What lessons can the 2020 IPA Effectiveness Awards teach us about the future of advertising? In the latest of our chapters from Advertising Works 25 – The Definitive Guide to Effective Advertising, Susan Poole examines how legacy brands took on a challenger mindset.
Writing this in the summer of 2020, the notion of challenge doesn’t seem abstract. With protests worldwide supporting causes including Black Lives Matter and trans rights, challenge seems commonplace. Over time, whilst some brands take up causes to fight for them overtly, there are other brands that you wouldn’t think of as challenging. This applies in the arena of marketing as much as it does around causes. There is always a steady stream of new brands that seem exciting and are often badged as 'challengers', for rewriting the rules of their category, like Purplebricks, or forging their own category, like Oatly. It’s not often we think of large or established brands as challengers, yet that is what this chapter is about.
When ‘challenger brand’ thinking was first popularised over 20 years ago in Adam Morgan’s book, Eating The Big Fish, it was an era of new upstart brands snapping at the heels of the establishment. Challenger brands took on the leaders, often making this competitiveness overt as Virgin Atlantic did with its jibes at British Airways. Challengers often framed their position as ‘David versus Goliath’ narratives. In addition, big brands often also launched their own challenger brands to compete with rivals, rather than get involved directly, as the Co-op Bank did with its online venture, Smile, and British Airways did with its discount airline, Go.
But since its heyday, the notion of a challenger brand appears to have fallen out of favour. Yet amongst this year’s IPA Effectiveness Award winners we have seen a new cohort of challenger brands. These challengers weren’t the new upstart brands on the street and they weren’t forging a new category. Nor were they challenger brands started by big brands to fight in a way their parent brands couldn’t. These were large or legacy brands that discovered (or rediscovered) challenger mindsets. These brands adopted challenger mentalities to change their own fortunes – proving that being a challenger truly is a reflection of outlook, not size.
Brands in this year’s IPA Effectiveness Awards that have (re)discovered a challenger spirit include Gordon’s, Aldi, Heineken, Tango, and Heinz. These are well-known brands that could never be described as young whippersnappers. In fact, they have all been around for 20–250 years! They each faced different challenges but what unites them is a refusal to accept limitations or the fate of share decline or delisting. They looked to their categories and sought to change consumer perceptions by doing things differently, using a challenger mindset. In doing so, they avoided conventional marketing approaches typical of brands of their age or stature. They often had to think quite smartly to secure bigger budgets to enable them to make a step change. To quote Adam Morgan, they all shared 'ambitions bigger than conventional resources'.
These established brands were all facing challenges that typical marketing wisdom would have suggested they should accept as their fate, including managed decline, divesting the brand, remaining niche or accepting the risk of another failed launch. But each of these brands spurned these futures in favour of a challenger approach that proved effective.
Some of these challenger brands also disrupted the dominant discourse in the category. In the words of Adam Morgan, they were 'enlightened zaggers': 'The enlightened zagger deliberately swims against a prevailing cultural or category tide'. They deliberately chose to talk and behave differently from others or the norm in their categories.
New ways of approaching a category require budgets to support them which, in the face of adversity, aren’t always easy to find. But Gordon’s took a smart approach to carve out a budget to prove its new concept. It redesigned the bottle and used the cost-of-goods saving to carve out a test budget. If the test worked then more budget would be released. And it was.
Evidence shows that you need to punch above your weight to grow – i.e. share of spend needs to be greater than your share of voice (excess share of voice).6 This new breed of challenger brands all understood this and factored excess share of voice (ESOV) into their budget setting. Aldi overtly used ESOV to guide its media planning. Heineken required all its markets to make a three-year commitment to devote at least 25% of their total spend to the new launch. The authors of the Heineken paper note that the brand ‘heavily and unapologetically’ outspent competitors. Tango also showed ESOV in action: it had a SOV of 12% to help it grow from 4% to 6.5%.
Many of this new breed of challenger brands had one other advantage over smaller, newer challengers: they were often already large brands. The downside of this is that the brands often needed large spend to have a positive ESOV to drive growth. But it has also been shown that the relationship between spend and share isn’t completely linear: larger brands have an advantage as they don’t need such a large positive ESOV to grow. Nielsen research shows that larger brands benefit most from a positive ESOV – per 10% of ESOV the leading brands in a category can benefit on average from 1.4% market share growth vs. 0.4% growth for smaller brands with the equivalent ESOV.
What this selection of cases from the 2020 IPA Effectiveness Awards has shown is that size isn’t a barrier to challenger thinking. These large or legacy brands have employed challenger thinking whilst being far from spring chickens. Gordon’s is a 250-year-old brand, Heineken has been around since 1873, Tango and Aldi had been around over 20 years and Heinz is a 150-year-old favourite. This didn’t hold them back. This shows that challenger thinking has grown up. It is no longer the confine of startups or small brands (if it ever really was). It is a powerful way of driving growth and giving new life to brands whilst making them fit for the future.
One thing that was clear from reading the papers is that they weren’t all brands you would automatically think of as challengers. But many papers showed how they looked to brand history to rediscover the challenger thinking that was inherent in the brand. For example, challenge was inherent in Aldi’s business model, but hadn’t been dramatised in its first 20 years in the UK. Challenge was inherent in the Tango brand history, but had been dulled since the brand’s prime. Challenge was part of the Heineken story with its distinctive singular-product approach in a category filled with multi-product ranges, but this actually made its non-alcoholic launch trickier.
Brands weren’t just jumping around sporadically, but were rediscovering the element of challenge that fitted their brand and using it to build an emotionally powerful brand and drive the growth that comes with it.
Challenger brand thinking has grown up.
This is an abridged version of Susan Poole’s chapter from Advertising Works 25 – The Definitive Guide to Effective Advertising.Purchase Advertising Works 25