LONDON: Advertising campaigns aimed at the mass market deliver stronger business results than more targeted efforts to reach consumers, new research supported by the IPA and Thinkbox has found.
The IPA has commissioned a report, "Advertising effectiveness: the long and short of it", analysing 1,000 entries to the IPA Effectiveness Awards. It builds on a previous study, "Marketing in the era of accountability", published by Warc.
Overall, the latest round of research found that campaigns aimed at a brand's existing customers yielded an average of 2.2 "very large business effects", such as significantly impacting profits, market share and the level of price elasticity.
This figure rose to 5.6 when discussing initiatives intended to attract new customers, and 6.7 when the whole market was the area of focus.
Les Binet and Peter Field, co-authors of the study, said: "These findings contradict some fashionable thinking in modern advertising, where increasing emphasis is placed on nurturing a one-to-one connection with customers.
"The truth is that the vast majority of people have better things to do with their lives than to form deep and meaningful relationships with brands. Advertisers should not chase loyalty from customers but should speak to as broad an audience as possible and do so over the long term."
Similarly, all of the campaigns assessed that ran for at least three years saw "very large" profit gains, a total standing at 83% where they lasted for two years and 38% when they endured for a year.
"Obsessing solely about short-term sales is self-defeating; brands must be in it for the long term as that is where the greater success lies," Binet and Field stated.
When discussing individual media, the number of business effects rose by 41% if TV was involved, a total standing at 16% for posters, and 14% for both radio and press. Sponsorship, online and PR all logged 13% on this metric.
Among brands with a higher proportion of category advertising than sales, thus boasting an "excess share of voice", TV was especially efficient at maximising the benefits of this extra spending when it came to driving market share growth.
More specifically, campaigns utilising television were over five times more efficient in this area than those without broadcast ads. "TV is particularly effective for long-term success," Binet and Field said.
In terms of delivering a substantial impact on profits, emotional campaigns also yielded an efficiency rating of 29%, compared with a total of 16% for equivalent efforts based on more rational appeals.
Data sourced from IPA/Thinkbox; additional content by Warc staff