Comprehensive econometrics-based review of effectiveness in advertising, where they recommend a 60/40% balance between long and short-term marketing. Mostly focused on B2C advertising.
Some definitions to begin with:
“A succession of short-term response campaigns will not achieve the same level of business success over the long term as a campaign designed with year-on-year improvement in mind. Whilst this issue has always been important, it has become considerably more so in recent years as the growth of new online channels have focused attention on short-term results and metrics.” (Page 18)
Key findings in this part of the report:
Short vs long campaign strategies will vary wildly in their effects.
Should we try to improve loyalty? Generally, no, because they underperform penetration campaigns on profit growth over all timescales:
“Experienced buyers of a brand are by definition very familiar with it and use it to the extent that they wish and find convenient (there are sound practical reasons why consumers have and want repertoires) - it is difficult for marketing to have much impact on this, except in the very short term by incentivising brought-forward purchases.” (Page 24)
Campaigns that have very broad effects are much more efficient than those that don’t. The broader the reach the broader the total number of effects. So, again, go for reach:
“The benefits of broad reach considerably outweigh the benefits of tight targeting: a finding that directly contradicts much of the current orthodoxy emanating from the online marketing world. Undoubtedly, this finding can be partly explained by the 'herd effects' resulting from broad-reach communications that not only impact target consumers but also those all around them: the perceived familiarity and popularity of the brand amongst the many enhances its appeal to the one.” (Page 26)
Rather than the traditional AIDA version, Binet and Field outline their own purchase funnel which, from top to bottom, looks something like this:
“All long-term brand-building campaigns should include an element designed to convert the improving demand for the brand into immediate sales. However, this does not mean that short-term effects should be the primary aim.” (Page 28)
Key points:
So, do both: “brand response”—a brand idea chosen for its adaptability in both long- and short-term marketing.
Definitions:
“The most important driver of long-term growth remains the level of share of voice i.e. the brand's share of total communications expenditure by the category. The IPA data echoes the findings of a number of empirical studies that there is a relationship between stable market share and share of voice (SOV)” (Page 34)
The relationship between SOM and ESOV can be expressed by this equation: ∇(SOM) = α x ESOV (where α = 0.05)
A typical brand needs to sustain an ESOV of 20 points to drive share growth of 1% per annum.
“This illustrates how slowly market share responds to communications investment in most cases - and why long-term effects are so important to measure. In practice, the main effect of most campaign investment is to maintain market share rather than increase it, as Ehrenberg and others have observed. Most brands looking for ambitious market share growth will hope to do better than this average figure, by making their budget work harder.” (Page 35)
The authors recommend splitting spend 60/40% between brand channels vs sales activation channels. Choice of channels should meet the following criteria:
TV tends to perform well on both of these. (Today, especially brands for whom linear TV isn’t affordable or appropriate, YouTube and CTV may be most relevant.)
“If brand-building activity should generally dominate, the first priority is to choose channels with greater power to generate long-term brand effects. There are two requirements of channels that are likely to dictate their brand-building ability. The first of these is their reach ... The second of these [is] emotional involvement. Emotionally-involving communications tend to produce bigger effects ... a proxy measure of their involvement [is] the average hours consumers spend with them.” (Page 41)
“Neuroscientists have shown that emotions are the primary drivers of behaviour. And so a new model has emerged, in which most decisions are taken automatically, with little or no conscious thought, mediated by pre-programmed heuristics (i.e. mental 'short-cuts').” (Page 50)
Emotion comes first, then cognition rubber stamps it. This is why people tend to move towards and choose the brand they know about and like. This is why “emotional priming” makes people tend to believe the rational messaging they later interact with.
This is what can make market research very misleading:
“Asked why they chose brand A, consumers will be unable to play back the emotional priming that has influenced them over the long term; instead, they will play back the rational activation messages that are more easily accessible to their conscious thought, as well as associated "illusions of truth" (in the words of Kahneman) that feel appropriate to the brand. Market research therefore has a dangerous tendency to underplay the importance of long-term emotional priming and to exaggerate the importance of short-term 'news'” (Page 51)
Key findings here about emotional campaigns:
An important note: long-term emotional campaigns outperform short-term rational when measured on time frames greater than 6 months. Ideally, they should be measured for a year or more.
“Rational messaging tends only to strongly influence people who are close to the moment of purchase - as in direct response campaigns.” (Page 56)
Fame campaigns (e.g. Old Spice or Dollar Shave Club) can be incredibly effective but will eventually plateau after 2-3 years. Fame also needs a constant stream of innovation to sustain.
However, fame quadruples efficiency, creativity drives fame, and creativity is associated with primarily emotional campaigns.
“Because fame is driven by surprise there is a strong link with creativity.” (Page 63)
The handover in effectiveness between short-term and long-term efforts is somewhere between 3-12 months. The authors suggest a balanced scorecard that measures both in their own respective ways (although these are more B2C focused):
Brand-tracking can help campaigns perform better in the long term. That is, if you do it, they tend to perform better. However, pre-testing of adverts is not all that helpful at all.
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