Effectiveness lies in channel integration
Ogilvy & Mather
Today’s most effective campaigns use twice as many channels as in the 1990s, but using multiple media specialists can cause disjointed, confusing advertising.
An average effective campaign in the 1990s used three media channels. Effective campaigns in 2010 used seven channels, judging by this year’s entries to the IPA Effectiveness Awards and the Warc Effectiveness prize. It is highly unlikely, to put it mildly, that brand communication budgets have more than doubled in real terms over this period. The implication is that campaigns are using more channels by spending less on each. Is this a good trade?
Maybe not. True, today’s target consumer is more likely to be surrounded by media targeting than in the 1990s. The campaign is waiting for them wherever they turn. But that does not mean it will be more effective.
Les Binet and Peter Field counted the number of channels used in campaigns in the IPA Effectiveness Awards that created ‘very large’ business effects (Marketing in the Era of Accountability, Warc, 2007). It turned out that the optimum number of channels per campaign was three (or four, for brands with large budgets).The success rate for campaigns using one channel was 59%, rising to 74% for three channel campaigns. But the success rate for five channel campaigns fell to 57%, slightly below the one-channel success rate. In other words, focusing on a few channels is more sales-effective than stretching the budget across too many touchpoints.
Why are campaigns that use more than three channels less likely to be effective? Binet and Field suggested some hypotheses, though they do not seem entirely convincing. One was diminishing returns in terms of coverage. Fair enough, but there may be frequency gains, which would be expected to increase effectiveness, rather than reduce it. Or was it because of higher production costs in relation to media spend? So, why were three-channel campaigns more effective than one-channel?
It’s a bit of a mystery.
There are two other factors that might help explain why campaigns using many channels are less likely to be effective: a low weight of activity per channel; and the extent to which multi-channel campaigns are integrated in terms of content.
There are two recent pieces of evidence about the importance of weight, beyond the observation that brands with large budgets succeed with four channels, rather than three. Binet and Field have shown the correlation between a brand’s share of voice and its market share. Market share typically increases with high share of voice, and decreases with low share of voice; that is to say, when the brand’s share of voice is smaller than its share of market. Secondly, a parallel, independent study by Nielsen found the same relationship in a different database – not of IPA Effectiveness winners, but of 123 brands across 30 packaged goods categories (How Share of Voice Wins Share of Market, IPA, 2009). The evidence strongly suggests that brands that spend too little per channel, relative to their market penetration, struggle to grow.
But some do. There is more to effectiveness than weight alone. content matters too. In fact, content matters so much, it can compensate for low weight. The latest evidence for this comes from analysis of the content of ‘creatively awarded’ campaigns in the IPA Effectiveness Awards (The Link Between Creativity and Effectiveness, IPA, 2010). campaigns that win both creative and effectiveness awards share two characteristics. First, they are more likely to appeal to the emotions. logic persuades, but emotions motivate. Second, they are more likely to create brand buzz. It is known that famous campaigns create PR for the brand, but in the new communications era of consumer-generated content and social media, this benefit is magnified.The campaign gets loved in Facebook groups, discussed on blogs, forums and chatrooms, and imitated on YouTube.The result is that the brand is seen as the most authoritative in the category; it defines the category in perception.
For the same weight (defined as share of voice relative to share of market), campaigns with this type of ‘creative’ content were 11 times more likely to be effective. They generated almost six percentage points of market share growth per unit weight on average, while the other campaigns generated only half a percentage point of market share growth per unit weight.
So, content really matters. In today’s seven-channel campaigns, there are, of course, seven pieces of content to be produced. It was hard enough to integrate the content of three-channel campaigns in the 1990s, so seven is much harder. Some clients solve this difficulty by commissioning all communications from one agency group; integration then becomes the agency’s problem. But most do not. Rather, they buy communications from a variety of niche specialists in addition to advertising from their main creative agency. clients might buy digital from a specialist digital agency, retail activation from a specialist retail agency, etc.
Using specialists in each field seems to makes sense, but there may be a hidden drawback. Multiple communication suppliers can compound the problem of content integration. Each agency fights its corner in terms of origination – it has to, or it may lose income. The danger is that channel tails may end up wagging the brand dog. The campaign could become a Frankenstein’s monster, made up of bits and pieces from various channels jumbled together any old how. There can be no synergistic benefit from adding more channels to the campaign unless all content is aligned.
BEYOND THE TV COMMERCIAL
Institutional consumer research systems can also militate against content integration. Some clients cannot approve or run creative work until it has passed an internal norm on a quantitative pre-test, which invariably is still designed around TV commercials. The somewhat absurd consequence is that one part of the company berates the creative agency for its unwillingness to embrace the new communications age, while another part of the same company makes it all but impossible to
run campaigns that do not include TV. Pure-play communications in channels such as retail, digital or PR may escape this pretest fix, but by the same token may be less integrated with the brand’s main communications.
It is sometimes helpful to see how other companies have solved similar difficulties. In this case, IBM’s evolution in the computer industry may offer a useful parallel. In the days of mainframe computers, manufacturers such as IBM sold complete systems. The hardware, software, and peripherals like printers and tape drivers, came as a package. There is an analogy here with the
old full service agency. The agency would supply a complete marketing package: the marketing plan, the consumer research, the name, pack design and even the product formulation, as well as all the communications.
The computer market changed with the introduction of ‘open’ systems in the 1980s. IBM’s hold on its customers’ computer spending was challenged by pure-play companies, such as Sun Microsystems, HP, Microsoft and Intel, among many others. Similarly, the 1980s saw the market for full service agencies fragment. In-house media departments split off, as did direct marketing, consumer research and many other agency functions. The marcomms industry has become ‘open’ too.
Customers of both industries benefit from lower prices as a result of increased competition. But integration becomes a bigger problem. Indeed, IBM saw integration as customers’ biggest computer problem, and therefore its biggest opportunity. It believed customers would become increasingly impatient with an industry structure that required them to integrate parts from many different suppliers (Who Says Elephants Can’t Dance?, louis V Gerstner Jr, HarperCollins, 2002).
SHIFT TO SERVICES
IBM’s ‘big bet’ was that the industry’s disaggregation into thousands of niche players would make IT services, rather than IT hardware, a huge growth segment. Exploiting the opportunity would require massive internal changes. For one thing, IBM’s services unit ‘would need to be able to recommend the products of Microsoft, hp, Sun, and all the other major IBM competitors if that, in fact, was the best solution for the customer’. But the customer benefit was clear. Somebody has to do the integration. But does it have to be somebody inside the customer organisation? IBM said: “Transfer your IT assets – products, facilities, plus your staff – on to my books. I’ll absorb it all, manage it, guarantee performance levels… and I’ll charge you less than it’s costing you now.”
The results were astonishing. IBM Services grew from a $7bn business in 1992 to a $30bn business in 2001. (To put that number in some sort of context, the entire UK advertising industry in 2001 was worth less than $20bn.) It was responsible for 80% of the company’s revenue growth. As Gerstner states: “I would guess there are few companies that have ever grown a multibillion-dollar business at this pace.”
Ogilvy & Mather’s ‘big bet’ is that clients are becoming impatient with a marketing services industry that requires them to integrate ‘campaign piece parts’ from many different suppliers. At the same time, the old full service agency model is dead and buried. Is there a smarter solution?We have been working on this problem for some time. In our experience, there are three parts to the solution.
First, the strategic process must start with an articulation of the client’s business issue or opportunity. Not the awareness issue, or the image issue, or the conversion issue. We mean the business issue. Defining the problem to be solved in terms of awareness, image or conversion already contains a channel bias: we might look to solve an awareness issue with advertising,
a conversion issue with CRM, an image issue with PR and so on. But the business opportunity is, by definition, channel-neutral.
Second, we need to understand the consumer behavioural change that will exploit the opportunity. We emphasise behavioural change.What do we need people to do as a result of the campaign? What do they do now, and what do we want them to do instead?
Only after articulating the business issue, and then defining consumers’ desired behavioural changes, can we approach the question of communications architecture.The communications plan derives from the desired consumer changes, not from channel prejudice.
After these three steps, each communication discipline writes its own creative brief (it is important all disciplines use the same briefing format) and creative work emerges. The briefs inform pre-test objectives for each channel’s communications. pre-tests must be based on that channel’s specific objectives, not on the old pre-testing model based on TV. For instance,’resonance’ may be a more relevant effectiveness metric for the Twitter part of a campaign than the likely number of views.
This system applies whether the client only uses Ogilvy’s disciplines (PR, retail activation, direct and advertising) or uses other communication suppliers too. It produces deeply integrated creative work across multiple channels because all the marketing communication pieces share a common aim: solving the client’s business issue. Effectiveness, not channel, is at the heart of everything.
We call effectiveness the ‘Fourth Age’ of creative integration. In the early days, each medium was used independently for its own strengths, with limited integration through a shared tagline, personality or other creative device. Then came the ‘Matching Luggage’ age: direct, retail and other campaign pieces were made to look like the TV commercial. The first attempt at strategic
integration came with the Funnel Age, where communications were organised around tasks, rather than disciplines: tasks such as Awareness – Interest – Trial – Repeat.
In the Fourth Age, tasks are customised around ‘lived’ customer journeys; the focus is on the channels that actually matter; and we define roles for communications, not just messages.
In essence, clients can now outsource their campaign integration problem. Ogilvy’s role in developing the campaign architecture is that of an expert facilitator – ‘expert’ because our experience in four creative disciplines means we have a good idea of what can be expected from them in terms of changing consumer behaviour. An independent ‘facilitator’ because, as a
creative agency, we have no channel axe to grind; our income doesn’t come from selling media space. We are happy to work with communication experts in other fields, providing only they agree that solving the client’s business issue is the priority. In short,as David Ogilvy almost put it:’We all sell – or else.’
ABOUT THE AUTHOR
Tim Broadbent is global effectiveness director at Ogilvy & Mather. He is a Fellow of the IPA and visiting Professor of Marketing of the University of the Arts, London.