THE FINANCIAL CONTEXT · 2018-11-23 · Newsbrands Search The Media Landscape in 2016 Total video OOH Radio Email Social networking Texting Internet for work Cinema Subscriber VoD

THE FINANCIAL CONTEXT

Our research

Are there rules for effectiveness?How to balance short & long term?

Are the rules changing?How do they vary by context?

The fundamental principle:brand vs activation

Sale

s u

plif

t o

ver

bas

e

Time

Source: Binet & Field 2013

Brand vs Activation

Sales activationImmediate sales response

High efficiency & ROI

Sale

s u

plif

t o

ver

bas

e

Time


Brand vs Activation



Brand buildingLong term growth in base sales

Reduced price sensitivity

Activation effects dominatein short term (~6 months)

Sale

s u

plif

t o

ver

bas

e

Time


Brand vs Activation



Brand buildingLong term growth in base sales

Reduced price sensitivity

But brand is main driver of growth & profit

Brand building is the main driver of effectiveness in all sectors

0.90.9

0.8

1.0

0.7

1.3

1.2

1.61.6

1.6

2.5

2.02.1

1.8

2.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Durables FMCG Financial services Other services Retail

Nu

mb

er

of

very

larg

e b

usi

ne

ss f

x.

Sector

Number of brand effects reported

0 1 ≥2

Source: IPA Databank, 1998-2016 for-profit cases

Brand & activation work in synergy

All categories

17%

36%

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0 1 ≥2

% v

ery

larg

e a

ctiv

atio

n f

x.

Number of very large brand effects


Financial services

25%

38%

42%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0 1 ≥2

% v

ery

larg

e a

ctiv

atio

n f

x.

Number of very large brand effects

Maximising effectiveness for financial services

Penetration first, loyalty second

All categories

31%

14%

0%

5%

10%

15%

20%

25%

30%

35%

Penetration Loyalty

% c

amp

aign

s w

ith

VL

fx

All cases

Financial services


43%

18%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Penetration Loyalty

% c

amp

aign

s w

ith

VL

fx

Financial services

Penetration is always the main driver of growth.Loyalty-first strategies always under-perform.

Reach trumps targeting

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

Loyalty strategy Acquisition strategy Reach strategy

An

nu

al

mk

t. s

ha

re g

row

th

Base: 2008-16 IPA cases

Reach explains ~90% of variations in

media effectiveness

Maximise mental availability

Awareness Salience Fame

Passively accept brand Actively seek brand Influence & advocacy

Increasing returns

Fame increases efficiency x 4 and maximises profit

Messages vs emotions

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Rational Combined Emotional0%

10%

20%

30%

40%

50%

60%

70%

80%

Rational Combined Emotional

Brand effectsActivation effects


Emotional brand building works best, even for “rational” & highly researched purchases

Invest in share of voice

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

No evidence that the rule is changing

Balance the budget

0

0.5

1

1.5

2

0 10 20 30 40 50 60 70 80 90 100

Numberofbusinesseffectsreported

%Budgetallocatedtobrandbuilding


60:40 sweet spot

20% loss of effectivenessBrand remains strong

56% loss of effectivenessBrand weakens

Principles of balance

If activation is easy, down-weight it

6169

3931

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Low consideration High consideration

Op

tim

um

Bra

nd

/act

ivat

ion

sp

lit

Nature of purchase decision

If brand is easy, down-weight it

76

55

24

45

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Low High

Op

tim

um

Bra

nd

/act

ivat

ion

sp

lit

Role of emotions in purchase decision

Budgeting for financial brands


62%

80%

38%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All cases Financial services

Brr

and

/act

ivat

ion

sp

lit

0.06

0.15

0.0

0.0

0.0

0.1

0.1

0.1

0.1

0.1

0.2

All cases Financial services

ESO

V e

ffic

ien

cy

Media implications

Sales activation

Tight targeting

Responsive

Informative

Brand building

Broad reach

Memorable

Emotional

Online & offline, video formats work best

0

10

20

30

40

50

60

70

80

90

100

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Wee

kly

Rea

ch (

% A

du

lts)

Average Hours Per Day (Across All Adults)

MessagingShopping/transacting

Online video

Broadcast TV

Other onlineNewsbrands

Search

The Media Landscape in 2016Total video

OOH

Radio

Email

Social networkingTexting

Internet for work

Cinema

Subscriber VoD

The Media Landscape in 2017

Source: IPA Touchpoints

Digital makes everything work harder

27%

22%

13% 14%

40%

27%

22%

27%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

TV Press Radio Outdoor

% in

cre

ase

in a

vg. n

o. V

L b

usi

ne

ss e

ffe

cts

fro

m a

dd

ing

Web 1.0 (1998 - 2006) Web 2.0 (2008* - 2016)Source: IPA Databank*Outdoor = 2012 - 2016

But effectiveness is being compromised

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

0% 50% 100% 150% 200% 250% 300% 350%

Loss

of

effe

ctiv

enes

s 2

01

4-1

6 v

s. 2

00

6-0

8

Growth of short-termism 2014-16 vs. 2006-08

76% correlation

Other services

Financial services

Durables

FMCG

Retail


Financial firms are under-investing in their brands

-30

-20

-10

0

10

20

30

40

2000 2002 2004 2006 2008 2010 2012 2014 2016

% b

ud

get

allo

cate

d t

o

bra

nd

-bu

ildin

g vs

. op

tim

um

4 years ending


Breaking out of the short-term mindset: AA Roadside Assistance• Brand activity cut in favour of “hard working” activation

• Initial discounts used to entice new members

• Renewal price hikes used to make up profit

• Highly profitable in the short term, but…

• Brand metrics in free fall

• Whole category becoming commoditised

• Angry customers, churn increasing

• Bigger and bigger discounts required

• Market share declining

• Complete collapse predicted in five years

AA “Singing Baby” campaign

42%42%

40%

40%

39%

39%

42%

2011 2012 2013 2014 2015 2016 2017 YTD

Shar

e o

f m

em

be

rsh

ip (

%)

Year

The decline in market share reversed immediately

SOURCE: AA

2017 ads

Brand metrics improvedBranded searches increased

Acquisition increasedRetention increased

Despite less discounting

Key conclusions

• Financial services follows the same broad rules as other categories.

• Brand-building is the main driver of long-term growth and profit.

• Sales activation plays a secondary role, increasing short-term efficiency.

• But sales activation is unusually efficient in financial services.

• This mean financial firms can afford to spend less on activation, allowing them to achieve faster growth on smaller budgets.

• But it also means they need to spend a higher % of their budget on brand-building.

• Since 2008, financial firms have slashed brand budgets in favour of short-term activation. As a result, financial services has been the worst-performing category for marketing effectiveness.

• Financial firms need to re-invest in brand-building in order to exploit the full potential of marketing in the digital era.

Published Jul 2018www.APG.org.UK

Published Oct 2018www.IPA.co.uk

[email protected]

John AlmondMarketing Communications Strategy Consultant

“The world today is all about karaoke, doing a bad impression of someone else’s great original”

Great marketing communication starts and ends with the client brief

The impetus to, “create ideas that suck the air from the room”

Does your agency understand the reality of your company’s culture?Do you understand the agency’s culture?

The brief’s target audience is the agency not your company

Your brief is competing with other briefs

“To write a good brief you need to know where you are, where you want to go and how you are going to get there. To do these things you must draw on experience, listen and be a hard thinker. To be a hard thinker you need to allow your mind space and time. And to get people to put your ideas into actions you must put them over with confidence and an optimism that is contagious in a simple, straightforward manner which is backed by the fullest information”

Jane Frazer – double Oscar winner

Brief for fame or brief for shame?

Dear Chris, Ashley, and all the diabolical genius at Nerdist Industries.Just who do you think you are to try to bribe me into anapperance on your ‘thing’ with this gift of the most fantasticCornona Silent typewriter made in 1934?You are out of your minds if you think… that I… wow, thisthing has great action… and this deep crimson color… Wait! I’m not so shallow as to… and it types nearly silently…Oh, OKAY!I will have my people contact yours and work out some kindof interview process… Damn you all to hell,

“Disconnect between an assumed consumer reality and the brand’s pompous promise”

What would we like the target audience to think, feel and believe as a result of absorbing our communication?

OMG! Thanks to Coral my kid’s clothes are cleaner than ever!

We ignore consumers on a regular basis

Do we really get the consumer?

Getting under the skin of consumers – a lesson from the Metropolitan Police.How to make consumer connections.

Create your own incident room

It can take 10-15 attempts before a little one will try a new food

Young children (babies) accentuate other senses

Approach things from a child’s point of view

A simple question. What do you want?

• Open seven days a week• 8 a.m. to 8 p.m. on a weekend• Staff there at lunch breaks• Open an account immediately• Cards and cheque book issued

immediately• Dog bowls, baby changing

facilities etc.

Music can isolate you from the stresses that constantly surround you. Beats by Dre

It’s one of those quirky creative truths that the more personal the story you tell, the more universally people feel it

“People remember moments”

あなたの娘の笑顔があります。

You have your daughter’s smile

Alexander Melamid & Vitaly Komar

America’s Most Wanted Painting

Denmark’s Most Wanted Painting

France’s Most Wanted Painting

Kenya’s Most Wanted Painting

China’s Most Wanted Painting

Documents

THE FINANCIAL CONTEXT · 2018-11-23 · Newsbrands Search The Media Landscape in 2016 Total video OOH Radio Email Social networking Texting Internet for work Cinema Subscriber VoD