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Tuesday, 22 July 2014

IPA study highlights need for research in ad planning process

UK — Highly creative advertising will fail if it does not have sufficient scale and is not evaluated over the longer term, the IPA has warned in its effectiveness research study.

The advertising body ran a research study examining the business effects of 1,000 advertising campaigns to examine how advertising affected business performance in profit, sales and price sensitivity.

Conducted by Les Binet, head of effectiveness at adam&eve DDB, and Peter Field, an independent marketing consultant, the IPA reviewed over 700 brand campaigns from data supplied in entries to the IPA effectiveness awards. They concluded that planners should consider emotional trends when planning brand activity, because stirring the audience’s emotions with advertising is more effective than using rational messages over all because it is twice as efficient, and delivers twice the profit.

It added that reaching a mass audience had consistently proved to be the most effective format but warned that tight audience targeting “does not help long-term success”, because it misses the mix of both existing and new customers which had proven to be more efficient.

“Brands which target the whole market achieve three times as many large business effects (ie increased profit, sales, market share, reduction in price sensitivity) as those that focus on existing customers. Attempting to build deep, loyal relationships with existing customers is less effective than investing in advertising that reaches as wide an audience as possible. Ad campaigns which target new customers report 60% more large sales effects in the first six months alone,” the report claims.

The study also found that campaigns that had long-term investment - covering at least three years - could help to deliver double the profit of a short-term approach (less than a year) and encouraged brands to find a mix of the two when planning campaigns.

Binet and Field, co-authors of the study, said: “These findings contradict some fashionable thinking in modern advertising, where increasing emphasis is placed on nurturing a one-to-one connection with customers. The truth is that the vast majority of people have better things to do with their lives than to form deep and meaningful relationships with brands.

“Advertisers should not chase loyalty from customers but should speak to as broad an audience as possible and do so over the long term. Obsessing solely about short-term sales is self-defeating; brands must be in it for the long term as that is where the greater success lies. TV is particularly effective for long-term success.”

The IPA will release its report, ‘Advertising effectiveness: the long and short of it’, in association with Thinkbox early next year.


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