It’s a question that can be asked in many areas of life. What should we focus on - long-term goals that require us to hold our nerve in the volatile here and now? Or short-term targets that can yield almost-immediate success. Of course, it’s easy to answer, “long term!” But in reality, it’s not always so simple to put this pragmatism into practice. But it’s a question that many marketers are not asking enough. Or if they are, they not hearing the right answer. So say Les Binet and Peter Field, amongst others.
Once again, Binet and Field have set about analysing case studies from the IPA Databank, in order to give marketers the ammunition they need to answer these questions more confidently and accurately. The inarguable premise is that advertising should drive business effects, for example increased profitability, increased market share and so on.
Their new publication, “Media in Focus – Marketing Effectiveness in the Digital Era” was published on the 15th June 2017. A lucky few of us had a sneak preview with Binet at the IPA. Here are a few nuggets to whet your appetite.
Build your brand
First things first. Marketers are spending too much time and resource on short termism. Previous research has identified that the ideal balance of marketing investment is 60:40, in favour of brand building over activation. The new publication demonstrates that this rule still holds, even in these digitally-dominated days. We look forward to learning if and how this varies by category, something Binet tells us is coming next.
Target new customers
As feels intuitive, the authors remind us to target new customers, as well as current ones. If we only target existing customers, we only drive short-term growth. New customers bring long-term growth; effects on penetration tend to be larger than loyalty effects, and are usually accompanied by them anyway.
Use paid media
Of course, we would say that! But we have evidence to prove it. Growth of share of market from paid media was 2.6% on average, compared to only 0.9% from unpaid. The relationship between share of voice (through paid media) and business growth has actually increased over time too.
Earned media is twice as likely to have very large business effects (VLBE) as owned media (26% of case studies demonstrating these effects, compared to 13%), but paid and owned are needed to generate earned, and therefore to generate these effects.
Video – whether it’s TV or online – is best for brand building. Both in terms of generating the largest number of VLBE, and in growth of share of market. Case studies using online video were responsible for three times the number of VLBE as case studies using other online formats. Paid video is more effective than free.
Don’t rely on ROI
Return on (marketing) investment measures efficiency, not effectiveness. It measures the gradient of the curve of our sales: investment chart. The area beneath the curve is our profit.
If we solely focus on ROI, we only go after the easy opportunities, missing those that may be costlier, but that are still profitable. Don’t rely on ROI to drive profitability. It correlates more strongly with activation campaigns and short-term growth.
For more information, you’ll have to fork out for the full publication. Consider it an investment in your long-term business growth. Check it out here - http://www.ipa.co.uk/media-in-focus-book