Media in focus

The advertising world is changing – and the direction of travel is towards audio-visual.  And
landmark new research by the IPA revealed that TV advertising works best of all, especially
when used in combination with online video.

In the world of marketing effectiveness research, two people stand above all others: Les Binet
and Peter Field. In 2007, they published their first seminal meta-analysis of the IPA’s
Databank, ‘Marketing in the Era of Accountability’, to identify which media strategies
performed the most effectively at driving business effects such as profit growth and market
share increases. The Databank contains every IPA Effectiveness Awards paper submitted
since 1980 and as such, this was the largest and most thorough effectiveness study of its kind.

Fast forward nearly a decade, and Binet and Field have revealed their latest analysis of the
IPA Databank, ‘Effectiveness in the Digital Era: Media in Focus’, which is designed to
identify marketing best-practice at a time when usage of online channels is widespread. As
stage one of four separate analyses, this work sheds plenty of new light on the effectiveness
of advertising and the role of different forms of video within it.
The first part of the report, Media in Focus, deals changing media landscape as its focus and
addresses, among others, the issues of: Does mass marketing still work? Is tight targeting
now the most efficient approach? Is unpaid making paid media redundant? It also investigates
the broader issues of budgeting, planning and reporting, and challenges the industry to
reconsider approaches to efficiency, ROMI and measurement strategy.

Marketing works in two ways: sale activation and brand building; with both creating an uplift
of sales versus the base, but doing so in very different ways.Sales activation is very much
about short-term gains with tightly targeted campaigns prompting consumers to do something
at a certain point in time – and to do it quickly.  They provide short and significant spikes in
sales, but typically the effects tend to fade quickly and brands end up back where they started.

Brand building, on the other hand, is a much slower burn.  These messages tend to be more
broadly targeted and designed to drive a deeper, more emotional connection with a brand. 
For this reason, they are usually more memorable.  Whilst the short-term effects of brand-
building campaigns are more modest, the power is in the longer-term impact, where growth is
driven steadily year on year. the issue that Binet and Field have identified is the real shift
towards short-termism within marketing, to the detriment of brands.  Back in 2011, a 60:40
ratio of brand building to activation was deemed optimum for business growth and success. 

Move forward half a decade and the analysis worryingly revealed that around half of the case
studies evaluated were based around short-term activation.  By default, the short-term case
studies tend to be less focused on profit and more centred on ROI. 

This is important.  Short-term campaigns can generate impressive sales spikes at relatively
low levels of spend as they tend to focus on the online (non-video) channels which capture
people when they are already in, or about to enter, the market.  So they generate positive
ROIs but to the detriment of long-term profit growth – which is exactly what marketing
should be seeking to drive and exactly what brand building campaigns are designed to do. 
Worryingly, in a time where we should be reaping the rewards of our marketing knowledge
and the expanded repertoire of channels at our disposal, Binet and Field have found that
effectiveness is actually falling – and falling sharply.  We’re focusing on short-term metrics
and simply aren’t spending enough, in the right places, to really drive growth.

In a world of increasing personalisation, Binet and Field found that penetration is still three
times more likely to be the main driver of growth and profit compared with loyalty.  Scale of
a medium is the primary driver of effectiveness. Whilst tight targeting and loyalty are great
for short-term efficiency, they are not strategies that build market share. In addition, ‘earned’
media cannot act as a substitute for investing in large-scale media channels.  ‘Earned’ is
simply a by-product of that investment.  In fact, the further you spread your message and the
more non-customers you reach, the bigger the brand effects. 

In particular, the findings reveal the impact of television. Investing in TV increases

effectiveness by 40% - making it the most effective media channel. It is also the best for
generating the top-line growth that is a key driver of profit, with a 2.6% average market share
point gained per year when using television advertising.
 One of the benefits of TV is that a huge numbers of people spend a lot of time watching it. 
Given that the primary driver of effectiveness is scale, TV outperforms at delivering increases
in very large business effects, such as profit and market share.  In addition, TV was found to
be increasing in effectiveness over time.  Between 1980 and 1996, adding TV to a campaign
increased the very large business effects achieved by 12% on average. This increased to 40%
during 2008-2016, which makes TV one of the biggest drivers of effectiveness overall.

One of the reasons TV is becoming more effective is that it’s increasingly supported by on-
demand formats, namely Broadcaster VoD and online video.  BVoD can increase the
effectiveness of TV by a third whilst other online video boosts its performance by c. 25%. 
But the power lies in combining both on-demand formats, with a 54% uplift in very large
business effects when both BVoD and online video are used in conjunction with TV.  This
combination allows people to immerse themselves in the TV content.  Moreover, emotional
advertising, which Binet and Field found to be the most effective approach, is uniquely suited
to video.

Thus we need to ensure that this doesn’t come at the expense of brand-building.  Profitability
and growth ultimately depend on being seen; there’s only so much you can derive from
activation alone.  Worryingly, the data suggests we’re now well beyond the optimum
activation levels.  All of this signals good news for mass media channels, but particularly for
TV.  TV is the most effective media channel and can not only drive the emotional connection
needed to grow brands, but deliver it at volume.

Seema Khatri