Bending the rules: Making share of voice work harder to grow fast.
Published on November 2, 2020
“Learn the rules like a pro, so you can break them like an artist."
- Pablo Picasso
Against the backdrop of a turbulent few months and almost certain recession ahead, brand growth – and rapid growth at that – will be essential for many businesses to survive.
The good news is, that for many, there’s never been a better time to respond. Consumers are receptive to change, media affordability is strong.
We’re told by both Nielson* and the IPA** that brands that can maintain a greater share of voice than their share of market will grow. This means that if you want to grow fast, you have to overinvest. Easy.
But before you throw a truck load of money at increasing your share of voice (assuming you have a truckload going spare in the first place), let’s look at how the rules of share of voice can be bent to enable brands to grow faster.
Let’s start with the rule of excess share of voice.
“The critical metric that determines the level of a brand’s market share growth is its excess share of voice, defined as share of voice minus share of market.”
- How Share of Voice Wins Market Share: New Findings From Nielsen And The IPA Databank | IPA
This means that if you underinvest, you will lose market share.
Handily, research company Nielson has suggested a good rule of thumb for the amount of growth that brands can expect from their excess share of voice.
They found that an average of 0.5% points of share growth can be expected per 10% points of excess share of voice (ESoV). This has become known as the “10:0.5 ratio”.1
- Budgeting for the upturn: Does Share of voice Matter? | Nielson
As an example, a brand with a market share of 10.5% and ESoV of 10% points would expect to grow over a year to 11%.
But the 10:0.5 ratio rule isn’t the whole story. Nielson** investigated over 100 FMCG Category brands’ share of voice and whilst the average correlation is the 10:0.5 ratio, the levels of growth achieved vary according to brand size.
Large brands (those with more than 10% of market share) get around 2.5 times greater return from excess share of voice. Put plainly, for every £2.50 a small brand spends on media, large brands need only spend £1.00.
Advantage big brands and deep pockets. Market share can be bought.
THE CASE FOR CREATIVITY
However, buying market share is costly and inefficient. It is creativity that gives the real unfair advantage.
“If my objective was purely market share, I could just pull up a truckload of money and lend it to people at extremely low rates and favourable terms. We don’t have good rates or favourable terms – so we need marketing and creativity.”
- A misquoted Marketing Director from a ‘Big-Four’ UK Bank
In Binet and Field’s analysis of over 900 effectiveness case studies** they prove the case for accelerating growth with creativity.
They analysed the results from 46 global creative awards to see how campaigns that were creatively awarded compared to those that weren’t.
The results were startling. Creatively awarded campaigns artificially increase excess share of voice for a brand by an average of 10 times.
Creativity increases the average 10:0.5 ratio, to a 10:5 ratio. A massive 5% points of market share growth per 10% points of excess share of voice.
If you were the small brand from the previous example this turns the tables, and for every £1.00 spent promoting a creatively award worthy campaign, the big brands would need to spend £3.30 for a creatively average campaign.
McCann has a saying: “Creativity is the only way to survive” and it would appear that it’s true, especially if you are a brand that needs to grow fast.
Creativity is not a superficial nice to have, it is a proven, essential factor in driving business growth, but there is still some dispute over how put this creativity to use.
BRAND BUILDING vs ACTIVATION
Somewhat paradoxically to the activation vogue of the day, the evidence from specific studies by Binet and Field**** suggests that brand building and share of voice matter more than ever.
With the internet removing many barriers to entry for new entrants to the market and the overwhelming amount activation happening online, a strong brand is often the only way to ensure customers buy your brand over others, and to accelerate growth.
But it is categorically not all about spend. Brands with low share of voice, who underspend on brand building don’t have enough equity to make their activation effective. Conversely, brands that underspend on activation have enormously strong brands yet fail to exploit them efficiently.
Helpfully, they have suggested a rule for thumb for the ideal mix – the 60:40 rule.
“Our analysis suggested that the optimum balance is achieved when firms
spend around 60% on brand, and around 40% on activation.”
- Binet & Field - Media in Focus | Marketing Effectiveness in the Digital Era
The IPA databank data is clear on this – whilst there are reasons to overspend on activation (new brands with innovative propositions for example)***** excess deviation from the 60:40 rule will result in growth penalties for a brand not adhering to it.****
BENDING THE RULES
This combined insight gives us some very clear advice about how the rules of share of voice can be bent to grow faster.
- Excess share of voice is still important for growth – no matter how clever your marketing approach, you must outspend your market share to grow
- Creativity is essential for accelerating growth – especially for smaller brands. Apart from optimum spend thresholds it is the biggest driver of business results from marketing
- A single marketing approach will eventually hamper growth – use approximately 60% brand building and 40% activation for the best results in short-term efficiency and long-term effectiveness.
The rules exist for a reason, but like Picasso, to make them really sing, you need to add some art.
Ringo Moss is Managing Partner – Strategy, at McCann Demand.
*. Nielson, Budgeting for the Upturn – Does Share of Voice Matter?
**. IPA, The Long and The Short of It
***. IPA, How Share Of Voice Wins Market Share -New Findings From Nielsen And The IPA Databank
****. IPA, Media in Focus - Marketing Effectiveness in the Digital Era
*****. IPA, Effectiveness In Context – A manual for brand building