Australian Advertising Effectiveness Rules, a new report by effectiveness experts Peter Field and Rob Brittain, in association with the Communications Council, takes a deep look at the new Australian Effies database. Here’s a breakdown of the findings.
For a long time, the Australian market has been a hotbed of innovative advertising ideas, and the most effective of those win Effies. (WARC subscribers can access the case studies here.)
The report explores whether the results of Field’s work with Les Binet in analysing the IPA Databank in the UK also apply to the Australian market.
Noting the climate of low economic growth in Australia, Brittain describes how “environment creates more pressure for marketers to prove the effectiveness of their investment and can lead to a shift in focus towards efficiency.
“However the answer lies in understanding effectiveness, and through this understanding, marketing investment works at its hardest, delivering the future revenue growth that businesses need.”
Here are the four lessons.
Broad targeting leads to growth
“Broad targeting remains the more effective approach due to its ability to acquire new customers and, in doing so, delivering a larger impact on brand profit growth,” the report states. Broad targeting is here defined as the whole market or category; narrow targeting is defined as existing users of the brand.
While a narrow target will deliver a greater return in sales, it is far less likely to bring in the amount of new customers that broad targeting can. In addition, of campaigns targeted broadly, 29% reported very large effects in profit growth compared to just 4% of narrowly targeted campaigns.
“Critically for the long term, stronger effects are also seen in creating distinctive associations for the brand.”
Long-duration campaigns deliver stronger business effects
This is because only a small percentage of new customers tend to be in the market at a given time. Therefore, longer duration campaigns are able to communicate to far more people as they’re close to making a decision. The result is a larger cumulative effect over the duration of the campaign.
Of course, the authors note that the results reflect the differing objectives of long- and short-term campaigns. “Shorter duration campaign objectives are more likely to focus on business metrics such as driving a short-term sales response and less likely to focus on longer term metrics such as market share growth and brand profit growth.”
Balance is difficult, although the 60:40 split between long-term brand building and short-term activation outlined in previous Binet and Field work is a guideline. The authors note that they are unable to test the 60:40 hypothesis on the Effies papers.
As Hannah McHard, Insights and Strategy manager at the supermarket chain Aldi, notes in the report, stand out campaigns “are made by those willing to accept that the full returns may come much later, but they invest in long-lasting ideas that can evolve and endure”. Consistency and an idea for the long-term are at the heart of the most successful brands.
Marketers risk jumping the gun in campaign evaluation.
“Brand advertising is a subtle force that takes time to build” – it makes sense that you need to take time to evaluate it too. There is a tension, meanwhile, between knowing whether the campaign is working and giving the campaign long enough to make its full impact, the report says.
The key difference is that longer evaluations (more than six months) are better placed to take into account the long-term formation of memory structures that help a brand to be chosen when the customer is in-market than short evaluations (fewer than six months). As such, the metrics that relate to memory – building mental availability, product knowledge, and distinctive associations – tend only to reveal themselves in a longer evaluation.
However, if a campaign is planned for the short-term, measuring long effects won’t reveal anything special. The “databank suggests that the business effects seen early on in short campaigns are typically as good as it gets”.
The report continues: “If long-duration campaigns are evaluated over a shorter time frame they can be viewed as being no more effective than short-term campaigns and a series of short campaigns could be considered a viable alternative. This could be a damaging decision for brand growth.”
In particular, it would omit the measurement of some business metrics that really matter: market share growth, and, crucially, greater pricing strength. Though pricing metrics are rarely reported in case studies, the importance of such a metric relates directly to profitability.
Short duration evaluations for long-term campaigns could obscure their value, in short.
“It is much more effective to run longer duration campaigns than a series of short campaigns. Longevity is the most important thing”, the report finds.
Emotional campaigns are more effective at building long-term market share growth
Similarly, emotional campaigns are effective in that they require lower levels of “excess share of voice” (ESOV) – in other words, less budget – than rational campaigns to deliver an equivalent effect. This is very much in line with Binet and Field’s previous work which has shown how emotional campaigns impact the metrics related to memory structures.
Yet, emotional campaigns do not discount the utility of rational messaging. “Emotional campaigns show greater impact on long-term market share growth; rational campaigns show greater impact on acquiring new customers.
“Both are critical to brand profitability but work over different time horizons”, the report finds.
The findings were announced this week at special events in Melbourne and Sydney.
Sourced from the Australian Effies, Communications Council; additional content by WARC staff