New insights suggest we have to look beyond advertising alone to drive growth

There are many ways of communicating now. The question, for all clients, is which ones will deliver growth, and which ones are a waste of effort. New analysis conducted by EssenceMediacom means that we now have insight to answer that question category by category.

We have conducted a unique piece of data analysis to provide new insights by fusing six years of Euromonitor sales data with six years of YouGov consumer panel data. This allows us to understand what drives growth in different categories and subcategories of brands and how to adapt our comms strategies to ensure our clients’ brands succeed.

Here’s one finding. In the food category, defined at its broadest, the most powerful lever for growth is based on perceptions of value for money (this doesn’t necessarily mean cheapness. It can mean if, as a mum, I buy this new product, will my kids eat it?). However, in the subcategory of confectionery it is brand impression that drives most growth, perhaps because confectionery is a simple treat, rather than a food staple.

The analysis provides insights to add new channels and ways of communicating to our plans. This means that we can create better winning strategies for brands, where advertising continues to play a crucial role, but that in addition we plan a 360-degree view, including, for instance, pricing strategies, customer journeys, personalisation, influencer campaigns, and cultural experiences. This opens a new chapter in holistic measurement and strategic thinking for brands.

We live in a New Communications Economy

Our plans and what is in them must change. Advertising remains fundamental to brands. Yet some of the existing heuristics, or rules of thumb, for planning are based on information and beliefs from two previous eras, the era of mass market advertising, and the subsequent digitisation of the media economy. We are now in the midst of the biggest multigenerational shift in our history.

The cost of reaching young adults on linear television has risen by over 300% in the last decade. Nearly half of adults think that advertising is a waste of their time, and if you’re thinking that this was always the case, this has risen by 80% in the last decade. The average viewing time for a video on social is less than two seconds.

The role of media strategy and planning used to be about maximising reach. Media was a vehicle for reaching people with advertising, usually by interrupting them. But how people interact with media has changed. Media is not just about reach. It's about shopping, dating, gaming, socialising, influencing, self-affirmation, interacting, and researching. And about reaching people with ads.

There’s great news. People are spending 187 minutes more every day with media than a decade ago. But 46% of that is with media that is not ad-supported. The number one form of content consumed these days is user generated. Goldman Sachs estimate the current value of content creation is $250bn and believe that will double in the next five years.

And so: the shape of our plans, and what is in them must change.

There was a big debate at EffWorks 2022 about whether share of voice, share of attention or share of search was most important. In our view, all of these are measures that assume that the default plan is to interrupt people with paid advertising. This is not the only way to communicate, and whilst advertising remains a crucial comms channel it isn't the only way to drive growth today.

Planning for advertising in isolation means facing cut-throat competition

We must plan to influence people across culture, platforms, and social. This is not to say that advertising and share of voice, attention and search are not important. They are. But only planning for this can mean that brands fight for attention in a red ocean of cut-throat competition. It is crucial to face into the competition as a bedrock for brands. It is crucial to drive share of voice in the advertising eco-system. Breakthroughs, however, may come from thinking more broadly about the blue ocean of wider possibilities.

The red ocean is where the competition is. The blue ocean is where additional advantage and profits can lie.

We set out to find a new data-driven, holistic strategic insight model for the New Communications Economy, for investing in more than just advertising. The existing models largely have set out to prove the value of advertising alone.

Our new model helps to break legacy practices. It is an analysis of two respected international existing data sources: YouGov, the global public opinion polling company, and Euromonitor, the world’s leading provider of market research data and analysis. Our data analysts combined six years of UK data (from 2016 to 2022) and used the theories of complex systems, and a ridge regression was applied in this exploratory analysis on the levers of growth by category. (NB. Appropriate interpretation of results requires deep knowledge and experience.)

This period therefore covers pre-pandemic, pandemic, post-pandemic, and the cost of living crisis. It is a good base on which to develop strategic insight.

Brand growth is driven by relevance

The team examined all of the YouGov panel questions and found five that drive growth. We are calling these the levers of Relevance. (Other questions were considered but did not add to the analysis or the conclusions). 

There are five levers of Relevance in YouGov that our analytics team have shown drive growth. The levers have different meanings by category:

• Ad awareness:  Which brands have you seen an advertisement for in the past two weeks?
• Brand impression: Do you have a generally positive or negative feeling about this brand?
• Word of Mouth: Which brands have you talked about with friends and family in the past two weeks?
• Quality:  Does this brand represent good quality or poor quality?
• Value:  Is this brand good value for money or poor value for money?

Of course, the answers to the questions will vary by category. The perception of quality is very different for a car compared to a can of fizzy drink. The value for money question for microwave rice might have less to do with price point or promotions and more to do with whether the kids only like chips and won’t eat rice instead. (For this reason, Bens Microwave Rice’s partnership with top TV chef Jamie Oliver’s 15-minute meals meant that the family cook got reassurance that they could make great tasting, economical and exciting food for the family.)

The analysis is extremely insightful. We all instinctively know that the purchase journey for a holiday is not the equivalent of buying snack food. But until now we haven’t known exactly how it is different.

Here are some examples. 

Growth in the broad food category is driven by perceptions of value

Food is a broad category, and the main lever for category growth is perceptions around value for money. Not all the brands within food are the same, however, and growth in confectionery is driven by word of mouth. This does not of course negate the role of brands or their advertising across food more broadly, and having a strong brand is a bedrock for communications. However, growth may be driven by changes in value for money perceptions in the competitive world of food.

Food is a Value Dominant category. Word of Mouth is also significant though, contributing to over a quarter of market share in category. 

Brand Impression is a more important source of growth in confectionery

Confectionery is a Brand Impression Dominant category. Value is also significant though, contributing to over a quarter of market share in category. (Brands include: Cadbury, Mars, Haribo, KitKat, Skittles, Ferrero Rocher, Tic Tac)

For fast fashion brands, word of mouth and value are all important

Fashion is a category in which Word of Mouth and Value are most significant. However, the other three levers are also contributory and should be considered. (Brands include: Asos, Boohoo, Next, Lyst, Burberry, Hugo Boss, Michael Kors, Polo, Adidas, Victoria's Secret). 

Fashion is one of the categories where all five levers are of equal importance. A deep dive into fast fashion shows that brand impression is most crucial.

Planning for relevance and growth requires different approaches by category

Our analysis encompasses 16 macro categories and more than 60 subcategories. Investing beyond standard advertising in the New Communications Economy has been proven to work.

For instance, EssenceMediacom’s case study for eBay’s Love Island partnership with ITV saw a focus on pre-loved fashion and drove significant reappraisal of eBay as a fashion destination and of eBay’s sustainability credentials. The campaign went far beyond advertising alone to drive brand impression for eBay as a sustainability champion and involved creating a dedicated hub on eBay where viewers could shop for pre-loved outfits inspired by the show’s contestants, as well as hosting live events, social media activations, and media partnerships.

Coca-Cola is a brand that was born in the era of mass communications. Its growth was driven by an outstanding series of broadcast ads, from the iconic “I’d like to teach the world to sing”, through to the much loved “The Holidays are coming”. The carbonated drinks category shows that word of mouth is an important lever for growth now, and of course Red Bull has been very strong in driving talkability around a series of stunts. People still talk about the Space Dive back in 2012. Therefore, plans for Coca-Cola too have changed. In Italy, the team created a hit song, ‘Mille’, performed by the Italian pop stars Fedez, Achille Lauro, and Orietta Berti, which formed the heart of a campaign that incorporated TV advertising, influencers, live events, social media filters, and sampling. The success of the campaign was beyond expectations with a significant step change in sales.

New Relevance Rules

So, what is next? We have established new Relevance Rules which provide insight for growth in the New Communications Economy through this rigorous analysis.

Relevance Rules:

Findings
1. Every category is different and needs different strategies for growth.
2. Driving short-term advertising recall alone may not be the only (or best way) to grow in every category.

Intimations
1. Competitive advantage is gained by building memory structures outside of advertising alone.
2. Measurement needs to be adapted to deliver true accountability.

We have to look beyond advertising alone to drive growth in the New Communications Economy. Whether this is through partnerships, sponsorship, sports, gaming, user experiences, ecommerce, ad funded programming and content, or events, it is not just short-term advertising awareness, but relevance that drives advantage.

Catch up with EffWorks Global 2023

 

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