Advertising effectiveness: the long and short of it

‘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&eveDDB, 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 three 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 with existing customers is less effective than investing in advertising that reaches as wide an audience as possible. Ad campaigns which target new customers report 60% more large sales effects in the first six months alone.
  • Because of its relationship with reach, share of voice and excess SOV, remains.

 

Balance activation and long-term brand building for greater profit

  • Advertisers need to ensure their campaigns strike the right balance between long-term investment in brand building using mass media,and short-term, direct methods that stimulate sales – which can include TV, of course, as TV works in both the short- and long-term. Campaigns that use both in harmony are more effective, more efficient and more profitable.
  • Long-term (3+ years) brand-building investment in advertising delivers double the profit of a short-term approach (less than 1 year), but investing in both delivers even higher returns.
  • The largest part of an advertising budget should be invested in media with a mass reach and long-term effects, such as TV. At least 60% should be invested in these brand building media with the remainder spent on shorter-term activation channels to provide a response mechanism to capitalise on the effectsof the brand-building activity. These figures change by market category.
  • The report warned that although price promotions can maximise customer response rates and stimulate short-term sales, they can also increase price sensitivity and 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 campaigns included in the study achieved substantial long-term profit growth without investing in TV advertising.
  • TV advertising remains the most effective way to build a brand and creates larger business effects than other forms of advertising.
  • TV advertising is becoming more effective due to growing synergies with online and increased viewing reducing the cost of reaching mass audiences with TV.
  • Including TV advertising in a campaign increases the campaign’s efficiency six-fold.

Creative advertising and scale are crucial

  • Stirring the audience’s emotions with advertising is more effective than using rational messages over all but the shortest of terms. Emotional advertising is twice as efficient as rational, and delivers twice the profit.
  • Highly creative advertising is the most effective of all, but even the best creative work will fail if it does not have sufficient scale.

Buy the IPA publication of The Long and Short here

Advertising effectiveness: the long and short of it

Every year there is a mountain of media and marketing research; too much to read it all and, sadly, too much which doesn’t bear scrutiny. But if there was ever a piece of research the industry could trust and that demanded attention, it was published in 2012 by the IPA.
  • At this event at the Soho Hotel explored the emerging platforms for distribution of TV content and how they are affecting the nature of TV viewing and advertising. Here you can view and download the slides of Thinkbox’s exclusive new research from Decipher where families were “tellyported” into the future of TV with the latest TV technologies.
  • This publication from the IPA is the eagerly anticipated update of Marketing in the Era of Accountability: it explores the tension between long and short-term strategies for brands and businesses as well as providing evidence-based recommendations on how best to approach investment in advertising. Les Binet and Peter Field explore the vital new area of how campaign results develop over time, focusing on a growing tension that exists between short-term response activity and long-term brand-building. Increasingly, there is a tendency to use very short-term online metrics as primary performance measures and this has dangerous implications for long-term success. Anyone involved in the complex world of multi-channel campaign development and evaluation needs to have a clear understanding of how short-term and long-term effects are different. If you buy one book on advertising effectiveness this year, this is the one to get: great stuff.
  • TV Together: a very social included two pieces of research. First, we put shared viewing under the microscope to better understand why, how and what we watch together, the impact of technology on the shared experience and how all of this affects the way TV advertising works in our brain. Secondly, we explored the complementary relationship between TV and social media and providing some new insights into how advertisers can harness the ripples from their TV activity in this new space.