“Our efficiency is unparalleled, our ROI is fantastic, and we’ll be out of business in five years.”
That – according to ad effectiveness guru Les Binet – was the paradoxical position facing the AA, Britain’s market-leading motorist organisation, at the end of 2016.
What had gone wrong? The organisation had cut brand marketing spend close to zero, in order to focus on “hard working” activation. This “working” spend had instead sent the AA into an efficiency death spiral – highly targeted discounts to win new customers increasing churn and driving motorists to price comparison sites. The whole category was becoming commoditised. Short-term thinking was about to kill a brand.
This AA case study was the centrepiece of Binet and co-presenter Peter Field’s latest IPA effectiveness presentation. Binet and Field are Effectiveness Week’s headline double act; their findings are received by effectiveness acolytes like stone tablets.
But, as they were keen to point out, the religion they’re preaching isn’t brand-building above all. They want to see marketers balance the scales between brand-building and activation, driving profitable growth by investing in both. We can brand our cake and sell it.
It’s just a matter of proportion, and this iteration of Binet and Field’s findings looked at getting the recipe right across a variety of contexts: different sectors, but also different consumer relationships with brands. We learned what the right brand-building and activation spend levels were not just for FMCG and financial services, but for categories people research strongly online and for categories with high emotional resonance.
Behind all the detail – available in the pair’s new report, Effectiveness In Context – was one guiding principle. The marketer’s job is to provide balance by spending money on the hard stuff.
Are you in a category where activation is relatively easy – where purchases are heavily researched, for instance? What you need is to shift money to build up your brand. Conversely, in a category with a strong heritage of emotional brand-building, like retail, you might get more bang for your buck with activation. (Though while the optimal brand investment soared as high as 80%, we never saw recommended activation spend top 56%).
This may seem counter-intuitive, especially as marketers’ instincts are to take the path of least resistance and keep doing what seems to be working. But it’s backed up by the weight of the IPA’s effectiveness dataMINE.
The reverence marketers have for Binet and Field’s work seems to grow every year. Unfortunately, that doesn’t translate to brands actually doing anything different. The “short-term wave” has affected different sectors in different proportions – financial services being particularly keen to junk brand building, and hence in most need of it. But as the two pointed out, it’s still on the rise overall. As Field drily announced, “A lot of brands are in the sh*t.”
For all the talk of balance, it’s obvious what Binet and Field believe is lacking in today’s marketing. “Brand-building is more effective and important than ever”, said Field. “Don’t let anyone tell you it’s getting less important.” The downside risk of shifting your spend entirely to brand is a 20% loss in effectiveness. Going in the opposite direction – shifting all your spend to sales – costs over 50% of your effectiveness and is much harder to reverse.
Which brings us back to the AA and their risk of being efficiencied to death.
The remedy, said Binet, was a strong, broad-reach, brand-building campaign, the “Singing Baby” ad from Adam&EveDDB which – as it happens – scored 5-Stars in this year’s FeelMore50. A great, loveable emotional ad, it electrified the AA’s moribund brand, reversing 5 years of market share decline in a single year and showing a big uptick in brand searches for the AA. Balance is vital, but when you look after your brand, the activations often look after themselves.
“We often overcomplicate our industry”, mused Binet. “It’s not that complicated. You need a singing baby, a song, and a bunch of money to spend on it.”
The IPA Effectiveness judges agreed: at last night’s awards, the singing baby took home Gold.