Brent Smart, the insurance provider’s chief marketing officer, has crafted a deceptively simple plan: namely, selecting one region within Australia, and making a commitment to only run brand-building activities in this area for the next two years.
“I think it’s really easy to prove how short-term tactics work, especially in digital. We’ve all got the dashboards,” he told delegates at Advertising Week APAC, a conference held in Sydney, Australia. (For more read WARC’s report: Insurance Australia Group taps spirit of Binet and Field in a two-year marketing test)
“And there’s been this argument that we should be building brands in the long-term, but it’s really hard to prove. You can get the research, the literature, and all the IPA [and] Effies papers, but how do you actually prove it?”
Smart spent two years lobbying for his region-specific marketing solution. And, he pointed out, there is suitable advice on hand regarding how IAG might seek to boost growth in this localised area, in the form of a brand’s excess share of voice (ESOV).
To calculate this figure, a marketer needs to compare their brand’s market share with its proportion of advertising in a given category. Subtracting the former total from the latter, in fact, will reveal their ESOV – an indicator that Les Binet and Peter Field, frequently dubbed the “godfathers of marketing effectiveness”, have found to be a key driver of growth.
An underlying problem for Smart’s team involves a marketing law of large numbers: IAG logged US$8.12bn in revenue in 2017 – its last full financial year, as the organisation’s fiscal calendar spans the 12-month period until early August – and already boasts a significant level of ad expenditure.
“It’s hard for big, market-leading brands, because we have a big market share, and that’s a big investment [to achieve ESOV]. It’s much easier for smaller brands to spend above their market share and grow,” Smart explained.
“I’m not going to get the tens of millions of dollars to do it everywhere. But I can get enough to do it for one region, just spend the money on [the] brand, hold for two years, and see what happens,” he said.
Sourced from WARC