

100

Durables FMCG Financial services Other services Retail

Op

tim

um

bu

dge

t sp

lit % Activation

Brand


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

Op

tim

um

bu

dge

t sp

lit

Activation

Brand

Source: IPA Databank, 2012-2016 not-for-profit cases

Brand building is becoming more important, not less

55 57 6376

45 43 3724

0

10

20

30

40

50

60

70

80

90

100

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

Op

tim

um

bu

dge

t sp

lit %

Period

Activation

Brand


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

effe

ctiv

enes

s 2

01

4-1

6 v

s. 2

00

6-0

8

Growth of short-termism 2014-16 vs. 2006-08

76% Correlation

Other services

Financial services

Durables

FMCG

Retail


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

42%42%

40%

40%

39%

39%

42%

2011 2012 2013 2014 2015 2016 2017 YTD

Shar

e o

f m

em

be

rsh

ip (

%)

Year

The decline in market share reversed immediately

SOURCE: AA

2017 ads

Brand metrics improvedBranded searches increased

Acquisition increasedRetention 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

previous research and this - effworks · 500 digital era for-profit cases 120 not-for-profit ... 0%...

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