2. A Line in the Sand – Hand & McGrath, 2015
The Value of Advertising?
High Value?
Empirical studies
- PIMS data-base
- Byron Sharp
- Peter Doyle
- Binet & Field
Low Value?
Empirical studies
- Fournaise (2013) survey of 1,200 CEO’s:
- 80% ‘Marketing not connected to business’
- 78% ‘Marketing focus on wrong areas’
- 65% ‘Marketing stuck in ‘La-La’ land’
4. A Line in the Sand – Hand & McGrath, 2015
The Data Set N
• IAPI AdFx Awards cases 2006-2014 106
• Creative Awards 2005 – 2014 38
• Media Spend Data 2007 – 2014 78
• Change in Market Value Share 47
• Attempted ROMI 36
• ESOV 37
• Campaign Type 106
5. A Line in the Sand – Hand & McGrath, 2015
Strengths and Limitations of the Data
• Award winning ‘best practice’
• Primary metric ‘share-of-market-value’
• Size of database
• Key media metric share-of-voice
• Analysis is correlational
6. A Line in the Sand – Hand & McGrath, 2015
3 Challenges
Provide empirical evidence that:
1) Advertising works in terms of commercial pay-back
2) Media investment works in terms of commercial pay-back
3) Creativity works in terms of commercial pay-back?
7. A Line in the Sand – Hand & McGrath, 2015
N=106
8. A Line in the Sand – Hand & McGrath, 2015
The Time Frame of the IAPI Case Studies is Short
N=106
9. A Line in the Sand – Hand & McGrath, 2015
N=106
10. A Line in the Sand – Hand & McGrath, 2015
Objectives employed
by winning campaigns
N=106
11. A Line in the Sand – Hand & McGrath, 2015
Media Usage
by winning
campaigns
N=78* This does not include data for digital, social or inshore media source: AdDynamix all Media advertising expenditure data
12. A Line in the Sand – Hand & McGrath, 2015
1. What evidence is there that
advertising
pays back?
13. A Line in the Sand – Hand & McGrath, 2015
This equates to a value share gain of 0.8%
per month vs 0.5%
N=47
15. A Line in the Sand – Hand & McGrath, 2015
All approaches are effective
16. A Line in the Sand – Hand & McGrath, 2015
Advertising Payback
Value Market Share
Increase - Overall
Value Market Share
Increase - Monthly
Award Winners 6% 0.8%
Non-award Winners 3% 0.5%
17. A Line in the Sand – Hand & McGrath, 2015
Advertising Payback: Key learnings
• Average of almost 6% increase in value share in
winning cases vs 3% in non-winning cases
(0.8% / 0.5% monthly increase)
• All campaign types equally as effective
• Support for both short-term and long-term
campaigns
• Need more cases for long-term evidence
18. A Line in the Sand – Hand & McGrath, 2015
2. What evidence is there that
media investment
pays back?
20. A Line in the Sand – Hand & McGrath, 2015
Media usage in the data set
21. A Line in the Sand – Hand & McGrath, 2015
Media Investment Payback
ESOV 9.63%
Value Market Share Gain: 5.28%
*Based on average data – future analysis would need to
look at change in data over time
N= 37
22. A Line in the Sand – Hand & McGrath, 2015
Media Investment Payback: Key Learnings
• Share-of-voice being in excess of share-of-market
works well as a budgeting strategy
• Awarded campaigns are almost twice as effective as
average campaigns
• These are campaigns that have employed strong
measureable commercial objectives at the outset
• TV was the dominant medium in 62% of awarded
campaigns
23. A Line in the Sand – Hand & McGrath, 2015
Additional Deep Dive Analysis
• 4 Sectors
• Supermarkets, Lagers, Motor and Ham
• Eight Years: 2008-2014
• Key Brands
• Losers and Winners
24. A Line in the Sand – Hand & McGrath, 2015
Long-term
25. A Line in the Sand – Hand & McGrath, 2015
Long Term
Supermarkets
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Long Term
The role of TV with challenger brands
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Long Term
Change in category Media mix
28. A Line in the Sand – Hand & McGrath, 2015
Media Investment Payback
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Media Investment Payback: Key Learnings
• To build market share long-term:
• The budget should be based on the share-of-voice
being in excess of the share-of-market
• A long-term consistent strategy works best
• This approach works across multiple categories
regardless of the economic climate
• Size of brand and sector type also matter
30. A Line in the Sand – Hand & McGrath, 2015
Growth depends on share and excess SOV
31. A Line in the Sand – Hand & McGrath, 2015
3. What evidence is there that
creativity
pays back?
32. A Line in the Sand – Hand & McGrath, 2015
N=39
33. A Line in the Sand – Hand & McGrath, 2015
Summary
• The IAPI AdFx awards are related to strong
increases in commercial value.
• 6% increase in share vs 3% for non winning cases
= 0.8% value share gain per month for winning cases
• Strong relationship between media spend and market
share in dataset.
• Very significant relationship between
media spend and market share long-term
• Directional support for creativity delivering
10 higher levels of campaign SOV efficiency
34. A Line in the Sand – Hand & McGrath, 2015
Next Steps
1. Share/workshop these findings
2. Greater involvement/debate with Boardroom
3. Adfx 2016 - focus on long term evidence
4. Adfx 2016 – collect & analyse more data
5. Best practice evidence sharing across marketing,
agencies & media
36. A Line in the Sand – Hand & McGrath, 2015
References
• Ambler, T. (2004). ‘ROI is dead, now bury it’, Admap, (September), Issue 453, pp. 43-45.
• Ariely, D. (2007). Predictively Irrational. Harperluxe.
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Journal of Consumer Research, 27 (3), pp. 360 – 370.
• Armstrong, J.S. & Schultz, R.L. (1993). Principles Involving Marketing Policies: an empirical assessment. Marketing
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37. A Line in the Sand – Hand & McGrath, 2015
References
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