LONDON: Brands in the FMCG sector hoping to improve their overall market share need to invest in increasing their "share of voice" in order to achieve this goal, a new report by the IPA and Nielsen Analytic Consulting shows.
Prior research into successful marketing strategies during periods of financial instability has revealed that reducing advertising expenditure levels in response to an economic slowdown can damage a brand's position both during and after a recession.
The IPA has also previously published an analysis of over 880 entries to its annual Effectiveness Awards, which demonstrated that a company's "share of voice" in its sector can demonstrably be linked to its "share of market".
In an effort to build on this work, Nielsen studied 123 FMCG brands across 30 different categories, from yoghurts and soft drinks to smoking aids.
The research firm based its findings on a range of media and retail audit data, and assessed products of varying sizes and performance histories.
It found that the "average" campaign for an "average" brand that increased its share of voice by ten percentage points over and above its share of category sales typically enjoyed an uptick of 0.5% in its total market share as a result.
This outcome was "accelerated" in the case of "brand leaders", where a 10% "excess share of voice" delivered an extra 1.4 percentage points of market share, compared with an improvement of 0.4 percentage points for "challenger brands".
One conclusion that can be drawn from these figures is that challenger brands effectively need their campaigns to be 3.5 times more effective than their larger competitors to achieve the same results.
This also means smaller players "are unlikely to prosper by playing by the same rules as the brand leader," and need a "radically different" approach, Nikki Clarke, of Nielsen Analytic Consulting, said.
Case studies submitted by FMCG brands to the IPA Effectiveness Awards – regarded as a "best in breed" by the industry body – were also found to be 60% more effective than the average.
Similarly, communications based on "new news", such as a product launch or re-launch, also registered an improvement of between 15% and 25% compared with the norm.
Rory Sutherland, president of the IPA, argued that "in a recession such as this, there is a double-whammy effect which makes buying excess share of voice markedly cheaper. Not only are media costs falling but so are levels of competitor spending."
"This provides a strong case for bravery for anyone who sees the recession as an opportunity to steal a march on competitors – and take market share from competitors which they may find ruinously expensive to buy back when the economy improves," he added.
Prior research into successful marketing strategies during periods of financial instability has revealed that reducing advertising expenditure levels in response to an economic slowdown can damage a brand's position both during and after a recession.
The IPA has also previously published an analysis of over 880 entries to its annual Effectiveness Awards, which demonstrated that a company's "share of voice" in its sector can demonstrably be linked to its "share of market".
In an effort to build on this work, Nielsen studied 123 FMCG brands across 30 different categories, from yoghurts and soft drinks to smoking aids.
The research firm based its findings on a range of media and retail audit data, and assessed products of varying sizes and performance histories.
It found that the "average" campaign for an "average" brand that increased its share of voice by ten percentage points over and above its share of category sales typically enjoyed an uptick of 0.5% in its total market share as a result.
This outcome was "accelerated" in the case of "brand leaders", where a 10% "excess share of voice" delivered an extra 1.4 percentage points of market share, compared with an improvement of 0.4 percentage points for "challenger brands".
One conclusion that can be drawn from these figures is that challenger brands effectively need their campaigns to be 3.5 times more effective than their larger competitors to achieve the same results.
This also means smaller players "are unlikely to prosper by playing by the same rules as the brand leader," and need a "radically different" approach, Nikki Clarke, of Nielsen Analytic Consulting, said.
Case studies submitted by FMCG brands to the IPA Effectiveness Awards – regarded as a "best in breed" by the industry body – were also found to be 60% more effective than the average.
Similarly, communications based on "new news", such as a product launch or re-launch, also registered an improvement of between 15% and 25% compared with the norm.
Rory Sutherland, president of the IPA, argued that "in a recession such as this, there is a double-whammy effect which makes buying excess share of voice markedly cheaper. Not only are media costs falling but so are levels of competitor spending."
"This provides a strong case for bravery for anyone who sees the recession as an opportunity to steal a march on competitors – and take market share from competitors which they may find ruinously expensive to buy back when the economy improves," he added.
Data sourced from IPA; additional content by WARC staff
