Why Your Marketing Is Leaving Money On The Table

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With marketing budgets being increasingly squeezed and more demand than ever to show return on investment, Paul Sinkinson (pictured below) asks why businesses aren’t doing more to optimise their media budgets…  

There isn’t a brand in Australia that is over-invested in marketing. But neither is there one doing a perfect job of maximising the return on its marketing investment by using the right channel mix.

The industry has seen a massive shift in the last decade, with more media channels to push messages across, but no associated spikes in marketing budgets to use them.

PS

Our analysis for clients, which has covered hundreds of billions of dollars of marketing spend over 19 years, shows the returns for almost any media type. Whilst there’s obviously a lot of variation between different brands and sectors, it’s fair to say that in Australia the typical campaign still has some way to go to become “optimal”.

One of the main problems we see is that currently, marketing departments and agencies aren’t set up for success. Channels are still being planned in silos, and few brands are rolling out coherent campaigns across enough channels. There are also issues with the way creative is used.

 

Assuming this can be overcome, the fair question to ask is what then, is the optimal media mix to help me get the most from my brand marketing dollars? The answer to that is, frustratingly, “it depends”. How big is the budget? What’s the target audience? Is it a launch or a maintenance campaign? Different types of advertising obviously have different types of benefits – it’s not just a matter of how much and where to spend.

Whilst there is no one-size fits all approach we can extrapolate what an “average” campaign looks like and the lessons we can take from it in terms of the effects of different media mixes. So whilst it might not be exactly representative of your business, you can use this thinking to start to understand how you may want to approach it in the future.

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Put simply, the average campaign will perform better with more media channels in its mix; that is, the more media channels you have as part of a campaign, the better your return on investment.

But we can go one step further, as there is an order effect. Our data shows that the best campaigns start with moving pictures. Video (be that TV, Cinema, or online video) creates the greatest emotional engagement, and done right offers the greatest long-term return on investment – the return in year two and year three.

The best starting point for an “average” brand is still TV, specifically prime time, to create the mass reach you need to create momentum for brands.  But you need to be careful not to over-invest and manage your buy for maximum impact.

A burst of 30-second TV commercials at the start of the campaign creates the right neural pathways and memory structures to support your brand. After two weeks it is usually optimal to switch to 15 second ads (unless, for example, it’s a launch).

Of course, we know TV has a price barrier to entry which is prohibitive to some smaller budget campaigns. In these instances, you should look to replicate the mass-reach element of the campaign by leading with out of home.

Once TV or out of home have been laid down, our data shows that digital video including social drives the highest return on investment when done correctly.  If you’re not supporting your offline marketing with quality digital executions then you are missing out on the biggest multiplier you can have.

So, the next stop for optimising ROI for your campaign should be digital video including social. Our data shows this serves as a very efficient method to remind people of the brand and build on the emotional resonance of the initial TVCs. This provides a synergy that increases campaign ROI by 20%, purely from the combination of the two mediums.

Our analysis shows 6-second video ad executions provide the most efficient ROI. However, in general this does not work as well unless there is the emotional connection of the longer-form TV ad to work off.

Importantly, these shorter-form videos should not be cut-down versions of the TVC, but made with the platform on which it will run in mind, laddering into the concept and reminding people of the original. Social and video platforms are a perfect place to deliver these messages efficiently.

From here, where budgets permit, we layer on the other media, a mix of auditory advertising and out-of-home (if you’re not using it as your foundation media). If you can have a strong outdoor retail execution outside the supermarket which supports your overall brand message, you are sending shoppers in store with more of a connection to buy your brand.

It does this by unlocking the subconsciously stored brand message and recall and bringing it front of mind, raising it above the competition of all those price promotions at the shelf. This provides a lift of up to 15% onto your campaign ROI.

In many ways this isn’t new thinking. These lessons are backed up by the recent work of advertising industry luminaries Les Binet and Peter Field in their recent and already seminal paper The Long and Short of It, whilst Professor Mark Ritson also uses our data in his presentations. We also feel our work is validated with Forrester naming us the only leader in the field of mixed media measurement across Asia Pacific.

With the plethora of hype around the effectiveness of specific channels (rather than the mix of them), it’s not surprising that there’s confusion. But if you’re not considering these basic rules when planning your next campaign, you’re leaving money on the table.

 

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Analytic Partners Paul Sinkinson

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