Alex Murrell: Edition #009
Welcome
Welcome to Edition #009 of Strategy Made Simple.
This newsletter captures the best of what I’ve written, recorded and read since the last issue came out.
Enjoy.
Articles
I’ve published a new article titled, ‘Thinking rationally about emotion’.
Here’s a quick TLDR:
In advertising, using emotion is entirely logical. Creative agencies have made this case consistently. But in 2013 Les Binet and Peter Field bought some much-needed data to the discussion. In their seminal report, The Long and The Short of It, the duo analysed 30 years of IPA effectiveness award submissions. The study found that emotional campaigns outperformed rational campaigns on every brand and business metrics that had been measured. But why is this? This article aims to answer this seeming simple question. It argues that emotional, brand-building communications are more effective because they attract more attention, create stronger memories and are more likely to be shared.
Thank you to everyone who has read, liked and commented on the article already.
Past articles
For the newcomers, here are a few of my previous pieces:
The Pitfalls of Purpose: This article argues that successful brand purposes avoid three pitfalls. They build a purpose on a role their product actually performs, they treat culturally important subjects with sensitivity and they align all of their brand’s actions.
Adland is Island: This article argues that marketers are nothing like the consumers they serve. We have different demographics, attitudes and personalities.We consume different media and consume it on different devices. We spend our working lives differently, our downtime differently and we shop at different stores.
What’s the big idea?: Despite its ubiquitous use, the ‘big idea’ remains incredibly ill-defined. This article is an attempt to change that. It argues that ‘big ideas’ are ‘big’ because they spread in three directions. They go long, spreading across campaigns. They go wide, spreading across channels. And they go far, spreading across countries.
There are now a total of fourteen articles available, for free on my site.
Summaries
Since publishing the last edition of the newsletter I’ve summarised two books:
In total, you can now find 29 book summaries on my website, each of them no more than a two minute read.
Keep an eye on Twitter or LinkedIn for the next summary.
Links
Here’s five of the best things I’ve read over the last few months.
Businesses that spend more on advertising get the good outcome
Dr. Grace Kite of Magic Numbers shared a slide at Effworks Global 2023 featuring an analysis of 40 econometric FMCG case studies that found higher advertising spend correlates with reduced price sensitivity. Put another way, the more a company spends on advertising, the more people are willing to spend on it. Big thank you to Grace for sending me the slide!
Campaign wearout is rare
Analytic Partners tested over 50K campaigns for wearout and found only 14 that had. In other words only 0.03% of campaigns become less effective over time. The truth is brands and agencies get bored of campaigns way before consumers do. If you have a campaign that is performing well the best move is almost always to run it for longer. For a related read, see the System 1 research covered in Edition #008 of this newsletter.
Penetration and churn are inversely correlated
Kantar shared data from the video streaming category that found the more subscribers a service had, the lower its churn was. We’ve known for a while that purchase frequency is a function of penetration. This data indicates that the same might be the case for defection rates. The usual caveats apply though. It would be good to see this law-like pattern tested in multiple categories and multiple countries. I’m sure Ehrenberg-Bass have already done this.
Positive ESOV is strongly linked to a raft of long term success metrics
Data from the ‘Australian Advertising Effectiveness Rules’ report found that brands who had an excess share of voice of 5% or more outperformed the ACA’s Effectiveness Database averages on a host of metrics, including long-term market share growth, short-term sales response, strengthening pricing, new customer acquisition, customer retention and brand profit growth. ESOV, for those who haven’t come across it before, is the difference between your share of voice (SOV) and your share of market (SOM). So… a simple way to improve your effectiveness is to increase your media budget.
The revenue / equity cycle
By investing in a brand’s equity, you should improve its revenue, which means you can increase your investment in equity. It is a virtuous cycle. It compounds. The opposite is also true. Under-investment can harm your brand equity and reduce your revenues, which can lead to investments being cut. It’s a slippery slope. A downward spiral. Quite obvious, but quite often ignored. Really well put in this post from Invencion.
Archive
If you’d like to go back and read previous editions of this newsletter, the first eight can be found below:
Over and out
Thank you again for subscribing to this newsletter. If you enjoyed the edition, feel free to share it with anyone who may find it valuable. You can also follow me on social to get more frequent updates. All the links can be found on my website.
As always, please do let me know if you have any feedback. I always love to hear from you.
Until next time,
Alex