Prof. Byron Sharp skewers Binet & Field’s 60:40 rule, smashes attention metrics, BVOD ad stacking, multi-channel amplification effect; tells marketers to sack agencies preaching share of voice quotas and bet the farm on always-on reach; Ritson backhanded
Professor Byron Sharp delivered a broadside last week at the Mi3-LinkedIn B2B Next Summit in a bid to bring marketers back to the fundamentals of advertising, brand building and growth. Marketers adhering to Les Binet and Peter Field’s formula around brand to performance budget ratios are basing investment decisions on questionable data, according to the Ehrenberg-Bass Institute marketing science supremo. He also said advertisers piling into attention metrics risk being “suckered” and implied that multiple iterations of ads – dynamic creative or otherwise – can weaken memory structures and hinder growth prospects. Going for a full house takedown, Sharp suggested proponents of cross-channel network effects are peddling a “myth” before lauding Professor Mark Ritson… for admitting he was wrong about the nuances of “sophisticated targeting”.
What you need to know:
- Professor Byron Sharp told marketers to concentrate on the basics – building mental and physical availability and advertising consistently throughout the year – to drive growth.
- Addressing the divide between brand and performance camps, or “activation and advertising”, Sharp said brands need both, but that without building memory structures through advertising, no amount of performance advertising would deliver growth.
- Sharp dismissed the 60:40 brand to performance ratios formulated by Les Binet and Peter Field as based on unsound awards data.
- He argued paying more for more than fleeting attention is a waste of money.
- Sharp also suggested that multiple iterations of creative could actually hinder growth and stated the network effects of advertising across channels are “a bit of a myth”.
- Meanwhile, he said brands paying for BVOD ads running back to back within the same show should get them “for free”.
Full mental jacket
Sharp told the Mi3-LinkedIn B2B Next conference to focus squarely on mental and physical availability. Marketers should spend their budgets trying to reach all potential buyers in order to grow their category and therefore their brands – the core tenets of his best known book, How Brands Grow.
Sharp acknowledged that marketing science moves slowly – but that rigour cannot be shortcut.
“We make discoveries and then we spend ten plus years working on those discoveries. What are the implications? How do you say this? How do you communicate this? How do you implement this in an organisation? The ‘D’ in R&D takes a lot longer… and it’s sort of embarrassing, but it has taken us about 20 years to boil down a lot of very important media discoveries into, I think, two quite simple rules.”
In short, reach everybody and be always on with advertising in order to grow.
He dismissed “things like attention is the new metric” as “nonsense”, and stated that Binet and Field’s 60:40 brand spend to performance rule is based on flawed data.
“Les Binet is a lovely guy, and I would say a good friend of mine, but [the 60:40 rule] really is terrible, very misleading,” said Sharp.
“60:40 is supposed to be the magic formula for you. Spend 60 per cent of your money on advertising, whatever that is, no one’s really clear, and 40 per cent on activations. But people have no idea what activations really are and there’s no guidelines. So really, you can spend whatever you like. But it sounds good to have a formula,” said Sharp.
“If you actually read Peter Field and Les Binet’s first report on this, they analysed a very weird data set, which is award submissions. If you wanted to solve this issue, you would never use that data. But why did they use it? Because that’s the only data they had … It’s not a scientific law, but I think a law that holds is that where there is demand, there will always be supply,” said Sharp. “And there was demand. People wanted a number.”
He argued marketers must be always on with advertising that builds mental availability over years, aligned with physical availability, so that brands can “catch buyers when they fall”, i.e. when they come into market and are ready to buy. In other words, build brands in the long term to be there at the moment of choice – and have the goods ready to go.
“Growth and maintenance largely depends on mental and physical availability,” said Sharp. Physical availability means making your brand “easy to buy … If someone wants to buy from the category you are not too hard to access, your package is not too big for them to get it in the car, you will deliver when they need it – so being able to get it.”
Mental availability is about buyers “being able to notice you or even consider you … see you on the shelf, recall you”, he added.
Brand and performance
Mental and physical availability must overlap to drive growth: “If people are going into the store or onto the screen but they don’t see you, then your return on physical availability is miserable. But if people know you but you’re too difficult to buy, then your return on your mental availability is terrible.”
Activation – or performance marketing – is a part of physical availability, but if people are not primed to buy and are not in market, “it won’t work” no matter the budget spent, said Sharp.
“Physical ability is about catching people when they fall. So if you’re a 10 per cent share brand, of all the people who are buying from category today you’d like to get 10 per cent, or maybe a bit more … that’s what growth is,” said Sharp.
“When people buy a car or financial services they typically look at two brands. So the odds are you will get half of them where your brand is in that two – but most of the time it isn’t. So activation is about getting your 50 per cent share, but it’s the advertising, the other stuff, that determines whether you are in that [consideration set of] two. And that probably happened five, 10, 15 years ago,” he added.
“Paid search, in store display, price promotions, special offers – all of these things are to catch people when they fall. But people who aren’t in market do not see them – and most people are not in market,” said Sharp. He nodded to fellow Ehrenberg-Bass professor John Dawes’ work on the 95:5 rule, which states that only five per cent of B2B buyers are ever in market, so marketers should focus on the 95 per cent that represent future customers, and sales (and therefore performance budgets) focusing on the five per cent of active buyers.
Read the full article in Mi3.
