Leading UK insurance brand Direct Line ended 2016 on a high after winning Gold at the Institute for Practitioners in Advertising (IPA) biennial marketing effectiveness awards. The award entry told how brand repositioning drove fundamental changes across the organization, from call centers to proposition research. The judges described it as “an extremely well-considered comeback that transformed the business from the inside out.” Ebiquity’s Nic Pietersma spoke to DLG’s Ann Constantine about this transformation and how the Group makes the most of marketing effectiveness.
NP: What role did the ROI measurement framework play in your recent award entry?
AC: It is a common misconception that the IPA Effectiveness Awards are based solely on ROI, at least in the narrow sense. Demonstrating ROI is an important part of the story, but it’s not the only factor the judges consider.
When we looked at previous winners, many report ROIs that would be unrealistic in our sector. So, we decided to adopt a broader approach. We wanted to put together a well-rounded argument that was evidence-based, demonstrated profitability, and told a compelling story about how the reboot transformed the business.
The Direct Line Fixer campaign ticked a lot of boxes. It improved brand measures like ‘Integrity,’ ‘Preference,’ and perceived ‘Quality.’ It was also successful in terms of the econometric ROI. And it was successful in terms of topline customer growth. It’s rare for campaigns that can demonstrate effectiveness across so many different types of metric.
It’s rare for campaigns that can demonstrate effectiveness across so many different types of metric – brand measures, econometric ROI, topline customer growth.
NP: What do you think is particularly strong about your effectiveness program?
AC: The key thing is that we use a range of tools to measure our marketing effectiveness. Econometrics is central, but also not the be-all and end-all. If we relied on a single approach, we’d miss the bigger picture. In addition to econometrics, we’ve used geotesting to evaluate our campaigns over the last five years, initially to cut inefficient spend from our marketing budget, but more recently we’ve use the same approach to understand how novel media initiatives work across our company’s portfolio of insurance brands
Figure 1: Testing Cycle
When it comes to direct mail and paid social, we prefer to use a ‘matchback and hold-out’ approach wherever possible, because we believe that this is best practice. I know some companies use econometrics to measure direct mail but for us this would be missing a trick, as you’re not using the right tool for the job.
Figure 2: Matchback Analysis
Call volume tracking – using tracked phone numbers – was state of the art in insurance marketing 10–20 years ago, but consumer behavior has changed and today we rely on this approach less.
Digital investment needs to wash its face in terms of cost, reach and frequency, and viewability. Ideally, we also need to demonstrate effectiveness from a test and control perspective.
We use digital tracking to plan our day-to-day digital marketing but, even so, we don’t take tracked sales at face value. Digital investment needs to wash its face in terms of cost, reach and frequency, and viewability. Ideally, we also need to demonstrate effectiveness from a test and control perspective.
NP: Those approaches seem to cover the short-term media response from every possible angle. What about the brand?
AC: Ideally, marketing should impact both. The IPA paper – and the Winston Wolf, Fixer campaign – was successful partly because it showed that there were short-term benefits in terms of quotes and sales, as well as a meaningful, longer-term shift in brand metrics.
Figure 3: Direct Line – Brand Index Quality Score (Net), from YouGov
Ironically, some of the brand health changes happened very quickly. Our YouGov net quality score jumped up after the first month of the campaign.
We also saw a holistic improvement in the Direct Line brand tracking that would be easy to miss from a narrow ROI standpoint. Statements like ‘cares for customers,’ ‘resolves claims fairly,’ and ‘is easy to deal with’ all saw major improvements after the Fixer campaign launched.
Figure 4: Direct Line brand tracking statements, before and after launch of Fixer campaign
Those shifts laid the groundwork for long-term success. Interestingly, we reported a strong above break-even ROI, which benchmarked well for this sector, but since then our estimated ROI for Direct Line has improved further’.
Understanding how brand metrics fit together and work to drive quotes and sales in the long term is an ongoing area of work for us. One of the things that we’ve found is that certain elements of brand health tend to move together in the consumer’s mind and that these collectively drive sales in the longer term.
Figure 5: Clustering of brand metrics for the Direct Line brand
In a way, they form a family tree of positive brand attributes. For example, some recent work we did with our Churchill brand highlighted how ‘Britishness’ was linked to ‘Likability’ and also how notions like ‘Efficient / Dependable / Forward Looking / Straightforward’ are all linked in the consumer’s perception of the brand.
NP: What role does customer segmentation play in your strategy?
AC: We have a portfolio of brands and, while most use mass reach media lines (TV, PPC, etc.), the brands are nevertheless differentiated in terms of their core target audience. This plays a big role in shaping creative decisions across the portfolio.
We also use segmentation in our analytic approach. Our econometric models are segmented not only in terms of channel (e.g., phone versus web transactions), but also in terms of age and risk profile, which is important in the insurance sector. This gives us a clear and granular view of what kind of customers our media investments attract and the commercial impact of this.
Segmentation gives us a clear and granular view of what kind of customers our media investments attract and the commercial impact of this.
NP: What is the role of an effectiveness professional in a modern marketing department?
AC: We strive to be seen as an internal agency that can give clear and concise opinions; we certainly don’t want to be seen as a blocker of exciting new initiatives. We work closely with marketing teams to understand the role that each media line is expected to play and which KPIs need to be tracked and understood. We have also spent the last 18 months bringing what were seen as three separate disciplines – brand research, market and competitor research, and marketing effectiveness – under one umbrella. This is unique and allows us to have a fully rounded view on performance.
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