THE FINANCIAL CONTEXT · 2018-11-23 · Newsbrands Search The Media Landscape in 2016 Total video...
Transcript of THE FINANCIAL CONTEXT · 2018-11-23 · Newsbrands Search The Media Landscape in 2016 Total video...
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
Source: Binet & Field 2013
Brand vs Activation
Sales activationImmediate sales response
High efficiency & ROI
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
Source: Binet & Field 2013
Brand vs Activation
Sales activationImmediate sales response
High efficiency & ROI
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
Source: IPA Databank, 1998-2016 for-profit cases
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
Source: IPA Databank, 1998-2016 for-profit cases
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
Source: Binet & Field 2013
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
Source: IPA Databank, 1998-2016 for-profit cases
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
Source: IPA Databank, 1998-2016 for-profit cases
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
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
Source: IPA Databank, 1998-2016 for-profit cases
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
Source: IPA Databank, 1998-2016 for-profit cases
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.
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