With marketing budgets under increasing pressure, it is more important than ever to ensure that precious investment will lead to profit. New evidence from Kantar and WARC shows the important role creative quality can play in driving ROI.
We know that brands can ‘go dark’ for a short time without causing too much harm, but longer periods off-air can be damaging. And once the decline in your brand’s visibility sets in, it can be difficult to reverse. Unsupported brands are more vulnerable, and the leap of faith that is advertising needs more support now than ever before. So, from the editing suite to appearing on the chosen media channel, marketers need to carefully evaluate their creative, to avoid costly mistakes at a time when wasting money is least advisable.
We know that early-stage ad testing progresses it towards a creative and effective finished result, but we now have empirical evidence that testing ads with Kantar’s Link ad testing solution also leads to a better return on marketing investment (ROMI) ‘profit’. Link has been validated ongoing over 30 years and is the only ad testing research solution recognised by the Marketing Accountability Standards Board MASB based on a rigorous evaluation. Link's creative quality measures have long been validated against sales volume and long-term brand equity outcomes and it remains the foremost cutting-edge ad testing tool. Now we have new evidence that the combination of those two metrics, short-term sales likelihood and future brand demand, can predict campaign profitability.
In collaboration with WARC, we matched data from the WARC ROI database and Kantar’s Link ad testing database. WARC’s database contains over 1,100 award entries and winners from around the world. These entries come from global case studies and regional strategy competitions. Kantar’s Link database of over 250,000 global ads across all media channels includes validated metrics that measure the ability of an ad to drive short-term sales and build future brand demand. To look at the impact of creative quality on key brand metrics, we matched around 450 ads from Kantar’s Link database with ROMI profit figures from WARC’s database.
Creative and effective ads drive profit
Looking at a combination of Link measures that assess creative quality in both the short and long term, we can now prove that the most creative and effective ads generate more than four times as much profit.
Creative and Effective ads generate more than four times as much Profit
Source: Kantar Link database and WARC ROI database
In terms of driving short-term sales, we still saw a likely increase in ROMI profit for ads that performed better on the Link Impact and Persuasion measures. However, our longer-term Demand Power Contribution measure, based on the ad’s ability to drive meaningfulness, difference and saliency for the brand, showed an even stronger relationship with ROMI profit. It seems logical to have expected, that impact and persuasion (measures of how well an ad drives sales likelihood) would be more likely to drive profit, however, this clearly is not the case and highlights the fact that including some longer-term brand-building features into all advertising, is more crucial than may have previously been thought.
Short-term sales likelihood and long-term equity correlate with ROMI profit
Source: Kantar Link database and WARC ROI database
Think about the long term
So, with long-term equity explaining more of the increase in return on marketing investment profit, it makes sense to include brand-building components into all of your advertising regardless of the objectives.
The real winners are the ads that can do both, many examples of which can be found among our Kantar Creative Effectiveness Award winners. Heineken’s winning campaign Cheers to all in 2021 was a great example of this. It addressed gender-related drinks stereotypes in a way that was light-hearted rather than preachy or self-righteous, and for that reason was loved by viewers. Heineken has continued to evolve this style of advertising and continues to build their brand into the future as one that recognises and addresses the issue of today.
Heineken, Cheers to all
We do see some elements of advertising commonly appearing amongst successful ads like these that build future Demand Power Contribution and drive sales. These strong ads tend to show the product continuously throughout, make use of well-integrated product demonstrations, and they ensure the brand appears early in the advertising.
Ads with high Demand Power Contributions (long-term brand building), tend to be from established brands, but building branding devices into advertising is a powerful way to begin to establish any brand. Branding devices can develop from the inclusion of slogans that have morphed into hashtags and even into hashtag challenges on newer platforms. Slogans/hashtags can easily be transferred across ads in a multi-channel world whilst at the same time helping to concisely clarify what your brand is about in a few simple words. Celebrities can also be strong branding devices, becoming brand ambassadors that bring your brand to mind. And music and sonic branding can power other senses to consistently jog memories back to associations of your brand.
There are many ways to ensure that your advertising is driving future demand and helping to build your brand in the long term. Evidence from this new validation shows the importance of creative quality in the short and long term and should help you to defend your investments in creative advertising quality, at a time when it is needed more than ever. Costly mistakes are no longer an option and can be avoided by quick and cost-effective ad testing. Advertising no longer needs to feel like a ‘leap of faith’ now that we have further evidence to tie it directly to profit.
Visit Kantar Marketplace for more information on Link ad testing.