Binet & Field’s latest masterpiece suggests we’re at a tipping point
The Blogfather came face-to-face with the ‘Godfathers of Effectiveness’ recently (kind of), and gorged himself on the rich pickings of Binet and Field’s latest work, before spewing it forth to you. You’re welcome.
These legends of marketing are the authors of one of the most important and referenced pieces ever written on marketing
A couple of weeks ago, Gasp founder Giles Edwards beckoned me into the boardroom to show me something on the big screen for an hour.
Initially I was somewhat sceptical, probably still scarred from the experience of being dragged to see Crazy Rich Asians the weekend before, but what Giles had invited me to see was something truly captivating and much anticipated; Binet & Field’s webinar on Effectiveness in Marketing.
The webinar was part of the launch of their latest publication; Media in Focus - Marketing Effectiveness in the Digital Era, which updates and builds on their previous body of work.
These legends of marketing are the authors of one of the most important and referenced pieces ever written on marketing; ‘The Long and Short of It’, and all their work is built on the IPA Databank – year-upon-year of data submitted alongside entries to the IPA effectiveness awards competition. Thousands of studies of great work, the majority supported by full econometric models.
The webinar itself merely scraped the surface, a small hors d’oeuvre of the fuller offering, but it was still packed with great stuff. Only a fool would try and convey the entire report into a single blog, but such is the richness and importance of the piece that no doubt we’ll delve into this timely tome at various points for blog fodder.
But for now, back to the webinar. Anyone familiar with Binet and Field will also be aware of the 60/40 rule; that a 60/40 split of media budget in the favour of long-term brand building over short-term activation is a good rule of thumb. Some have suggested that, especially with the growth in online communication, these rules for effectiveness may be out of date.
Online selling makes activation easier, so brands need to focus more on brand.
If this new report is anything to go by, they could not be more wrong.
Brand building still gives long-term, steady growth. It won’t even start to kick in until after at least 6 months, something those caught up in short-terminism won’t be able to get their heads around.
Brand and activation work in synergy, but on different time scales. You have to do both, but brand is the primary driver. Sales activation will give you short-term success and ROI (that most people get giddy over), but this tends to decay away quickly and does not contribute much to long term sales growth.
It is clear that the 60:40 rule is still just as important as ever. Binet and Field looked at the brand/activation budget split for the most efficient and effective campaigns of 2016. Campaigns with strong market share growth, high share of voice efficiency, large profit growth, and good brand awareness, all had budget splits of roughly 60/40.
Yet this new report updates the 60/40 rule further, with the insight that we should flex the rules according to context.
The digital revolution has affected purchasing, there is no doubt. Marketers and companies see how easy it is to get activation, and thus pile more cash into it. They insist on picking the fruit, yet nobody is watering the tree.
They’ve got it completely the wrong way around.
Online selling makes activation easier, so brands need to focus more on brand. Create a brand people want to buy from, then the rest flows from there.
Remember; invest more in brand building when activation is easy.
An example would be subscription/membership brands online, such as Harry’s shaving company. Subscription makes activation even easier, so a good split for them according to Binet and Field would be 74/26 branding to activation. Harry’s went heavy on some nice TV ads recently, so they appear to be on the right path.
Binet & Field took us through a great case study on the webinar, for the AA (Automobile Association). Not so long ago, they were recognised as the UK’s most trusted brand. Then they decided to change their media spend, putting everything into digital activation, and purely targeting their membership base. They would offer discounts to entice, then hike up prices on renewal.
This gave them short term profit (great), but it put their brand metrics into free fall. Irate customers and an increase in churn followed, as their customer base contracted and market share declined. Things were so bad, that the complete collapse of the company was predicted by their internal team within 5 years, if they kept on the same trajectory.
So how did they turn it around? In a nutshell, they gave that tree some much needed water; did some great TV ads, and changed their media budget so two thirds of it was on brand building. Their decline in market share was reversed immediately.
You probably remember it?
“It’s apparent that most companies are too short term in their approach and that the balance Field and Binet prescribe is exactly what is missing.” Mark Ritson
So brand building is clearly still vitally important. In fact, it is becoming more important, not less. The IPA data suggests that actual effectiveness has declined in the last 10 years. Despite what the digital duopoly would have us believe.
So we could be approaching something akin to a watershed moment. If you are going to get the brand/activation balance wrong, err on the side of branding, as good long-term results can come from this. If you go too heavy on activation, then the effectiveness of your advertising spend can drop by as much as 56%. Most companies are too short-term in their approach.
In fact, a previous IPA report, authored by Peter Field, went as far to say that short-termism is ‘killing’ creativity in marketing. To quote the man himself:
“There is an obsession with short-termism and it is now endemic among marketers.
“Getting people to talk about brands takes time to build and exploit, it doesn’t work in a hurry. If you underfund creative campaigns and also rush them, then they ultimately don’t deliver.”
The new report contains a case study of John Lewis. You only have to stop a moment to consider how their brand image has grown across the last 10 years due to the investment in their Christmas advert campaigns to realise the strength of the point. John Lewis has grown their market share by 30% at a time when the likes of House of Fraser and Debenhams are barely staying in business.
Mark Ritson is a vocal advocate of Binet and Field. One of his most recent blogs states;
“It’s apparent that most companies are too short term in their approach and that the balance Field and Binet prescribe is exactly what is missing.”
The trend currently is for investment to move away from branding, with some sectors and contexts already strongly out of balance. As Binet and Field concluded on their webinar, we urgently need to restore the balance.
I’ll sign off with a quote from one of my favourite movies, Field of Dreams:
“Build it, and they will come.”