Last week, Volvo marketing GM Julie Bradshaw, AANA chief executive John Broome and KPMG partner, Sudeep Gohil joined Brand Traction’s Jon Bradshaw for a discussion on the fundamentals of marketing science, how the brain makes choices and how brands grow.

The conversation was spurred by Bradshaw’s When Great Minds Think Alike, a white paper that distills the key tenets of marketing theory into a 30-minute read.

From Kahneman, Sharp, Binet and Field right through to Goldenberg, Mazursky, and Solomon, Bradshaw says he found some “universal truths” that if correctly applied, should enable marketers to shift more goods – rather than continually try to reinvent the wheel.

This week the panel dives deeper into enhanced share of voice, attention, and why not all reach is created equal. Next week in part three, they will take on the importance of creative – the magic – without which the science is rendered useless.

ESOV: Spend more, grow more

The kernel of Binet and Field’s The Long and the Short of It, and their broader work, says Bradshaw, is that brands that spend above their market share achieve higher growth than those that do not. And they do that by spending on reach – going hard and long on brand and casting the net wide.

Sounds like common sense, essentially, ‘advertising works’, and AANA CEO John Broome says that excess share of voice - the ESOV approach - is accepted wisdom for big FMCG brands. “I applied [that principle] for many, many years through very stable brands that I was lucky enough to manage,” says Broome.

He says it is harder for smaller brands to throw money at reach: “You just simply don’t have the access to the financial resources to actually put it into practice.” However, he says there are “plenty of examples of small brands punching well above their weight and growing and succeeding.  So I think [the ESOV principle] may not be a law but it’s certainly an industry rule of thumb.”

Finance directors are buying this

Outside of FMCG, however, ESOV is not necessarily accepted wisdom. Volvo marketing director Julie Hutchinson says it’s a novel approach for the carmaker – and something she is testing for the first time in 2020.

“I’m deploying it at the moment. We haven’t had final budget approvals yet, but I was advised last year that budgets would be flat, don’t expect any additional money,” explains Hutchinson.

“It’s part of the game, I understand that. So I thought, how do I get more? How do I make sure? When I looked at ESOV, which quite frankly I only discovered last year, it seemed to make such sense to me that I thought I’ll give it a shot,” she says.

“I went out to the regional directors and CFO and said, ‘This is the logic I want to apply’. We did have excess share of voice, but not enough based on our ambitions to grow, at the rate that we want to grow.  So it’s in the works.”

The directors hadn’t heard of ESOV either, but it was “really well received”, says Hutchinson. As a result, she will get a bigger 2020 budget.

“They said, ‘This is what we’d like to see more of’.  So it goes to show that when you’re told you can’t have something, it’s worth looking for a case, if you really believe in it, to push harder and to ask for more.”

Not the only game in town

The ESOV principle may be gaining traction, but KPMG partner Sudeep Gohil cautions that it is not a magic bullet.  All rules are subject to challenge in such a fluid consumer environment, he says.

“You can grow brands in multiple ways. I’m not talking about just putting money into digital or into another type of medium. I think there are multiple approaches because consumers behave in very different ways,” says Gohil.

“We don’t sit around, unfortunately, waiting to see ads to decide what products to buy. I totally recognise that it’s easy for us to talk about the exceptions rather than the rule. But it feels like those rules we are talking about are changing pretty rapidly.”

That caveat noted, Gohil says ESOV feels both “mathematically and intuitively right”. But Jon Bradshaw agrees – Binet and Field’s study has a narrow focus.

“The Long and the Short of It is an advertising study and therefore these are rules of advertising,” says Bradshaw. “There are other ways of driving penetration and consumer growth for a brand beyond advertising, physical availability being the most obvious one.  If you put yourself in more stores and more places, if you’re more easily discoverable on the internet than your competitor, these things will work to drive penetration as well as advertising.  So, it is possible to have low ESOV and still have brand growth.”

For larger brands, however, ESOV is proven, reiterates the AANA’s Broome, and marketers should trust its principles rather than try to continually reinvent the wheel.

“My experience at Kellogg’s is that it [ESOV] was right – and once you have developed a success model for a brand, don’t walk away from it. If it isn’t broken, don’t fix it.” says Broome. “But of course, the temptation for any marketer coming in to lead a team is to make their mark. And it takes tremendous discipline to respect the fact that this brand that you are managing is going to be around for a lot longer than you are.”

ESOV: Got the money?

As Broome points out, the challenge with ESOV is that it requires brands to spend more money. While Volvo may be an exception in backing Hutchinson with increased budget, other finance and procurement departments tend to push the other way.

Meanwhile, the marketing budget is usually “set through a P&L and it’s not necessarily directly linked mathematically to a market share objective or a volume target” says Broome.

Bradshaw thinks zero-based budgeting could solve the conundrum. Zero-based budgeting is a system developed in the ‘70s whereby all expenditure has to be justified and sanctioned for each new period. Proponents says it does away with working on the basis of ‘last year’s budget plus or minus five per cent’. Detractors say it is a time consuming, overly bureaucratic process that leads to people padding costs for fear of losing out.

Bradshaw acknowledges that it is perhaps a theoretical rather than practical solution.

“[Zero-based budgeting] should be the aspiration, but having tried to do it multiple times, it’s very hard even with Kellogg’s or Unilever’s sophisticated data,” says Bradshaw. “Never mind those who don’t have that level of investment in analytics and data.”

Are you properly paying attention?

Understanding the economics of attention is critical to maximising return on investment.  The ongoing challenge for marketers is how to evaluate and compare channels that promise audience attention and engagement and to understand their relationship, cost-wise, to reach.

While media owners extoll the virtues of their channel, those claiming higher attention rates than others are often making questionable claims, says Bradshaw. Some channels may appear cheap on a reach basis, but will prove otherwise if they only deliver a fraction of the attention of other ‘more expensive’ channels on simple cost per thousand terms, he warns.

Broome elaborates, pointing to the work of Professor Karen Nelson Field, which he says boils down to “all reach is not created equal.”

That means “marketers have to be very careful with how they put their media mix together and understand the respective attention delivery of each channel that they’re using,” says Broome.

“Unfortunately, the situation is confusing for marketers because we’ve got channels competing with each other, not necessarily giving us equal access to the same measurement systems to be able to actually make informed decisions.”

But Broome thinks that may be starting to change.

“Globally now, there’s a big conversation around cross channel media audience measurement which will level the playing field once that’s introduced. But right now, yes, I think marketers need to pay attention, to [question] what is the attention performance of the channel that they’re using.”

Hedge your bets

Hutchinson suggests a multichannel approach hedges all bets – and she aims to secure best value across the lot by committing early and securing preferential rates.

“I try as much as possible to take that long-term view, [allocating budget] about 70-30 brand versus tactical.  And then for that brand layer, I lock it down as much as possible for the 12 months. So, I’ll do a deal with the networks on TV and then likewise on channels such as out-of-home,” says Hutchinson. “Multichannel works incredibly well, the data tells us the more channels, the better [the outcome].”

While Volvo will “play the spots” closer to airtime, locking in multichannel value early is key, says Hutchinson, even if she is not entirely sure what her message will be later in the year. That way, “I know I’m probably going to get the best placements rather than planning it a couple, even twelve weeks in advance.”

In allocating channel mix, Bradshaw says the simple takeout on that aspect within When Great Minds Think Alike, is: “Don’t compare cost per thousand between channels without thinking about attention.  If that’s all you do, that’s a great takeout from there.  Beyond that, it all gets really quite complicated.”

Judge me by my size do you?

One of Karen Nelson-Field’s key findings is that screen size – and the size of the ad within the screen – matters when it comes to grabbing attention.

Volvo’s Hutchinson agrees with that principle. She says that larger traditional formats tend to work best for Volvo – but feels that view is at odds with marketing’s current consensus.

“I have to say, I feel like a dinosaur most of the time when I’m speaking to people and I say I want TV or I want out-of-home.  They look at me and they think, ‘are you serious?’  Even in dialogues with peers, TV is a little bit ‘old school’ in some ways,” says Hutchinson.

“But you’ve got to look at the effectiveness. Channels all have different catalytic effects, but I would say that the data shows that TV definitely has a great impact.  When you pair that with other channels as well, those impacts are even greater,” says Hutchinson.

“So look at the channels and make sure that you don’t just get sold what’s hot and what’s new. Because some of those channels that have been around a long time still have proven results.”

Why are digital giants buying traditional ads?

Reiterating that all reach is not born equal, Broome points out that even the digital pure players acknowledge that their native channels are under delivering.

“If I was a manager of a traditional brand, one of the questions I would be asking myself is why are digital play brands like Hipages and Uber investing so much in TV, outdoor, print and so forth?” says Broome.

Bradshaw adds that Uber Eats is littering his letterbox “more than any other brand”.

Yet despite the proven principles of ESOV, bombarding as many people as possible will only get brands so far – and risks becoming counterproductive.

Success is all about getting the right message in front of as many people as possible at the right time, which is where creative and channel planning are key. That's the focus of Bradshaw, Broome, Gohil and Hutchinson's discussion in next week’s podcast. Be sure to tune in.

Jon Bradshaw read a shedload of marketing science books so you don’t have to. Get the white paper, When Great Minds Think Alike, by emailing info@brandtraction.com.au