A Peak Inside The New Marketing Playbook

How Brands Grow Part 2

Last week, we talked about Andrew Ehrenberg and his groundbreaking paper “The Dirichlet: A Comprehensive Model of Buying Behavior.” Exciting? Maybe. Profound? Absolutely.

Because Ehrenberg and team gave us three new “laws” of marketing — Double Jeopardy, Duplication of Purchase and the Natural Monopoly Law. In other words …

Larger brands have more buyers who buy slightly more often.
Larger brands share more customers with other larger brands in proportion to their market share.
Larger brands tend to “monopolize” the purchases of lighter buyers in a product category.

But enough about larger brands. What about the smaller ones?

Yeah. What Andrew Ehrenberg really showed is that smaller brands are, to put it mildly, f**ked. The question is, how do we get them unf**ked?

Byron Sharp and Jenni Romaniuk (and others) at the Ehrenberg–Bass Institute gave us a new playbook.

Build Mental Availability. Marketing is a memory game. Do buyers think of your brand the moment they have a need, want or desire related to your category? Get in their heads however you can. Because if you’re out of sight, you’re out of mind … and out of cash flow.
Create Category Entry Points. CEPs are the moments when a product solves a particular need/want/desire that a buyer might have. You want a beer on the beach? You reach for a Corona. Memory requires context, and CEPs anchor your brand in the mind of buyers.
Build Physical Availability. Make your brand as easy to find and as easy to buy as possible. This includes distribution, Google search rankings and things like removing friction points from your website.
Distinctiveness matters slightly more than Differentiation. Do you stand out? Do buyers recognize you instantly? Do you, as Byron Sharp put it, look like you? Or do you look like everyone else in the category?
Reach as many light buyers and potential buyers as possible. Loyalty is not a growth strategy.

Ehrenberg reframed the game. Byron Sharp and Jenni Romaniuk rewrote the playbook. And a few more brilliant marketers added effective new plays.

From Les Binet, Peter Field and the IPA, we get a couple more foundational ideas.

Excess Share Of Voice. They didn’t discover ESOV, but Binet and Field have championed the idea for years. If you have 10% market share and you spend 15% on advertising relative to the category, you should expect to grow. If you spend less than 10%, you should expect to lose market share. Marketing is a pay to play to win game.

But it’s not always about spending more.

One of their other profoundly important contributions to marketing is the 60/40 brand-to-performance split. 60% of your advertising should be broad-reach, emotional, memory-building, brand advertising. 40% should be rational, reasons to believe sales tactics. This is more of a rule of thumb than a law, but it holds.

Why?

Emotional campaigns are more effective at building long-lasting brand memories (mental availability) and business effects. Performance marketing drives sales for a while. But after you reach all the low-hanging fruit, it becomes more and more expensive and less and less effective.

Emotional campaigns amplify the effectiveness of rational, short-term, sales-driven campaigns. You need both. The long drives the short.

Fame campaigns are the most effective drivers of business effects like profit, pricing power, sales volume and market share growth. Especially for smaller brands.

Okay, but why?

For that, we head back to the Ehrenberg-Bass Institute. John Dawes discovered another fundamental law — the 95:5 rule. “Up to 95% of people or firms are not in the market for goods and services at any one time.” Okay, it’s more of a fundamental rule of thumb, but still …

At any given moment, the overwhelming majority of your potential customers are not ready to buy. You can logic at them as much as you want, but no amount of rational, transactional, “Act Now” messaging is going to work. They’re not listening because they’re simply not ready to buy.

You still have to reach these potential customers. Again, it’s about building and refreshing memory structures so that your brand is top of mind.

These are the closest things advertising has to empirical laws or fundamental principles. And with them, we upend the old order …

Loyalty, brand archetypes, buyer personas, a rational, step-by-step buyer’s journey, the unique selling proposition, putting efficiency ahead of effectiveness, and the funnel. Most are useless. Some are actively bad.

What does this mean for you?

If growing a brand were as easy as, say, rocket science, well, this playbook would be enough to land any brand on the moon.

But there’s also an art to strategy, media and creative, which is precisely why marketers need to be wary of the obvious and embrace uncertainty. Because you have to accurately diagnose the right business problem, come up with the right strategy and choose the right tactics. Then you have to execute perfectly … or at least really well. It’s not easy.

There is good news for smaller brands.

The #1 driver of advertising effectiveness is brand size. However, not far behind in the #2 spot, is great creative. Great ideas don’t cost more, but they work a hell of a lot harder. Safe isn’t.

If advertising is a science, it’s much, much closer to the alchemy of behavioral economics than clockwork Newtonian mechanics. Still, there is a good amount of empirical evidence pointing towards what works and what doesn’t.

More importantly, there is a playbook for brand growth that is miles more effective than what came before. We’ve been working on it for a while now, and we’ve seen fantastic results for our clients. If you’d like to know more about it, please reach out.

Next week we’ll talk about the alchemy of marketing. We’ll see you next time.

Sources!

How Brands Grow Part 2 – Jenni Romaniuk and Byron Sharp
“The 95:5 Rule” – John Dawes