Mark Ritson talks the power of radio advertising and why marketing science is ‘shit’
Professor Mark Ritson doesn’t believe in scientific marketing. Thinks it’s “shit.” Which makes him an interesting choice to present a study that posits a rather scientific equation: that a simple 11% investment in radio advertising can double a campaign’s impact.
Well, it’s not quite that simple. There are caveats. But it leans on the only piece of scientific marketing that Professor Ritson, roundly considered one of the world’s leading marketing educators, thinks holds water: ESOV, or ‘excess share of voice’.
ESOV was identified by academic John Philip Jones in 1990, and basically posits that when a brand’s share of voice (percentage of ad spend within a category) exceeds its share of market, then the latter will grow at a reasonably predictable degree.
Generally, for every 10% ESOV, a brand should grow its market share by 0.5%, annually. Brands with a smaller market share need to spend more to grow at that rate, while the dominant players can afford to ease off the advertising and maintain their market share.
Ritson used brands who already have an excess share of voice as a control of sort when testing his theory on radio advertising.
The science is simple, it seems. Allocate 11% of your marketing budget to radio advertising, and the entire campaign’s effectiveness will double.
Ritson says he had this hunch about radio’s outsized impact for some time, and teamed with marketing effectiveness expert Rob Brittain to analyse the Advertising Council of Australia’s Effectiveness Database to see exactly how much value radio can add to a campaign’s effectiveness.
He found that brand impact is 13% higher in campaigns that incorporated radio in its spend. He found that allocating 11% of your overall budget to radio appears to be the sweet spot for maximum impact. The results were so definitive, Ritson claims, that he actually wished the impact was more modest so the science seemed more sound. Especially as the research was funded by Commercial Radio & Audio, and presented at a CRA conference.
As noted: there are caveats.
Ritson admits the sample size used in this study is far too small for peer review, and the fact the study was all Effie Award entries means these were considered an agency’s finest, most-successful efforts. So, none of these campaigns were considered failures. They probably would have succeeded without a radio element. Indeed, many did, but less impressively so. For someone who thinks marketing science is rubbish, Ritson seems excited by the results.
After presenting the findings at CRA’s HEARD 2024 conference last week, Ritson sat down to talk advertising and radio with Mumbrella.
I was interested to hear that you said you don’t really believe in marketing principles or laws.
I don’t believe in scientific marketing, no.
And, why is that?
We forget our history in marketing. So, we’ve been having a debate about whether marketing is science for about 50 years. And the recurring answer is ‘no’. Marketing science, and the idea that we can have these little ‘principles’ works at a very, very, abstract, rough level. ESOV is a good example.
But, the nature of marketing means it’s reflexive, it deals with human behaviour. It’s not geology. It’s not physics, so there are some principles, but they’re principles for bending.
The problem I have more, as an educator, is when we say ‘scientific marketing’, marketers freeze up and now think everything has to be so precise. And it’s clearly not that precise, you know? We have to remember that, too. I mean, the closest I get to a scientific law of marketing is ESOV. I’m less persuaded by other elements of the marketing science literature.
So, is it just that ESOV has been proven time and time again to work?
Yeah. I mean, it depends how rigorous you want your science to be. Again, the point is when Ehrenberg-Bass [Institute for Marketing Science] has published a paper in the Journal of Advertising Research, saying, basically, ‘we accept the share of voice/share of market principle’, that’s a pretty impressive thing, because they’re not fans of other people’s theories. That’s a big badge, right? Because they are very, very data-driven. And when they’re publishing stuff supporting ESOV, that’s kind of the ultimate. And to be fair, it’s been floating around a long time, it’s not perfect, obviously, but none of these laws are.
You mentioned that, at the top of the ESOV graph, it’s not just a straight 45-degree rise, you can do less to maintain a larger share.
Yeah. You can do less, is the point. It varies, obviously, per industry. There’s work Data2Decisions and Paul Dyson do, there’s a famous league table where Dyson looks at what are the biggest drivers of advertising’s profitability. And the biggest one, by a country mile, is how big the brand is doing the advertising. It’s a massive, unfair advantage! And, it’s just reflecting that in the curve: that if you have a 20% share of a market, you don’t need 20% of the share of voice to maintain it – it can be 15%, and you’ll be fine.
And how low could a brand take it? Theoretically, could Coca Cola just stop advertising?
Not forever. I mean, again, Ehrenberg-Bass have done good work on what happens in the short-term, and the first year, it’s surprisingly stable, even in fast-moving categories. But within two or three years, things really drop off substantially. And the problem is it’s another two or three years to rebuild it again.
So maintaining it is the answer. But each category has a slightly different curve. The reality is bigger brands, so Unilever brands, the Diageo brands, are pretty clear on the level they need to maintain share, remembering that most ad spend for most brands is maintenance. We don’t say that enough. Now, everyone wants to grow. But, a lot of brands are quite happy maintaining things as they pretty much are, you know, and that where ESOV is very useful.
I’ve used it my whole career. Clients who come in with unreasonable, unrealistic expectations of growth, but aren’t prepared to invest the money in comms, you say to them, ‘it might work out, but it’s highly unlikely that it will, you’re not bringing enough money to the table.’
I suppose Krispy Kreme is one that they always use as an example.
You’ve got it! But they do [advertise] now. I’ve got a mate who calls it ‘the casino’. There’s always a couple of brands who win at the casino of organic, below the line, non-invested media, right? And they get big organically. But for every one of them, there’s 99 who fuck themselves, because they didn’t invest enough in principles like ESOV.
We only talk about the breakers, we don’t refer to the other 99 on the line. And, that’s a real problem.
So, you make the point that radio advertising is often overlooked because of the way it works — it’s non-visual, for a start, and often more integrated into a broadcast. But is the fact that radio has an outsized impact, but nobody realises, a feature of the medium, or a flaw?
I think that’s the complexity of all of this, right? So, what I was subtly trying to communicate, and it wraps you up in a real bundle of complexity, is that radio makes other media look good — and, as a result, no-one realises radio works as a medium. That’s the crux of my argument: a small amount of radio really makes everything else work better. But, as a result, no one in the industry knows that, because they look at a piece of digital video sponsorship [mocks being impressed] you know? And radio is kind of comfortable with that. They’re not a big-booted operation. And, I think that that was the whole crux of my original interest in doing this. I have this hypothesis — I’ve said it for years to clients — radio is a great sidekick.
Is there a ceiling? Let’s say someone did put 80%, 90% of their budget into radio? Where would they start to see it fall off?
If we talked about an S curve, there are three lessons from the S curve of a channel, right? The first is, if you’re way down the bottom of the S, you can double and triple your investment, and you won’t see much impact, because you’re not reaching that sweet spot in the middle.
But to your point, at some point, when you get above that sweet spot, you see some returns, but the returns really do diminish. And at some point, the lesson is: move on to other media and reach the sweet spot there.
You know, 11%, frankly, is the average of all the successful campaigns. But, there is a point with any media where you can overspend on it. And the message is: you need to move on. I think it’s fair to say, for radio, they don’t suffer from that overspend very frequently [laughs]. There are certainly other brands, and other media, that have that problem.
For radio, it’s more just how can we get more brands to put in 11%.
And with that in mind, this 11% they’re not spending, they have to get it from somewhere. Where do you think people are overspending?
It’s a good question. It depends, right? Generally, most clients have a favourite child.
We don’t use this term enough anymore: ‘media neutrality’. It’s a very ’90s term, but media neutrality, its core principle is no favourite children. In fact, be suspicious of all your children, and don’t have any emotional reliance on any of them. So, you go into zero-based budgeting, right? Start each year without any pre-allocation, start each year without any favorite children, look upon all of your children as equal, and then build the campaign from that.
So, I think, there are clients that are still wedded to TV, too much, perhaps. There are certainly clients that are too wedded to digital media. And I think each has a favourite child. And what’s great about radio is, I don’t think there is any client in the universe that would suggest that radio is their favourite.
And radio doesn’t mind that. It likes to be the third child.
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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A smart combination of digital and print assets are key for cut through, particularly in the regional sector. Not sure about this radio theory.
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It amazes me that, after all this time, this gentleman’s foul mouth still fascinates Australian marketers.
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There are some brands with radio as their favourite child – Frank Walker from National Tiles for one !
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11% to double your effectiveness is the sort of random soundbite that the industry loves, especially when delivered by a credible frontman.
Graph 2 poses more questions than answers. Brand profit growth is the metric here to focus on … 1-2% percentage points higher max (and that is growth, not margin), long term market share growth seems lower for radio inclusive campaigns, short term growth has no difference … but then ‘retention’ is 3x the size so is acquisition.
If retention and aquisition are so much higher how come short term growth, long term growth, and profit growth are either negative or flat??
Asking on behalf of media agency ppl who will now be asked why radio isn’t 11% because Mark told them so. (and they don’t want him to name call them or say they’re sh*t/f*cked/terrible marketers even tho they did his course) [edited]
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How does this equate with the growth in on demand audio? I know under 25yo’s who never listen to radio. Are podcasts and Spotify in the same category?
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