Binet and Field outline key formulas for brand building in context

The IPA’s latest publication from Les Binet and Peter Field, Effectiveness in Context, provides advertisers with a self-help manual for brand building according to a brand’s market category, business model, life-stage and size. The pioneering work includes three tables of values to help advertisers calculate their: optimum brand building to sales activation ratio, budget setting, and target ROMI. It was published today (9 October 2018) as part of the cross-industry Eff Week conference, spearheaded by the IPA.

Binet and Field outline key formulas for brand building in context

The publication is designed to help guide advertisers’ strategies depending on the context that their brand operates in. It reveals that while there are some universal lessons that advertisers can apply to all brands, there are a number that are context-specific. As such, there is no-one size fits all approach to effectiveness; brands must adapt the rules and established 60:40 brand building to sales activation ratio accordingly.

According to Binet and Field’s research, there are some universal rules for all brands in all contexts:

  • All brands need brand building – Brand building is the main driver of long-term growth and involves the creation of memory structures that prime consumers to want to choose the brand. Without brand strengthening, growth will be weaker, activation will be weaker, pricing power will not improve and profitability growth will be severely reduced
  • All brands need sales activation – Sales activation dominates short-term sales uplifts and involves behavioural prompts to encourage consumers to ‘buy now’. It is strongly boosted by brand building and is essential for efficiency. Without it investment will be weaker and growth will suffer
  • The optimum balance between brand building and activation varies by context depending on the relative ease/difficulty of the two tasks
  • The key factors that drive the optimum balance are the relative levels of emotional and rational consideration in consumer choice – where emotional consideration is high, brand building is easier; where rational consideration is high, activation is easier; where both are high, budget should be shifted towards the more difficult task.
  • Penetration growth is always the main driver of growth for all brands. While penetration and loyalty go hand in hand, loyalty doesn’t increase without penetration

In addition, this latest research reveals that there are six contextual factors that brands must also consider and offset accordingly:

  • Which sector your brand is in – e.g. Durables, FMCG, Financial Services, Other Services, Retail
  • How consumers purchase your brand – e.g. offline, online, serial, subscription
  • How your brand is priced – e.g. value/mainstream, premium
  • The level of innovation applied to your brand – e.g. none, any, new variant, new sub-brand, entry into new category
  • The life-stage of your category- e.g. new, established, declining, stagnant or low growth; medium or high growth
  • How big your brand is – e.g. launches in first 1-2 years, launches after first year, small brand, medium brand, large brand.

Flexing the formulas to your brand

Taking both these universal and contextual considerations into play, and with each variable carrying a different value to offset, Binet and Field provide three tables of values to help marketers calculate – according to their brand - : (1) the optimum brand building to sales activation ratio required; (2) how much budget to set and (3) their target ROMI.

Theory into practice: an FMCG example

To exemplify this, Binet and Field detail how to calculate the optimum brand building to sales activation ratio of a new, non-food FMCG brand:

Applying the offsets

Says Janet Hull OBE, Director of Marketing Strategy, IPA: “In an increasingly competitive and complex eco-system, understanding context gives competitive advantage to investment strategies, media and creative briefs, and implementation. This new publication provides a veritable manual for brand building, relating theory to practice, and crucially sets the context for how people choose and buy brands. It also provides some surprising modifications to established best practice and observes that whilst marketing has been improving its effectiveness in some contexts, it has been destroying it in others – so the opportunities for brands to steal a march on their competitors are highly context-specific.”

Says Matt Hill, Research and Planning Director, Thinkbox: “Binet and Field never disappoint. There is an enormous amount here for marketers to get their teeth into, with findings that can be tailored to their individual businesses. For anyone after expertise on effective marketing strategies, it should be read cover to cover. Equally it will work well for those looking for a reference guide on how Binet and Field’s rules differ for specific brands in a specific life stage.”

Says Jonny Protheroe, Head of UK Market Insights. Google: “When presented with new research on effectiveness, marketers can be left wondering, “How does this apply to me? What are the implications for my brand and category?” After all, such learning must be applied with context in mind. This latest report by Les & Peter helps to answer those questions. The findings illustrate that effectiveness is nuanced, and gives direction to marketers as they seek to evaluate their own activity. This is important because even though advertising budgets continue to grow, businesses are requiring more accountability from their marketing teams, and measuring effectiveness is becoming increasingly challenging.”

Ten killer charts from Les & Peter's presentation at EffWeek 2018 can be downloaded from the Effworks website.

Effectiveness in Context forms part of the IPA’s Marketing Effectiveness in the Digital Era series, and is available to purchase from the IPA website (£25 for IPA members, £50 for non-members) and Amazon (£50). 

You can also join the conversation on Twitter #EffWeek @EffWorks and find out more at effworks.co.uk