Head of Ebiquity’s International Effectiveness Group, Mike Campbell, highlights the enduring role of TV advertising in building and sustaining FMCG brands.
Media agency advice to shift investment from TV to digital and social media in order to reach today’s audiences – particularly younger, so called millennial consumers – is putting the long term health and media performance of many FMCG brands at risk. Econometric evidence suggests that, while digital and social can be important components of media plans – particularly those targeting younger consumers – to use these channels as the main route to promote FMCG products threatens to undo years of brand building and brand equity development. TV is much more effective, and it also continues to attract older, often economically powerful demographics, too.
TV builds brands
Traditionally, FMCG brands have built and sustained their success using TV led strategies. But FMCG clients spending time with media agencies in recent years could be forgiven for thinking the rules of brand building have changed fundamentally, particularly since the advent of digital and social media channels. Many media agencies routinely recommend that brands switch out of TV and into digital, often with suspiciously round and large percentages of their budgets moving across. And for those managing brands whose target audience includes the apparently elusive millennial audience, the call to replace increasing swathes of TV with digital is even louder.
Chasing the millennial dollar, Euro, and pound
The argument put forward by media agencies is that millennials’ consumption of TV – particularly linear TV, watched at time of broadcast – is shrinking to the extent that it’s hardly worth brands using TV at all to address this audience. They’re spending all their time online, so the agencies say, and budgets should follow – and to some extent anticipate – consumer behavior in and around media. And while it is true that half of 16-24s total daily viewing time of 4h14m is not live TV and includes streamed content such as YouTube, nearly three quarters of their viewing IS TV, either live (50 percent), recorded on PVR (16 percent), or on demand (7 percent).
So younger consumers are still watching TV, including live TV. Media agencies’ motivations for hastening the rush into digital are at least twofold. First, they don’t want their clients to be miss out on the opportunity to interact with younger consumers in the media they use. They want their clients – and their media buys – to be modern and up with the times and technology. Second, they can and do obtain significantly higher commission and margins on digital media, where the transaction chains are more opaque and unregulated than traditional channels such as TV.
What drives brand performance on TV
At Ebiquity, our econometric benchmarks show that brands that outperform the market are those that use creative executions on TV that help to reinforce memory structures.
Brands like KitKat with continuity of slogan on TV – “Have a break, have a KitKat”. Time and again, campaigns for KitKat that use the slogan outperform those that don’t.
Brands like Frito-Lays’ Walkers with continuity of celebrity endorsement on TV – Gary Lineker. This example shows how well masterbranding can work across a family of sub-brands. Instant recognition drives sales on sub-brands – new flavors or variants – and the house style ensures that the effect will be seen across associated brands. The ROI of the launch of Walkers’ Sensations was far from break-even on the new product line. The vast majority of the sales impact was on the masterbrand.
Brands like Elvive, with long term continuity of look and feel and formula.
And brands like Intel with continuity of sonic elements.
High recognition – driven by continuity of slogans, celebrities, look and feel, and sonic elements – in pre-test advertising scores links subsequently to higher ROI. Continuity of style links to strong TV performance. But where creative is incoherent or incompatible with established creative devices, the ROI can be ten times lower than highly effective creative on leading brands.
The temptation, when taking an established FMCG brand in a new direction on a new channel and with a new campaign, is to reinvent the wheel, to develop a creative route which either puts forward new brand assets for digital only, or adapts them to such an extent that they’re neither recognizable nor visible to the target market. Our recent experience has shown us that, if you use established brand assets and/or house ad styling on digital and social platforms, they work harder for brands.
TV brings certainty to a world of flux
The media environment is currently so volatile that many advertisers find it difficult to know whom to believe about where they should invest hard fought media budgets. Because digital and social channels are new, because younger, millennial consumers use them more than older consumers, and because they’re consuming less linear TV live, many media agencies are recommending advertisers shift out of TV and into digital.
All the evidence we have seen suggests that the rate of change in recent years has been far too quick. Those FMCG brands that have switched too much money too fast are failing to address their total available audience and are experiencing leaky bucket syndrome, with customers falling away quicker than they can be replaced. They acted first rather than opting to test and learn.
We’re not advocating brands don’t invest in digital and social. But we are suggesting that advertisers use the tools and techniques of econometrics to build the best media plans which deliver optimal ROI. Putting all – or too many – of your eggs in the digital basket too quickly, coupled with abandoning TV too fast, erodes what all of your consumers know and think about your brands. And it will make them vulnerable to the appeals made by competitive brands who have taken a more considered, evidence based approach to their media planning.
Mike Campbell has written a comprehensive Viewpoint paper on this topic, including case studies from diverse FMCG products. The paper is available to download from http://www.ebiquity.com/en/resources/publications-reports
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