‘Advertising effectiveness: the long and short of it’ was researched and written for the IPA – in association with Thinkbox – by Les Binet, Head of Effectiveness at adam & eve DDB, and Marketing Consultant Peter Field. It was an update on their influential earlier work, ‘Marketing in the era of accountability’, which was published in 2007.

The updated study examined the business effects of 1,000 advertising campaigns from over 30 years of IPA Effectiveness data and across 83 different categories. The findings provide evidence-based recommendations for businesses on how best to approach investment in advertising. The key findings and recommendations include:

Reaching a mass audience is most effective

• Tight audience targeting, whilst desirable for activation, does not help long-term success. Campaigns which reach a mass audience of existing and new customers are more efficient.
• Brands which target the whole market achieve 3 times as many large business effects as those that focus on existing customers (effects include increased profit, sales, or market share, and a reduction in price sensitivity).
• Attempting to build deep, loyal relationships withexisting customers is less effective than investingin advertising that reaches as wide an audienceas possible. Ad campaigns which target newcustomers report 60% more large sales effectsin the first six months alone.
  
• Because of its relationship with reach, share of voiceand excess SOV, remains.
  

Balance activation and long-termbrand building for greater profit

• Advertisers need to ensure theircampaigns strike the right balancebetween long-term investmentin brand building using mass media,and short-term, direct methods thatstimulate sales – which can includeTV, of course, as TV works in boththe short- and long-term. Campaignsthat use both in harmony aremore effective, more efficientand more profitable.
• Long-term (3+ years) brand-buildinginvestment in advertising deliversdouble the profit of a short-termapproach (less than 1 year), butinvesting in both delivers evenhigher returns.
  
• The largest part of an advertisingbudget should be invested in mediawith a mass reach and long-termeffects, such as TV. At least 60%should be invested in these brandbuildingmedia with the remainderspent on shorter-term activationchannels to provide a responsemechanism to capitalise on the effectsof the brand-building activity. Thesefigures change by market category.
  
• The report warned that althoughprice promotions can maximisecustomer response rates andstimulate short-term sales, theycan also increase price sensitivityand erode long-term profits.
  

None of the 1,000 ad campaigns included in the study achieved substantial long-term profit growth without investing in TV advertising.

TV advertising is crucial to long-term profit

• None of the 1,000 ad campaignsincluded in the study achievedsubstantial long-term profit growthwithout investing in TV advertising.
• TV advertising remains the mosteffective way to build a brand andcreates larger business effects thanother forms of advertising.
  
• TV advertising is becoming moreeffective due to growing synergieswith online and increased viewingreducing the cost of reaching massaudiences with TV.
  
• Including TV advertising ina campaign increases thecampaign’s efficiency six-fold.
  

Creative advertising and scale are crucial

• Stirring the audience’s emotionswith advertising is more effectivethan using rational messagesover all but the shortest of terms.Emotional advertising is twice asefficient as rational, and deliverstwice the profit.
• Highly creative advertising is themost effective of all, but even thebest creative work will fail if it doesnot have sufficient scale.