Why You’ve Got To Overcommit If You Want To Succeed
"Some people think football is a matter of life and death. I don't like that attitude.
I can assure them it is much more serious than that"
Bill Shankly
Money can buy you success
The IPA 2009 report How Share Of Voice Wins Market Share: New Findings From Nielsen And The IPA Databank contains two critical pieces of advice for those pursuing growth.
“The critical metric that determines the level of a brand’s market share growth is its excess share of voice (ESOV), defined as share of voice (SOV) minus share of market (SOM). “
In other words, if you want to grow your market share you need to over invest.
The second piece of advice it offers:
“The corollary of this is that no agency or marketing client can guarantee to continue to deliver the same level of business performance for a brand is ESOV is falling as a result of underinvestment in media and marketing communications.”
In other words if you are under-investing, you can expect your market share to decline.
The empirical evidence
The Nielsen analysis included two years’ of media and sales data over the period ending August 2008, for 123 brands in 30 FMCG categories,
Nielsen investigated the impact of brands’ share of voice in the first year on sales over the two-year period and used base sales to exclude the effects of distribution changes, price promotions, etc.
Key findings
The key findings from the Nielsen analysis were:
The relationship between ESOV and share growth was confirmed.
An average of 0.5% points of share growth can be expected per 10% points of ESOV. Thus, a brand with a market share of 20.5% and ESOV of 10% points would expect to grow over a year to 21%.
The levels of growth achieved per point of ESOV vary according to brand size
Creativity gets you what money can’t buy
So to some degree, market share can be bought.
However, the unfair advantage that any marketer can choose to leverage is the power of creativity.
In its report The Link Between Creativity And Effectiveness, the IPA has some fantastically valuable analysis of the relationship between creatively-awarded work and effectiveness.
The sample used for this study were the 257 IPA Effectiveness cases studies for which Gunn Report scores were all available.
(As an aside, given that 257 represents less than 1% of UK advertisers, and around 1 in 7000 pick up the minimum major creative awards needed to be recorded in the Gunn Report each year, the fact that no fewer than 46 (18%) of the sample of IPA campaigns appear in the Gunn Report database already suggests that there is some kind of relationship between creativity and effectiveness).
Obviously this isn’t proof and so this study examined whether this 18% of creatively-awarded campaigns outperformed the 82% of non-awarded campaigns in hard business terms.
The short answer, is yes.
The IPA’s analysis reveals that that non-awarded campaigns, on average generate 0.5 points of share growth per 10 points of ESOV. Which is obviously very much in line with the findings from Nielsen’s analysis.
In sharp contrast, creatively-awarded campaigns generate on average 5.7 points of share growth per 10 points of ESOV.
In other words creatively-awarded campaigns generate around 11 times (that’s right, 11 times) more share growth per 10 points of ESOV than creatively-non-awarded campaigns.
Creativity then, isn’t merely vanity. It isn’t some extra, frivolous bonus to salve agency egos. And the compulsion and desire to win creative awards isn’t some agency indulgence unconnected to the business of creating economic value for clients.
The urgency of creativity for smaller brands
Leveraging the power of creativity is even more important for smaller brands.
The Nielsen analysis reveals that brands with market share levels of over 10% achieved on average around 2½ times the level of share growth per point of ESOV than brands with market share levels of under 10%.
Brand leaders achieved 1.4% points of share growth per 10% points of ESOV compared with challenger brands that can only expect 0.4% points of share growth per 10% points of ESOV.
The argument of Adam Morgan and his ‘Challenger Brand’ thesis always made intuitive sense. But here at last we have the financial rationale for it.
The effect of overspending is less pronounced for smaller brands. They really have no choice but do communicate and behave in radically different ways if they are to grow.
Beyond awareness: The fame effect
So far, we’ve been talking about share of voice in terms of simply exposing people to marketing content. It’s just been about eyeballs and awareness.
But there’s another effect that appears to be far more valuable than simply buying awareness.
And that’s fame.
Fame is not the same as simple exposure or awareness. As the IPA’s report notes, fame is not a state of knowledge, in the way that awareness is. Fame is the phenomena of on- and offline buzz that contributes to as the report puts it “a perception of authority in the category.
The IPA’s report Marketing in the Era of Accountability analyzed 880 case studies derived from the IPA Effectiveness Awards.
The striking finding is that campaigns that set out to generate brand fame outperformed others on all business metrics, particularly market share growth.
The chance of achieving very large awareness growth is closely linked to ESOV.
However, very large fame effects are much less dependent on ESOV. Instead, they are a result of creativity rather than expenditure.
Thus fame, unlike awareness, is not something that can be bought – as a route to growth, fame is much less a function of money.
The extra significance of this is that in Marketing in the Era of Accountability it was also shown that campaigns building brand fame were much more likely to lead to business success than those building awareness.
While 40% of campaigns aiming to build brand fame reported very large effects on market share, 34% of campaigns aiming to build brand awareness reported very large effects.
Similarly, in an aside to their data analysis, Nielsen note that “‘consumer generated media’ resulting from campaigns that consumers want to talk about can significantly enhance business results.”
Three ingredients for growth
Together these studies provide us with invaluable evidence for what drives results:
a) Spend ahead of your market share
We should avoid the temptation to rush into developing work until we know what the budget levels are. If businesses are not investing ahead of market share then the chances of growth are significantly diminished, putting an unfair burden on creativity to make up the shortfall.
Equally, we should avoid signing up to Performance By Results contracts without knowing what the investment behind our work will be. As Peter Field has reminded us, brand targets cannot be divorced from the communications budget: “A target that is realistic with one budget level can become unrealistic when this is lowered.”
b) Treat creativity as essential, not a nice-to-have
Creativity isn’t an indulgence. Aside from optimal investment levels, it’s the biggest lever of growth available to a business.
c) Seek fame
Content that gets talked about, shared, played with is demonstrably more powerful than content that simply gets viewed. Though people still need to know about it for those effects to take place.
The common theme
There is a clear and common theme running through all this data:
Not merely spending, but investing ahead of one’s market share...
Not merely treating creativity as a Nice to Have, but actively pursuing it as an essential business driver...
Not merely buying awareness, but seeking fame...
Success is a question of overcommitting oneself.
As Bill Shankly understood, there is no room for hesitancy or half-measures.
Overcommit. Or go home.
Sources
Peter Field, ‘Account planners need to care more about share of voice’, Admap September 2009, Issue 508
IPA, Marketing in the Era of Accountability
IPA, How Share Of Voice Wins Market Share: New Findings From Nielsen And The IPA Databank
IPA, The Link Between Creativity And Effectiveness: New Findings From The Gunn Report And The IPA Databank
Adam Morgan, Eating the Big Fish: How Challenger Brands Can Compete Against Brand Leaders