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Ad Council’s new report warns brands about buying digital based on impressions

Advertising Council Australia (ACA) has launched a new report on Australian advertising effectiveness, diving into the importance of ensuring ‘extra share of voice’ (EOSV) for advertisers and brands.

The report, released by the ACA and created with ad executives Robert Brittain and Peter Field, as well as media science researcher Professor Karen Nelson-Field, found that brands which ensure ESOV find it drives stronger pricing effects and customer acquisition.

The findings of the report were presented at the ACA’s ‘To ESOV and Beyond’ virtual event, presented in partnership with ThinkTV.

In his introduction, Field told those who had virtually dialled-in that despite brand marketing being a strong priority before COVID, that the pandemic has created “bad habits” among advertisers.

Advertisers have shifted away from brand advertising towards performance marketing,” he said, which is a behaviour that needs to be corrected.

 

Campaigns with positive ESOV [click to enlarge]

Brittain spoke of the importance of ESOV, which is achieved for brands when share of voice is higher than share of market. “ESOV is achievable for a brand of any size,” he said.

The report’s other findings included that building mental availability is key to brand growth, that ESOV is a powerful methodology for determining a brand’s media budget and is linked to mental availability, and that ESOV is more important to campaign effectiveness than absolute media investment.

Additionally, ESOV showed a strong link with pricing sensitivity effects.

Brittain said many brands are “underinvesting in brand building”, which should be a high priority for achieving higher ESOV.

He said the report was clear proof that advertising should be treated as a growth lever, not just a cost.  “To our knowledge, this is the first time that broader analysis of ESOV has been published and the results are significant,” he said.

“Our analysis shows that brands with a positive ESOV… were able to strengthen pricing and acquire more new customers.

“ESOV is therefore a critical planning metric that all marketers should be using to capitalise on the economic recovery and regain pre-recession levels of sales and profitability.

“Advertising is critical to this and planning marketing budgets using the ESOV approach will put businesses in a good position to drive both sales growth and margin expansion. Quite simply, the business case for treating advertising as a growth lever and not just a cost to the business has never been clearer.”

The report found that there are some inherent threats to ESOV, including that share of voice is getting more difficult to measure, an increasingly dysfunctional media marketplace, that creative strength can be a factor, and that share of search is not a replacement for share of voice.

The link between ESOV and mental availability [click to enlarge]

Professor Nelson-Field told brands to be mindful about share share of voice because “you might be getting less share of voice than you think”.

Reasons for this, she explained, were linked to “overspending on low attention platforms and underspending on high attention platforms”, something that leads to “brand decline”.

You could be getting less SOV on the same media budget. Inequity in platform performance impacts budgeting planning because equitable impressions are at the core of planning success,” Nelson-Field added.

Field re-iterated the points, drawing attention to “the growing problem of how investment across competing video advertising channels should be balanced: impacts are not equal. All marketers need to know this”.

The report, he added, is “an invaluable playbook for recovery, providing the evidence marketers need to build the case for brand advertising,” he said.

The key takeaways from the presentation were surmised by Field afterwards, and he finished by warning brands to be wary of being sold on an impressions basis.

A lot of money out there is chasing unknown levels of attention – particularly into digital platforms and impressions, with very little know about what those impressions are worth.”

Advertising Council Australia CEO, Tony Hale, added: “Utilising ACA’s Effectiveness Database has meant that we have been able to provide further insights into the vital role ESOV can play in achieving mental availability and market growth, and the challenges this powerful methodology faces today.

“There is no doubt that this report will generate reverberations around the globe as marketing analysts consider the implications and how they should be applied to develop more effective campaigns in an increasingly complicated media and creative landscape,” he said.

The report is now available to download from the ACA website.

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