Brand Growth Study 2020: the role of creative developmentPublished on 16 11 2020
Article Lucas Hulsebos – CEO
The Brand Growth Study is a global, large-scale, continuous study among marketers that consists of 2 components: Qualitative interviews with CMO’s and marketing directors and an annual Quantitative study amongst people working in marketing, media, and advertising. This year’s theme: the role of creative development.
The study is running its fourth year and every year we have added a new country. The fieldwork started in The Netherlands and has now been extended to the UK and Germany, with over 1,000 marketers interviewed to date. The objective is to extend the study to more markets in Europe and create a continuous flow of information on how marketers organise themselves for growth. The study enables us to follow trends, highlight specific topics and understand the drivers for growth better. Especially in combination with academic research, meta-analyses, we provide the marketing industry with valuable insights and lessons to understand the drivers for growth better.
To do so, we analyse the data in a particular way. Based on the performance of companies on the most important KPI, we divide the respondents into 2 groups. The differences between the best and worst-performing companies (winners versus losers) show exactly how marketing should organise itself for growth and what a winning strategy could be. In this article, we will focus on these differences to get a better understanding of what creativity means for companies.
The role of marketing is a topic that we have explored more over the past few years. What is the role of marketing and how should we look at the effects of marketing? If we look at the KPI that marketers use for success, we have seen a significant change over the past decade. Looking at research amongst CMO’s, we have seen the importance of brand funnel KPIs (like awareness and preference) and NPS.
KPIs that marketers use for growth are becoming more and more business-related. A trend that has been consistent across the 4 years of measurements is the KPIs marketers use for growth: Revenue, Sales, and Market Share. We also see a big difference between the winners and losers. Companies that perform better than others, focus even more on these KPIs. Bad performing companies focus more on Retention and NPS.
Another very consistent trend can be found in marketer’s most important drivers for growth. Especially in the CMO interviews we conduct, the two main directions for growth are related to the brand strategy and the drive for innovations. This is confirmed in the quantitative findings. Companies that perform well, focus more on the consistency of their brand strategy and have more budget and time available for innovation. Last year’s study had a strong focus on innovation and the main lesson for marketers was to listen to the stories of consumers and use that as a starting point for innovation. Most companies that were not able to drive innovation successfully, were too focused on internal possibilities and forgot to have an outside-in view.
The role of creativity
If we look at the IPA database and learnings, we see a decline in ad effectiveness over the past years. This is confirmed by marketers who also believe that the impact of advertising is declining. However, marketers see this declining effect more as a media-related effect than a creativity related effect. For most marketers, creativity is extremely important and closely linked to the brand strategy of a company. When it comes to creativity, successful marketers believe that vision and consistency should be integrated closely alongside the brand strategy. Only if consistency is realised, creativity will become an important driver for growth. Interesting to note is that the companies that perform worse than others have more difficulties in finding the best creative strategy and rely less on the impact of creativity.
If we look at the findings of Les Binet and Mark Ritson, we see how important creativity is. Mark Ritson ranks creativity directly after the brand itself when it comes to drivers for marketing effectiveness, and states that good creative work can mean that the multiplier for growth can go up to 12, where media only has a maximum multiplier of 2.5. It shows the impact of good creative work versus bad creative work. Based on the IPA database, Les Binet came to the same conclusion. He looked at the difference between creatively awarded campaigns versus campaigns that were not creatively awarded. There was a significant difference in impact between the two.
Effect of advertising is limited
In this study, we wanted to understand the impact of creativity better and learn what marketers need to do to make sure that campaigns realise more impact than they are currently achieving. To understand the impact of creativity better, DVJ conducted a meta-analysis on the different campaigns they have analysed and measured over the past years. The findings were insightful, yet confronting. Only 20% of the campaigns were able to realise a significant advertising effect. Most campaigns that were measured and evaluated could not realise a significant impact. What does this imply, and how should we use these findings?
The first component for success is the way we use media, and the level of investments companies are willing to make. There is a lot of academic research on the influence of media investments. Les Binet has done a lot of research on existing databases and concluded that marketers should make a distinction between brand building and sales activation. Based on a lot of data he concluded that 60% of all activities should go into brand building activities. The Brand Growth Study showed that most marketers do this the other way around. 40% of activities focus on brand building, instead of the recommended 60%. Related to this are the lessons from the Ehrenberg Bass Institute where Byron Sharp recommended to stop bursting and focus on dripple and an always-on strategy. Only 1 out of 4 marketers claim that he or she follows this learning. The rest sticks to flights and campaign bursts.