Peter Field on maximising campaign efficiency using the IPA Effectiveness Databank

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Marketing consultant Peter Field talks about maximising campaign efficiency in advertising using key learnings from the treasure trove of knowledge that is the IPA Effectiveness Databank. This presentation was shown at the IPA's Performance Adaptathon in London on 8th July 2014. Find out more at http://www.ipa.co.uk/effectiveness and join in the conversation on Twitter using #IPAEff.

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Peter Field on maximising campaign efficiency using the IPA Effectiveness Databank

  1. 1. Maximising Efficiency Key learning from the IPA Databank
  2. 2. • 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.
  3. 3. “Long-term results cannot be achieved by piling short-term results on short-term results.” Peter Drucker, 1993
  4. 4. This presentation • 5 drivers of efficiency • 5 implications for performance measurement
  5. 5. What do we mean by efficiency? 0% 2% 4% 6% 8% 10% 12% 0% 2% 4% 6% 8% 10% 12% Shareofvoice Share of market SOV > SOM: brands tend to grow SOV < SOM: brands tend to shrink Equilibrium: SOV = SOM
  6. 6. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% -20% 0% 20% 40% 60% 80% 100% AnnualMarketShareGain ESOV (SOV minus SOM) What do we mean by efficiency? Share growth α 0.04 x ESOV Above average Below average Growth Investment
  7. 7. Drivers of efficiency
  8. 8. 1. Balanced campaign of long-term brand- driven growth and short-term activation The 60:40 rule
  9. 9. Salesupliftoverbase Time Sales activation Big direct effect, but decays quickly. Brand building Smaller effect on all metrics. Decays slowly. Two ways marketing can affect sales
  10. 10. Salesupliftoverbase Time Sales activation Short term sales uplifts, but no long term growth Brand building Long term sales growth Brand building drives long-term growth Short term effects dominate ~6 months
  11. 11. Different time-frames favour different strategies 0% 10% 20% 30% 40% 50% 60% 0-3 months 3-6 months 6+ months Sharegrowtheffects Campaign evaluation period ADMA data Brand- building Activation
  12. 12. For maximum profit, you need both 0% 5% 10% 15% 20% 25% 30% Brand buiding Both Sales activation Profiteffect Campaign objectives
  13. 13. For maximum efficiency, you need both 0.0 0.1 0.2 0.3 0.4 0.5 Brand buiding Both Sales activation ESOVEfficiency Campaign objectives
  14. 14. Balance is important to effectiveness
  15. 15. Balance is very important to efficiency Optimum: ~35%
  16. 16. Balance is very important to efficiency The 60:40 rule Brand:Activation
  17. 17. 2. Pricing effects
  18. 18. Volume is not enough 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Neither Sales/share only Price only Both Profiteffect Improvements reported in…
  19. 19. Volume is not enough 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Neither Sales/share only Price only Both ESOVEfficiency Improvements reported in… Insufficient data
  20. 20. But price effects are long term 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 3 months 6 months 1 year 2 years 3 years Pricingeffect Campaigns periods up to
  21. 21. Brand building is key to lower price sensitivity 0% 2% 4% 6% 8% 10% 12% 0 1 2 3 4+ Priceeffect Number of brand metrics improved
  22. 22. 3. Emotional engagement
  23. 23. Emotional campaigns work harder 0% 2% 4% 6% 8% Rational Combined Emotional Price effect NONE 0.0 0.1 0.2 0.3 0.4 0.5 0.6 Rational Combined Emotional ESOV Efficiency
  24. 24. 4. Fame
  25. 25. Fame drives volume and pricing 0.0 0.5 1.0 1.5 2.0 Fame campaigns Other campaigns SOV Efficiency 0% 2% 4% 6% 8% 10% Fame campaigns Other campaigns Price effect 4:1
  26. 26. 5. Creativity
  27. 27. Creativity amplifies fame 0.0 1.0 2.0 3.0 4.0 Creatively awarded Not creatively awarded SOV Efficiency 0% 2% 4% 6% 8% 10% Creatively awarded Not creatively awarded Price effect 10:1
  28. 28. And creativity is getting more efficient 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Up to 2002 Post 2002 ESOVefficiency
  29. 29. Implications for performance measurement
  30. 30. A challenge for performance measurement 19% 31% 27% 26% 35% 0% 5% 10% 15% 20% 25% 30% 35% 40% Creatively awarded Not creatively awarded Emotional campaigns Fame campaigns Rational campaigns Short-termactivationeffects
  31. 31. Pre-testing has promoted short-term effects -15% -10% -5% 0% 5% 10% 15% ≤ 6 months 1 year 2+ years Uplifttocampaignsaleseffects pretestedminusnon-pretested Campaign duration
  32. 32. Balancing the metrics 1. Beware of quarterly sales measures or shorter-term activation sales as a sole measure of success: balance short term sales responses with long-term metrics: – Year-on-year sales uplifts – econometrics will help apportion these to the campaign – Annualised efficiency – ESOV is not a short-term metric – Price elasticity - econometrics will be needed
  33. 33. Balancing the metrics 2. Beware persuasion scores as a sole measure of success: balance these with emotional responses and emotional brand equity shifts: these relate to long-term effects 3. Measure buzz and advocacy 4. Encourage creativity – reward major achievements 5. Aim for a balanced scorecard of a wide range of short and long-term metrics – the more metrics, the more reliable the indication.
  34. 34. www.ipa.co.uk/content/the-long-and-the-short-of-it Thank you

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