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Advertising effectiveness: the long and the short of it
Les Binet
Head of Effectiveness, adam&eve DDB
• Analysis of 996 IPA cases over 30 years.
• Covers 700 brands in 83 categories.
• Identifies the ingredients for effectiveness, over the short and long term.
• “Effectiveness” measured in hard business terms.
How advertising pays back
Sale
s u
plif
t o
ver
bas
e
Time
Two kinds of effect
Sales activation Short term sales uplifts, but no long term growth
Brand building Long term sales growth
Source: Binet & Field 2013
Volume is not enough
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Neither Sales/share only Price only Both
Pro
fit
eff
ect
Improvements reported in… Source: Binet & Field 2013
Brand building reduces price sensitivity
0%
2%
4%
6%
8%
10%
12%
0 1 2 3 4+
Pri
ce e
ffe
ct
Number of brand metrics improved Source: Binet & Field 2013
For maximum profit, you need both
0%
5%
10%
15%
20%
25%
30%
Brand buiding Both Sales activation
Pro
fit
effe
ct
Campaign objectives
Implications for targeting
Talk to all your prospects
Long term prospects
Immediate prospects
Customer base Short term
sales activation
Long term brand building
Source: Binet & Field 2013
Broad reach means bigger profits
0%
5%
10%
15%
20%
25%
30%
35%
Target existing customers Target new customers Target whole market
Pro
fit
effe
ct
Source: Binet & Field 2013
Share of mind
Mental availability
Awareness Salience Fame
Heard of brand, know about brand
Brand comes easily to mind,
familiarity
Social amplification, herd effects
Increasing returns
Short or long term, share of mind is crucial.
Fame increases efficiency x 4
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
Fame campaigns Other campaigns
An
nu
alis
ed
ESO
V e
ffic
ien
cy
The role of emotion
Rational & emotional campaigns work differently
0%
5%
10%
15%
20%
25%
30%
35%
40%
Rational Combined Emotional
0%
10%
20%
30%
40%
50%
60%
70%
80%
Rational Combined Emotional
Brand effects Activation effects
Source: Binet & Field 2013
Emotions drive long term profits
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1 year 2 years 3+ years
Pro
fit
effe
ct
Emotional campaigns
Rational campaigns
Source: Binet & Field 2013
Media implications
Key ingredients for brand building
Emotion
Fame Reach
TV has all three ingredients
TV boosts efficiency
0,0
0,1
0,2
0,3
0,4
0,5
0,6
Used TV Did not use TV
An
nu
alis
ed
ESO
V
effi
cie
ncy
Efficiency of TV is increasing
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1980-2002 2004-2010
An
nu
alis
ed
ESO
V
effi
cie
ncy
TV cases
The role of creativity
Creativity boosts efficiency x 10
0,0
0,5
1,0
1,5
2,0
2,5
3,0
Creatively awarded Not creatively awarded
An
nu
alis
ed
ESO
V e
ffic
ien
cy
Budgets
Budgets still matter
0%
2%
4%
6%
8%
10%
12%
0% 2% 4% 6% 8% 10% 12%
Shar
e o
f vo
ice
Share of market
SOV > SOM: brands tend to grow
SOV < SOM: brands tend to shrink
Equilibrium: SOV = SOM
Source: Binet & Field 2013
0
1
2
3
4
5
6
7
8
9
10
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
No
. of
bu
sin
ess
eff
ect
s
Activation share of budget
Optimum mix: ~60% brand, ~40% activation
Budgets must be balanced
Source: Binet & Field 2013
Case study: John Lewis
John Lewis ad here
Sources: John Lewis, Mintel
22,0%
23,0%
24,0%
25,0%
26,0%
27,0%
28,0%
29,0%
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Shar
e o
f d
ep
artm
en
t st
ore
sal
es
John Lewis market share
adam&eveDDB
Bear &
Hare
Implications for evaluation
Short term metrics are not enough
0%
5%
10%
15%
20%
25%
30%
35%
Rational Combined Emotional
Profit effect
0%
10%
20%
30%
40%
50%
Rational Combined Emotional
Direct response effect
Source: Binet & Field 2013
The balanced scorecard
Long term growth
Price elasticity
Brand equity
Implicit, emotional responses
Creativity & fame metrics
Share of voice
Explicit communication & persuasion scores
On & offline responses
Short term sales
Short term metrics
Long term metrics
www.ipa.co.uk/content/the-long-and-the-short-of-it
Les.Binet@adamandeveddb.com
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