Iris & IPA Eff Week

11Confidential © 2016


Jonny

ProtheroeHead of Marketing Insights

UK

Google

Lindsey Clay

CEO

Thinkbox

Michael

Barrettadidas GLITCH

Sally Taplin

Managing

Partner iris

Concise

Sophie Lewis

Head of

Planning, iris

Chair:

Paul

BainsfairDirector General

IPA

Ben Essen

Executive Planning Director

iris


Latest thinking fromthe IPA


What do we mean by effectiveness?


16/11/2017

Successful delivery against business objectives.

Driven by an evidenced view of what is and isn’t working.

Active

decision

making

KPIs

Consistent

measurement

Learning

culture


How is your organisation doing?

16/11/2017

Self-assessed

‘scores out of 10’

Source: IPA Culture First


However overall levels of effectiveness are falling

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2.0

2006 2008 2010 2012 2014 2016

Nu

mb

er

of

very

larg

e

bu

sin

ess e

ffe

cts

10 years endingSource: IPA Databank


So what’s going on?


Source: Companies; Jefferies analysis

Organic sales growth in Global Foods & HPC since Q1 2009

1 Average of Nestle, Unilever, Danone, Kraft, Mondelez, P&G, Colgate, RB & L’Oreal

(1.9

%) (0

.2%

) 1.4%

4.9%

6.3%

5.7%

5.0%

4.6%

3.7%

3.0%

2.2%

1.5% 2.

0% 2.6%

1.6% 2.

4%

2.4%

4.0%

3.2%

2.7%

2.0%

1.5%

0.2% 0.5%

0.0%

(0.1

%)

0.2%

0.1%

1.5% 1.6%

1.3%

0.8%

0.3%

0.3%

5.1%

2.7%

1.8%

(0.4

%)

(1.3

%)

(1.3

%)

(0.6

%)

(0.0

%)

1.1%

3.6%

4.0%

4.7% 4.0%

2.3%

2.4%

2.0%

1.9%

0.6%

0.9%

1.3%

1.3%

1.7%

2.8% 3.

0%

3.0%

2.8% 2.6% 3.

5% 1.6%

1.4%

1.5%

1.2%

1.3%

1.1%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

Volume Price/mix

With growth slowing, efficiency trumps effectiveness


Brands are spending less on media

0%

2%

4%

6%

8%

10%

12%

14%

16%

2006 2008 2010 2012 2014 2016

Ave E

SO

V

10 years ending

ESOV all

ESOV long cases

Source: IPA Databank


Sales activation has grown

40% - 50%advertising spend.

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2015

Analogue Digital

Direct response ad expenditure (£m)

Source: Enders Analysis

Harnessing opportunities to activate immediate sales


Source: Emma Harris, IPA

breakfast

86

30

0

10

20

30

40

50

60

70

80

90

Months

1984 2013

65% decline in

length of agency

tenures

Exacerbated by shorter tenures


Increased activation of sales, lack of investment in brand

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2006 2008 2010 2012 2014 2016

% c

ases r

ep

ort

ing

very

larg

e

eff

ects

10 years ending

Activationeffects

Brandawarenessgrowth

Source: IPA Databank, 1998-2016 cases


“Putting a financial outcome on our brand campaign is

virtually impossible, because it’s not driving a specific

customer to come in and buy xyz – it’s driving a brand

halo effect.”

Marketing Finance Controller

We’re failing to justify ‘the fluffy stuff’

“I am a Finance person. I like certainty. Marketing also look at – I can’t

quite remember the name of it – something to do with brand equity. If

I’m really honest from a finance point of view I don’t give much weight

to the softer ones – the brand equity stuff.”

Finance Director. Source: IPA Culture First


Sale

s u

plif

t o

ver

bas

e

TimeSource: Binet & Field 2013

Sales activation

Short term sales uplifts

Brand building

Long term sales growth

Short term effects dominate ~6 months

We need clearer distinction between short and long term levers


“It’s about equilibrium and balance. Finance gives you an

indication of the current health of the company. The brand

is an indication of the future performance.”

Corporate Innovation and Strategy Director.

“We need to think of marketing as less of a cost centre

but as a strategic growth driver.”

Lindsey Clay, Thinkbox.

Source: IPA Culture First, iris Eff Event

We need clearer distinction between short and long term levers


So what do we need to do?


Commit to the KPIs that matter

Methods

(


Start talking the language of finance

16/11/2017

‘If we change the

language, Financial

Directors will start

paying attention’

Jonny Protheroe,

Google


Non working media

Brand halo effect

Soft metrics

Longer term spend

Asset Creation

Value/Margin protection

Levers to unlock future growth

Margin defence /Share protection

Start talking the language of finance


Pushing the effectiveness agenda forward

2323Confidential © 2016Confidential © 2016

98.6%99.8%

no

data

targeting

with

data

targeting

1. Move

beyond

effectiveness

by

increments


1. Move

beyond

effectiveness

by

increments


1. Move

beyond

effectiveness

by

increments

“We need old forms of measurement for new

forms of media”

Lindsay Clay, Thinkbox

“Sometimes you need to throw all the cards in

the air to try something else. Rather than

optimise towards the middle, ask yourself what

was special about the top 1%?”

Jonny Protheroe, Google


“If everyone were to

advertise effectively,

then advertising

wouldn’t be effective”

Ivan Spiegel,

Snapchat

2. Treat effectiveness as a competitive sport


2. Treat effectiveness as a competitive sport


“For any brand with

competitors, there’s no such

thing as the no-risk option. If

you don’t do it someone else

will do it…

But a small controlled experiment

can demonstrate that it can work”

Michael Barrett, adidas Glitch

Source: iris Eff Event


“This £ spend is worth £xx in its lifetime”

• Beyond direct sales returns

• Create proxys for long term profit growth

• Don’t underestimate the unmeasurables

• More focus on price elasticity

3. A more holistic view of ROI


“Don’t be too quick to judge short term measures. They tell you that

you’re doing something right now that is working. It’s ok to embrace

the pragmatic within the big picture.”

Michael Barrett, Adidas Glitch

“How do you give quantifiable value to the brand in the future? How

demonstrate its value vs quick fire returns?”

Sophie Lewis, iris

“Back in 2007 Marketing in the Era of Accountability identified the most

accurate predictor of effectiveness was likeability. That’s not a bad

measure”

Lindsay Clay, Thinkbox Source: iris Eff Event


4. Introduce the

language of

risk and reward


“Risk taking isn’t gambling. It’s having a culture that is

prepared to look forward and plan. If you don’t have the

planning you can’t confidently take a risk.”

Sally Taplin, iris

“Brand response means we’re doing it for brand reasons but

we’ll measure it using response metrics”

Jonny Protheroe, Google

Source: iris Eff Event


Jonny

ProtheroeHead of Marketing Insights

UK

Google

Lindsey Clay

CEO

Thinkbox

Michael

Barrettadidas GLITCH

Sally Taplin

Managing

Partner iris

Concise

TODAY’S PANEL

Sophie Lewis

Head of

Planning, iris

Chair: