the power of advertising - sanoma media finland · 2019-09-06 · ebiquity global cpg client where...

The power of advertising:Understanding the long term impact of advertising investments

The power of advertising2

We are Ebiquity

Advisors to 70 of the top 100 advertisers worldwide

Measure and analyze >$40bn of marketing spend

Global independentmarketing and media consultants


1. The pressure towards short termism2. Misleading metrics lead down the wrong path3. Defining the correct measurement framework 4. Understanding the impact of media channel and creative5. Applying these principles at Direct Line Group

Today’s topics…



Today’s topics…


Lack of impartial

advise from many media

agencies

Brand building giving way to short-

termism

Companies are investing in data-driven, measurable

channels

Increased corporate pressures

Changing consumer dynamics

1. The Industry pressure to think and plan more short term

Mainstream advertising is at a crossroads


We know that the majority of advertising’s potential to drive sales is in the long term

Source: IPA The long and short of it

18%

42%100%

HOURS/ DAYS (via Digital Attribution)

WEEKS/ MONTHS(via Marketing Mix Modelling)

MONTHS/ YEARS(via Brand Equity Modelling)

SHARE OF SALES IMPACT CAPTURED BY TIMEFRAME:


“The more we move towards real-time, the more we move towards deal-time and this is harming brands’ profitability”

PETER FIELD, ADVERTISING EFFECTIVENESS EXPERT


1,2

1,3

1,4

1,5

1,6

1,7

1,8

1,9

2,0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Key

Busin

ess E

ffect

s

And as a result, marketing effectiveness has fallen

Source: Marketing Effectiveness in the Digital Era, Binet & Field (2017)

Key business effects tied to marketing spend



Today’s topics…


“Brands should spend 24% of TV budgets on our

platform”

“We have a SuperBowl every day

on Mobile”

“Our video ads generate better ROI

than TV”

Blanket claims can lead us down the wrong path…


ROI should capture the cost of reach and the scale of reach

12

ROI = ( Incremental Sales x Margin ) / Cost

….fundamentally a function of:cost per point of reach x effectiveness per reach point


On average, TV delivers both reach & volume at scale

UK DATA


And highly effective reach…

Enhanced ability to

target

Emotional Ties

100% screen coverage

100% human activity

Extremely low CPM

100% View-ability

Highest verified reach

Brand Safe


Consumers see things differently from Adland

Source: Adnation 2017: the story so far…, ThinkTV

Where do you see advertising you like?

Peop

le’s

Answ

ers

Marketers’ Answ

ers


Despite increased data and press coverage of ad avoidance Adland often neglects it in its thinking….


…and typically chooses to overlook the measured evidence, in favour of more modern on-trend channels


The current measurement of channel ROIs globally, and in the US, demonstrate that online and search do not typically deliver the best results

Source: Neustar 2017

TV

Onl

ine Paid

Sea

rch

Prin

t

Radi

o

0

0,5

1

1,5

2

2,5

3

3,5

4

Auto Financial services CPG Retail Telecom

US ROIS


Ebiquity Global CPG client where TV is the foundation of the media plan

Source: Ebiquity: 2018, 14 country study

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000

Mar

gina

l RO

I

General Rule: TV 80%+ of budget

TV

VOD



Today’s topics…


The problem with digital attribution…


Digital media

Broadcast media

Econometric Modelling Macro Digital

Attribution Micro

Internetsale

PaidsearchSocialDisplay

Credit allocation

Digital customer journey

Combining techniques helps avoid the pitfalls of digital attribution

Base

Base Decomposition

Brand Health

Brand Equity Modelling


Digital media

Broadcast media

Econometric Modelling

Digital Attribution

Internetsale

PaidsearchSocialDisplay

Credit allocation

Digital customer journey

Different industry techniques measure different timeframes…

Base

Base Decomposition

Brand Equity Modelling

Short-to-medium term (6 months)

Short-term (hours/days)

Long-term (years)


Broadcast communications typically have a direct impact on sales and an indirect impact through search

BaseSales Media 1,2,3,4…

Generic Search

We can identify the indirect effect of media in making search more efficient,

this can be a greater effect in price driven PPC categories

= f + + + …..

BaseGeneric Search

Media 1,2,3,4…= f + + …..


TV DM Press PPC Social Display

Digital Only Total View

A combined and correctly measured ‘Total View’, the world typically looks very different to what you see through digital-only attribution

CPA by Channel



Today’s topics…


Advertising ‘Adstock’ or ‘Memory Effect’ continues to have an impact on sales beyond the end of a campaign

100

8572

6152

4438

32

0

20

40

60

80

100

120

1 2 3 4 5 6 7 8

TVC

GRPs

Weeks

Memory Effect

85% of the advertising power from week 1 is retained in the subsequent week


A higher memory effect has a marked impact on incremental volumeand ROI

0

50

100

150

200

250

300

350

400

450

500

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55

TVC/

GRP

s

Weeks

TVC GRPs 90% Memory80% Memory 70%Memory60% Memory 50% Memory

1,0

0,5

0,30,3

0,20,1

90% Memory80% Memory70% Memory60% Memory50% Memory0% Memory

Volu

me

Inde

x

A 50% memory effect will generate only 20% the volume a

90% one

Memory Effect & Volume Memory Effect & Volume


Campaigns with strong distinctive assets have longer memory effects

Weaker brand asset Distinctive brand asset

(Low memory effect) (High memory effect)


Wk 1Wk 2

Wk 3Wk 4

Wk 5Wk 6

Wk 7Wk 8

Wk 9Wk 10

Average weekly Memory Effect Average Memory Effect

TV 70%

OOH 40%

Print 35%

Online Display 20%

Radio 20%

Search 20%

Online Video 20%

Adve

rtisi

ng a

ctiv

ity

TV lasts longer on average and good content lasts much longer


Which digital metrics you look at influences views of effectiveness

Source: MOAT Analytics, Ebiquity FMCG Client

2 072K1 795K

933K617K

237K

5 259K

133K 105K 57K 35K

807K508K

25K 21K 17K

Impressions Valid & Viewable Audible & Reached 1/4 Audible & Reached Half Way Audible And Completed

Default Reporting Metrics What drives brands

Publ

isher

1

Publ

isher

2

3

Client Example


By focusing only on short-term you undervalue the true role that advertising plays; different channels have different long-term multipliers

0,00,51,01,52,02,53,03,54,04,5

TV Print OOH Online Video Radio Online Display

ROI

Short term vs Long Term ROI

Short Term Long Term



Today’s topics…


Do your CEO and CFO understand the value of a shift in your brand tracking metrics?


Brand Advertising

Brand Advertising

DirectComms

Brand Advertising

Consideration

Brand Image

Brand Personality

Word of Mouth

AdvocacyNPS

Quality

Typical econometrics measurement Typical brand tracking measurement

Short Term Sales or Loyalty

Brand Advertising


Long term consideration

and sales

Short term sales

Changes in consumer perceptions

Increasingly we are looking beyond short-term sales

Advertising investment


Base

Long term media

The brand metrics which really matterBase

Short term mediaPrice

Promotions

Our Brand Equity Modelling involves two phases to explain how shifts in key brand metricsimpact long-term sales

Short-term model Long-term model

Base

Dynamic model


Long term equity model links your campaigns to the long term growth of your business

65%

42%

18%

5%

35% 35%

Econometrics Brand Equity

Base Consumer Metrics

Long Term Media Short Term Media

Propositions

Product Discount

Range Discount

Brand Led

Brand Led - Reboot

Propositions -Reboot

Short Term Long Term

Resolves Claims Fairly

Cares for Customers

Easy to Deal With

Offers right cover

Integrity

Trustworthy

Awareness

Postive Buzz

NPS

Consideration

KPIs Do the Right Thing Honest Customer centric

Decompose(baseline)

Long Term(efficiency by message)

Rank(most valuable metrics)

Sales Return per Brand PointVolume Return per £m

Client Example

Illustrative


Campaign Brand Advertising Direct Comms Product 1 Advertising Product 2 Advertising SponsorshipInvestment £8.0M £0.3 M £5.4 M £3.7 M £2.0 M

Likeability 4.10% 0.02% 0.20% 4.20% 5.10%Satisfaction 0.30% 2.10% 0.90% 0.50% 1.80%Consideration 2.50% 0.01% 2.40% 4.50% 5.20%Advocacy 0.80% 0.70% 1.40% 1.50% 4.00%

Volume Sales 5,500 500 4,000 2,700 3,000Volume/£1M Spend 688 1,667 741 730 1,500Short Term ROI £0.69 £1.67 £0.74 £0.73 £0.00Long Term ROI £1.24 £0.33 £0.89 £1.02 £2.25Total ROI £1.93 £2.00 £1.63 £1.75 £2.25

KPIs

Sales or LoyaltyImpact

Campaign Investment Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecBrand Advertising £8.0M

Direct Comms £0.3 M

Product 1 Advertising £5.4 M

Product 2 Advertising £3.7 M

Sponsorship £2.0 M

The approach enables a strategic balance of investments for both short term sales goals and long term brand objectives

41

Understand what your Annual Media Plan is going to deliver

Then adapt the investments in each communication to drive both your

short term and long term objectives

Brand Equity KPIs

Long Term Sales or Loyalty

Client Example

Illustrative


2018 IPA Channon Awardfor best new learning in advertising research


…it is also the subject of independent critical review

Mark Ritson, Marketing Professor


Key Take Outs

- Adjust your measurement framework to base your planning on facts- Classic Byron Sharp ‘Distinctive brand assets’ thinking is borne out in Econometrics

- Understand your assets well!

- Digital attribution alone will create a huge and misleading bias towards short term comms and digital

- Link your campaigns through to shifts in consumer perceptions and other key brand metrics, and then to long term sales

About Ebiquity

We are a leading independent marketing and media consultancy

Our focus is on helping brands make better informed marketing investment decisions

Thank you for your time.

the power of advertising - sanoma media finland · 2019-09-06 · ebiquity global cpg client where...

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