But innovation has particularly strong activation effects.
Proving the business value and effectiveness of creativity in advertising has long been something difficult to achieve. The optimum balance therefore shifts to 44:56.”, “Activation spend should be relatively heavy when a completely new brand is first launched… 35:65 early on… But once the initial launch phase is over, the brand:activation split should be normalized.”, “Because activation is relatively easy for very big brands, they don’t need to devote such a high proportion of their budget to it. The data reports the nature and circumstances of each campaign and its effects in comparable format and allows us to rate campaigns on a number of effectiveness dimensions. The new study continues to demonstrate the preponderance of emotional communications models amongst creatively awarded campaigns (47% vs 35% for non-awarded campaigns). For equivalent levels of investment, creatively-awarded campaigns achieve broader levels of success across greater numbers of business metrics beyond share growth. Taken from Thinkbox’s new 2020 study, ‘Signalling Success’ this chart looks at the strength of ‘fitness’ and ‘social’ signals across different media channels. Topics include market penetration, brand-building vs. sales activation, emotional vs. rational consideration, share of voice, pricing, and innovation. Relevant search terms: IPA, Gunn report, creativity, creative, effectiveness, fame, buzz. ESOV Efficiency is much higher when there is product innovation, which means that new products get much faster growth for a given advertising …
If you want to make people less price sensitive, you need to engage them emotionally; people are willing to pay more for the brands they love.”, “What about changing price position? Brands that are addicted to minor NPD can end up hopelessly fragmented, leaving potential customers baffled and confused. Buy from Amazon.com. This is not an academic debate.
To purchase a copy of the full IPA report, please visit the IPA website. Indeed, the [principal] reason why market-share effects get smaller as categories mature is that it becomes harder to gain more customers… Whether you’re EasyJet or Emirates, the main way you will sell more flights is by recruiting more customers at your chosen price point, rather than by getting your existing customers to fly more often.”, “Most marketing works by increasing volume. The study is a fusion of the Gunn Report database of creatively-awarded campaigns with the IPA Effectiveness Databank to examine the link between creativity and effectiveness. Core products usually have a bigger sales base and higher margins, both of which boost the ROI from advertising. And when activation is less responsive, you need to spend more your budget on activation.”, “In not-for-profit sectors… relatively high consideration levels and relatively strong emotional decision-making… make brand effects relatively easy to achieve. This gets results faster. Our primary measure of efficiency is based on share of voice [SOV] analysis.”. This study is an analysis of advertising’s ‘signalling’ effect, revealing how media channels differ widely in their ability to communicate vital brand signs. Brand communications create enduring memory structures that increase the base level of demand and reduce price sensitivity… Sales activation triggers these memories and converts them efficiently to immediate sales. You can purchase the updated report in full, from the IPA here. Dowd, author of Stick Figures: Drawing as a Human Practice, An interview with Alastair Thomson author of Cash Flow Surge, Cash Flow Surge: 101 No-Cost and Low-Cost Fast-Action Strategies to Boost Your Cash Flow, Crushing YouTube: How to Make Money on YouTube and Grow a Channel Fast, Beyond the Blue: Artwork and Writing from the Prison Arts Collective, Agility: How to Navigate the Unknown and Seize Opportunity in a World of Disruption, Humans are Underrated: What High Achievers Know that Brilliant Machines Never Will, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life, Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean, Offline brands: 55% brand, 45% activation. on Considerations on ESOV Efficiency and Brand’s sectors, Teaching at the Master in Content Marketing, Data Analysis and Brand Journalism in Milan. The much greater ‘buzz’ effects of creatively-awarded campaigns (buzz has also been shown elsewhere to be strongly linked with effectiveness). But ESOV Efficiency (how fast the brand grows per unit of investment above equilibrium SOV) can change, based on brand’s sector and many other variables: It is perfectly possible to launch a brand without much advertising support, and grow organically.
Creatively-awarded campaigns appear to achieve their greater effectiveness levels with much greater certainty than the non-awarded campaigns: they are more reliable investments. If the creatively-awarded campaigns in the IPA Databank had enjoyed the same level of ESOV as the non-awarded campaigns, they would have resulted in two times more market share growth than the non-awarded campaigns achieved. And increasing volume and price at the same time is even more profitable, if fiendishly difficult.”, “Our model is that there are two ways that advertising can drive sales growth: brand building and sales activation. The analysis examined both effectiveness (a campaign’s ability to drive business effects such as share, sales, profit and loyalty) and the efficiency (share growth per point of Extra Share of Voice) of creatively awarded and non-awarded campaigns. (This compares to the 2010 report which showed that between 1998-2008 campaigns were 11 times more efficient). The findings revealed a direct correlation between strong advertising creativity and business success, and that high levels of creativity make advertising campaigns some 12 times more efficient at increasing a brand’s market share. Post was not sent - check your email addresses! The fusion of the two databases therefore, allowed us to compare levels of creativity with levels of effectiveness to an extent that has not previously been possible. Here the evidence is unequivocal. It is much harder to charge high prices for new products… The only form of innovation that tends to reduce price sensitivity is launching a premium sub-brand… So, innovation is more about gaining customers, increasing volume and gaining market share.
Sorry, your blog cannot share posts by email. The greater the level of creativity (i.e. Note: I have modified the spelling to appease my American spellchecker. As advertisers are forced to look ever harder for an advantage in their marketing communications, creative awards have the potential to provide a constructive stimulus to agencies – if it is indeed true that the winning of creative awards is linked to superior effectiveness. Creatively-awarded campaigns are more effective than non-awarded ones despite lower levels of Extra Share of Voice (ESOV). Effectiveness in Context: A Manual for Brand Building. This is a slow and expensive business, as brand perceptions take time to change… The second option is to launch a premium sub-brand. Intuitively, one might therefore expect that the balance of spend should tilt towards activation as things get more rational. Neuro-Insight analysed their databank of 200 TV ads to uncover which creative factors are most strongly correlated with long-term memory encoding, a proven metric in driving decision making and future behaviour.
ESOV Efficiency is high for launches so launching a premium version tends to be a quicker and less advertising-intensive way to recruit upmarket buyers.
The awards cover TV & cinema, print, online and integrated multi-channel campaigns. On average, brand leaders achieved 1.4% of share growth per 10% of ESOV, compared to 0.4% for challenger brands. Creatively-awarded campaigns are 11 times more efficient than non-awarded ones in terms of the level of market share growth they drive per point of ESOV.
And that is quite a common approach… But in fact that is not the best strategy. Regardless of your category, you need both a strong brand and efficient activation. the more major creative awards a campaign wins) the greater the level of effectiveness. Once you understand the dynamics, you should’t be surprised that the ESOV law is still valid during a recession like the one that almost certainly will be generated by the impact of the COVID-19 virus pandemic. It is important because in many ways it is the mother of the problems we have been identifying: many of the behaviors flow from a fixation with short-term results.”, Binet and Field call out the financial services industry, which “has embraced all of the destructive trends most enthusiastically: short-termism, overactivation, investment reduction, loyalty marketing. We know about ESOV (Excess Share of Voice): brands that set their SOV (Share of Voice) above their SOM (Share of Market) tend to grow, and those that set SOV below SOM tend to shrink. The proportion of creatively-awarded campaigns achieving top box 'fame' (i.e buzz scores) scores has risen dramatically over time from 28% pre-2004 to 70% subsequently. They are focused on a particular behavioral response that may involve an intermediate response action, such as clicking a web link. Increasing prices and margins tends to come later, once the brand is more established, and the product is more familiar.”, “Innovation does boost long-term brand effects if it is major. This simply doesn’t follow.”, “We have seen that marketing is most effective in the early years of a brand’s life, when penetration and market share are low. Similarly, whilst brand building is essential for ESOV Efficiency, strong activation effects are also needed for maximum efficiency. This report drew on analysis of the results of fusing the Gunn Report database of creatively-awarded campaigns with the IPA Effectiveness Databank to examine the link between creativity and effectiveness. Only emotional brand building has the power to reduce price sensitivity and support premium prices.
The non-creative group generated around 0.5 points of share growth per ten points of ESOV (slightly low by the standards of the IPA databank), but the creative group generated an astonishing 5.7 points of share growth per point of ESOV. The main way brands grow is always by expanding their customer base, regardless of whether the category is new or old, fast or slow-growing. Short film: key findings from the research that established the link between creativity and effectiveness plus learnings for advertisers.
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In fact, price-based activation often increases price sensitivity… It is very hard to reduce price sensitivity by rational persuasion.
“The share-of-voice model assumes that for any given level of market share there is an equilibrium level of share of voice… The simplest version of the model assumes that the equilibrium level of SOV is equal to share of market (SOM). But what about efficiency? In fact, there are still almost no successful examples of this in the IPA Databank. Shoppers will try them, but the purchases often cannibalize other variants of the same brand. ESOV Efficiency for online brands is more than double vs. offline brands. ESOV Efficiency is high for launches so launching a premium version tends to be a quicker and less advertising-intensive way to recruit upmarket buyers. But much more dramatic results can be achieved with a big launch campaign.
This tended to mask the headline effects of creativity on effectiveness, but has been allowed for in the analysis to reveal the true underlying effect.
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