Newsworks effectiveness summit 2017 Peter Field presentation: IPA Databank business effectiveness This study looks at the recent business effectiveness of UK print and digital newsbrands. It cannot be compared with similar studies that analyse media effectiveness across the entire global database since 1980. Peter Field analysed 108 UK cases from the IPA effectiveness awards databank, 2012-2016 (52% of all entries for this period), to look at the business effectiveness of UK newsbrands. Total cases = 84 using newsbrands, compared with 24 non-users: 57 using print 71 using digital newsbrands 44 using both print and digital newsbrands All data is based on reported “very large” business effects. The scale of a business effect is assessed by the case study author (in the compulsory questionnaire filled in by all IPA Effectiveness Awards entrants) as being ‘very large’, ‘large/substantial’ or ‘small/negligible’. In this analysis only ‘very large’ effects are included - previous analysis by Les Binet and Peter Field for IPA Datamine 2 showed there was a high correlation between very large business effects and ROI: Campaigns reporting any very large business effects reported 620% average ROI vs 390% for campaigns not reporting very large business effects The correlation between the number of very large business effects and market share gain is very strong: significant at the 99% confidence level There are five different business effects: sales, market share, price sensitivity, acquisition, loyalty and profit.

All is not well with effectiveness in general Background to the study All is not well with effectiveness in general Analysis of the IPA Databank provides dramatic evidence that some of the assumptions underlying modern marketing practice are leading to significant decreases in overall effectiveness. The move to activation-based campaigns assumes that effectiveness in the short-term leads to effectiveness in the longer term. The increase in tight targeting assumes that this is a more efficient and effective use of media expenditure than mass targeting. The use of unpaid media assumes a similar effectiveness with paid media. The focus on ROI, especially short-term, assumes that efficiency is the same as effectiveness. Peter Field provides the evidence that campaign effectiveness is falling, questions the validity of all these assumptions and makes recommendations to help reverse the trend and re-build brand health and profitability long-term.

IPA campaign effectiveness is falling The digital age was supposed to bring (among other things) increase targeting opportunities for brands and greater accountability, which in turn was supposed to create greater levels of effectiveness. The truth is that business effectiveness is in steep decline. Source: IPA Databank, 1998-2016 cases

Driven by rising short-termism An obsession with real-time dashboards and short-term measures of success has played a significant role in marketing overall becoming less effective. The number of short-term cases in the IPA Databank (less than 6 months duration) has increased from 8% in the 10 years ending 2006 to 25% in the 10 years ending 2016. Source: IPA Databank, 1998-2016 cases

The deception of short-termism Brand building Long-term sales growth Sales activation Short-term sales uplifts Short-term strategies can seem effective. But when you view them over the long term – they are revealed as highly ineffective. Although they are twice as likely to generate large short-term sales activation effects, only 3% of short-term campaigns studied generated very large market share growth. In contrast 38% campaigns of three years plus generated significant growth. Short-term effects dominate ~6 months Source: Binet & Field 2013

Short-term sales activation has been achieved at the expense of brand The focus on short term activation effects has had a an important impact on brand building effects. The longer-term health of brands is suffering at the expense of immediate response metrics. Brand building campaigns remain the most effective at delivering important long-term business effects such as customer acquisition and profit. Source: IPA Databank, 1998-2016 cases

The study findings Newsbrands are bucking the trend of declining effectiveness: 1. Print time trends 2. Multi-platform newsbrand effectiveness

Newsbrands are at a significant disadvantage in proving effectiveness Disadvantage for newsbrands Smaller overall budgets (awards skewed to big budget campaigns) Very low ESOV Short-term cases, especially print New/small brands Value/mainstream brands Less likely to be emotional Advantage for newsbrands More service sector brands Before we get into the results of the analysis, there are a few preliminary notes about the two samples of newsbrand users and non-users. Over the years Peter Field and colleagues have identified and validated key campaign characteristics that are most likely to drive effectiveness. In this analysis, the newsbrand group of cases starts out with a number of disadvantages, particularly for print. The most important is a severe ESOV disadvantage – we know that an excess share of voice when compared with market share is associated with greater campaign effectiveness. The 2012-2016 cases including newsbrands in the IPA database are also more likely to be short-term and for new, small and value brands – again these are generally less effective than longer-term cases and established big, premium brands. They are also less likely to be emotional, a long-term disadvantage. There is one efficiency advantage for newsbrands - there are more cases in the services sector – and fewer in FMCG. Given these characteristics, we are confident that the findings for newspaper brands are robust and substantial. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Measured in the short-term, print appears to be losing effectiveness over time If we only look at short-term activation effects, print seems to be losing effectiveness. Activation effects include a range of short-term responses, including direct responses, immediate short-term sales, promotional uplifts, click-throughs etc. Source: IPA Databank UK case studies 2012-2016 (52% of all cases) compares users of print to non-users, data aggregated over 6 years for robust sample sizes

Measured by long-term metrics, print is in fact becoming more effective over time Everyone knows that newspaper print circulations have declined, (though over 14 million people do still read a print edition daily, which is still a significant proportion of the UK population, especially considering much-hyped digital sites like Buzzfeed only reach 163k daily, according to NRS PADD). But does a decline in scale mean a decline in effectiveness? Clearly not. Just as growing digital numbers in themselves don’t mean heightened impact on brand business results. Overall, ad effectiveness is in decline. But this latest analysis shows that in fact, print effectiveness is growing over time across key business measures. This is also apparent for other “legacy media” – as digital media expands, TV, newspapers and the like are actually working harder in the media mix. We do need to bear in mind that increasingly print is not added without online, so the recent upwards trend could be largely due to that. Source: IPA Databank UK case studies 2012-2016 (52% of all cases) compares users of print to non-users, data aggregated over 6 years for robust sample sizes

Print is increasingly effective at delivering new customers There is often an assumption that digital channels are most appropriate for bringing in new customers, especially those trendy digital natives who apparently don’t watch, listen to or read “traditional media”. But the data shows that in fact print is increasingly effective at delivering new customers to brand advertisers. Campaigns including print were 39% more effective at delivering new customers than campaigns without print in the 6 years ending 2004. But this rose to a hefty 67% differential in the 6 years to 2016. Source: IPA Databank UK case studies 2012-2016 (52% of all cases) compares users of print to non-users, data aggregated over 6 years for robust sample sizes

Print is delivering greater market share uplifts over time Print newsbrands are highly effective at delivering market share. There is an upward trend for print to deliver very large uplifts in market share. (The risk is that, if short-termism takes an even stronger hold among advertisers and agencies, media effectiveness will be severely compromised. This is a particular concern for print newsbrands, as over a third of 2016 cases using print are already short-term) Source: IPA Databank UK case studies 2012-2016 (52% of all cases) compares users of print to non-users, data aggregated over 6 years for robust sample sizes

Campaigns using newsbrands are 36% more likely to deliver profit Multi-platform newsbrands are delivering widespread long-term business effects for brands Campaigns using newsbrands are 43% more likely to deliver market share growth Campaigns using newsbrands are more than twice as likely to deliver a reduction in price sensitivity Campaigns using newsbrands are more than twice as likely to deliver an increase in customer loyalty UK newsbrands are a powerful weapon in the battle against short-termism, because they deliver growth in very large business effects that are vital to long-term brand success. It’s not just about immediate sales at any cost. Campaigns that use newsbrands are significantly more likely to drive sustainable share growth, attracting new customers but also increasing loyalty among existing customers. They reduce price sensitivity and therefore reduce the need to rely on short-term cost-cutting promotions. This means bigger profits. One of the key contributors to short-termism has been the rise of digital, with its instant numbers and real-time trackability. But not all digital is equal. Digital newsbrands work differently – they provide the right context to drive the same powerful business effects as print does. We know from Lumen eye-tracking research that newsbrand sites attract more in-depth attention, with double the viewing time per page than non-newsbrand sites, which in turn gives 60% higher viewable time for ads and an average dwell time per ad that is 30% higher. This quality, high attention context provides a favourable environment for delivering longer-term business effects as well as sales. What’s more, UK newsbrands have a unique advantage – both print and digital platforms perform very well in delivering these important business effects, but the combination of print and digital formats provides advertisers with a very strong multiplier effect. Campaigns using newsbrands are 36% more likely to deliver profit Campaigns using newsbrands are 85% more likely to drive customer acquisition Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Multi-platform newsbrands boost the effectiveness of other media Newsbrands make TV 54% more effective Newsbrands make online video 50% more effective The updated analysis shows very clearly that newsbrands are a highly effective multiplier for other media. Not only do they drive effects such as share growth, penetration and profit in their own right, but they also make other media in the schedule perform more effectively. This is seen both with “Legacy” media such as TV, where newsbrands increase business effectiveness by 54% and with key digital media. Once again, having the quality environment of newsbrands in the mix makes other digital media work harder. There are several potential reasons for this, which we will continue to explore. But we already have strong evidence that longer attention times (Lumen eye-tracking, MOAT for WMG) plus the impact on brand perceptions of the trusted newsbrand context (The company you keep research), might prime people to respond more positively to seeing the advertising in social media, other online display etc Newsbrands make online display 24% more effective Newsbrands make social media twice as effective Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

There is a significant context effect from using digital newsbrands Adding any online display to TV increases business effectiveness by 17% + Adding digital newsbrands increases the multiplier effect by 60% + A really powerful example of the strength and difference of digital newsbrands is the impact they have in combination with TV advertising. When TV is coupled with online display on sites that are non-newsbrands the impact on business effects is much smaller than when digital newsbrands are included in the online mix. Given the issues surrounding programmatic and algorithms, there is a strong brand health case for being much more selective in digital media. This IPA databank analysis suggests that there is also a very strong business case. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

The latest data has seen a huge increase in the use of digital newsbrands without print Whereas in 2012 and 2014 the split was fairly even, in 2016 Effectiveness awards cases there was a major swing towards using digital newsbrands without any print in the campaign. This trend is worrying for advertisers, as they will be missing out on the very strong multiplier effect that comes from using newsbrands across platform in campaigns (using both print and digital newsbrands in the campaign mix delivers 3.5 times the uplift in very large business effects of using just one platform.) Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

But two are better than one: there is a significant multiplier effect from using print and digital in combination There is increasing evidence that using more than one newsbrand platform delivers more than the sum of two parts. In our 2016 multi-platform brand health study (newsworks.org.uk/effectiveness), we saw that print plus digital newsbrands produce a 3.4 times multiplier effect on brand health measures. This is almost exactly mirrored by Peter Field’s latest analysis of the business effects delivered by newsbrands. Using both print and digital newsbrands in the campaign mix delivers 3.5 times the uplift in very large business effects of using just one platform. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Two are better than one: business effects in detail There is increasing evidence that using more than one newsbrand platform delivers more than the sum of two parts. In our 2016 multi-platform brand health study (newsworks.org.uk/effectiveness), we saw that print plus digital newsbrands produce a 3.4 times multiplier effect on brand health measures. This is almost exactly mirrored by Peter Field’s latest analysis of the business effects delivered by newsbrands. Using both print and digital newsbrands in the campaign mix delivers 3.5 times the uplift in very large business effects of using just one platform.

And the multiplier effect is getting stronger Two newsbrand platforms The multiplier effect is also growing. Just looking at the last two effectiveness awards, we can see that using both print and digital more than doubles the uplift in business effects compared with campaigns who don’t use newsbrands at all. Two newsbrand platforms Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

However, short-termism affects print, whilst digital newsbrand cases buck the rise of short-termism Average 24% Analysis of the overall database clearly shows that short-term campaigns – those of less than six months duration – are less effective at delivering a range of very large business effects (and especially profit) than longer-term campaigns. Yet there is a tendency towards short-termism. Over a third of recent campaigns that include print newsbrands are short-term. This is short-sighted, as it is really under-utilising the power of print, which is most effective and efficient at delivering long-term business effects such as profit. More encouragingly, campaigns that use digital newsbrands are much more likely to be longer term, which will help optimise business effectiveness. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Despite the focus on short-termism, print newsbrands still deliver long-term effects Campaigns including print newsbrands are particularly successful at delivering increases in customer acquisition, loyalty and profit. They also deliver increases in market share – but the increase in the proportion of short-term campaigns using print in 2016 means that this advantage is perhaps not being fully exploited by advertisers and their agencies. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Digital newsbrands deliver both short and long-term effects Campaigns that include digital newsbrands deliver widespread increases in business effects. The increased use of digital newsbrands for longer-term campaigns in 2016 has helped to exploit their effectiveness. Source: IPA Databank UK case studies 2012-2016 (52% of all cases)

Conclusions The danger of short-termism is that it focuses on immediate sales without protecting the long-term health of the brand A more balanced approach is required for maximum business effectiveness and ongoing brand value Campaigns using newsbrands are just as likely to deliver sales over all periods as campaigns that don’t use newsbrands But the difference is that adding newsbrands to a campaign means it is significantly more likely to deliver long-term business benefits such as market share growth, customer acquisition and loyalty, protection of price premium and profit Newsbrands improve the business effectiveness of a raft of other media, including TV, online display and video and social media One of the simplest ways to improve the business effectiveness of online digital display is to include digital newsbrands: their quality environment drives profits, not just clicks Thank You Source: IPA Databank UK case studies 2012-2016 (52% of all cases)