Report Shows CEOs the Commercial Payback of Advertising

Date: 09/09/2015 | Comments

            Report Shows CEOs the Commercial Payback of Advertising  

Marketing “La La Land” Dispelled As Report Proves Commercial Case for Advertising

Thursday, 10th September 2015:  A report being released today by Television Audience Measurement (TAM) Ireland , in association with the Institute of Adverting Practitioners of Ireland (IAPI), will arm marketers across the country with the ammunition to earn more share of voice in Ireland’s boardrooms.

A Research Study : The Value of Advertising in Ireland  is the first of its kind in Ireland. It contains two  studies, both independently carried out, which delve into advertising and its role in delivering business results and commercial return.  The research uses IAPI Advertising Effectiveness award winning case-studies over 18 years to examine the link between commercial pay back, media investment and creativity. In addition, the studies establish the basic principles of effective campaigns. 

The first study -  A Line in the Sand – was conducted by strategic planning consultant – Karen Hand , along with TAM’s CEO Jill McGrath and examines the overall commercial evidence for investment in advertising, media and creativity. The second study – I must be Talking to my Friends – was authored by Smurfit Business School Marketing and Branding lecturer, John Fanning. It highlights the principles and practices that are needed to develop outstanding effective advertising, using best-practice examples from the case studies.

Marketers and CEOs traditionally have different views on how to demonstrate commercial payback. The findings from A Line in the Sand, provide support that they might finally have one common metric to live by: value market share. The IAPI ADFX award winning campaigns studied, delivered on average a 6% increase in value share for the brands. This translated to 0.8% value share growth per month compared to non- awarded cases that delivered 0.5% per month.

The fight for marketing spend might now be a little bit easier. The research also demonstrates that there is a direct correlation between advertising investment and commercial payback. It shows that advertising is still a most effective defensive method to maintain market share  In fact, the research  highlights the significant relationship between brands that invest in media spend and their market share.

 

These findings are of particular interest in a climate where brands have started to spend again.  From January to June this year, brands such as KBC Bank, Laya Healthcare, Bórd Gáis Energy, and Toyota have started to put significant spend behind their campaigns. Nissan has invested 141% more spend compared to last year.[1]  More generally, in the last year, advertising spend has jumped by 12%.  The big spenders are Sky, Diageo, Unilever, UPC and Lidl Ireland Gmbh. In the motor industry, figures show that motor brands investing in advertising are amongst the top five in terms of market share. [2] While brands that have spent wisely and consistently over the last number of years continue to maintain their market share; Guinness, Heineken and Bulmers are such examples. Bord Bia has also invested in creative work and media spend for Quality Mark and is scoring very highly in reputation surveys as a result. In the retail sector, both Aldi and Lidl have invested significantly in advertising which has contributed towards growth for both brands. Their combined share of market was 16% in 2014, up from a combined share of 10.6% in 2011.4

The research also confirms that creatively brave campaigns are not only more effective but also more efficient. Put simply, creatively awarded campaigns can deliver ten times higher levels of media efficiency. So despite some CEOs believing that marketers are stuck in “Marketing La-La Land” or that “they are disconnected from business results” [3] it appears that the more creative the campaign, the more commercially hard-working it will be.

Tania Banotti, IAPI CEO said, “The study clearly shows the commercial value of effective advertising and how marketing efforts are vital to the performance of a business.  CEOs of the world’s leading and most progressive brands know this and build their market share by investing in both media and creative world class campaigns. In doing so, they also bullet proof their business. There is more work to be done by the whole marketing community to show Irish business the commercial value of strong advertising.

The IAPI ADFX awards celebrate the top campaigns that impact the bottom line. We are delighted to see independent verification that Ireland’s advertising industry is broadly in line with best practice outcomes in other markets. In fact, the studies highlight the commercial importance of setting measurable objectives, investing in media and backing creativity within the Irish market. These are significant findings that we can leverage to persuade clients and boardrooms to invest more.”

Jill McGrath, TAM Ireland CEO said, “The findings from this report present a powerful argument for the tremendous impact that advertising can have on a brand over both the short-term and long-term. This report arms the marketing community with the evidence that investing in creativity and media spend over an extended period is a proven strategy for achieving growth in value market share.”



[1] KBC Bank spend increased by 77% in TV, Digital & Outdoor. Laya Healthcare spend increased by 74%, mainly in Digital and Outdoor. Bórd Gáis Energy spend increased by 58% mainly in TV, Digital and Outdoor. Nissan spend increased by 141% mainly in TV and Digital. Toyota spend increased by 95% across all mediums except outdoor. Source: Nielsen

[2] Volkswagen SOM (Share of Market) 12.27% Share of Voice 4% , Toyota SOM 10.67% SOV 10%, Ford 9.74% SOV 11%, Hyundai SOM 9.74% SOV 8%, Nissan SOM 9.10%, SOV 8%. Source: www.simi.ie

[3] Fournaise study of 1,200 CEO’s surveyed in Europe, USA and Asia in 2013

4 Kantar world panel monthly retailer share