Module 1: Introduction to Effectiveness Testing

Question 1

Why test effectiveness?

Answer 1

Effectiveness analysis seeks to understand whether a piece of activity has produced the desired or intended result.

Question 2

What can testing effectiveness guide in the future?

Answer 2

Future planning, future benchmarks and future remuneration.

Question 3

Why can effectiveness be a sensitive topic?

Answer 3

A full analysis can include sensitive information which a client may not be used to be sharing with agencies. Also, the results of an efficiency test can affect a client-agency relationship.

Question 4

Why is measuring the effectiveness of campaigns becoming more common?

Answer 4

Because of the rise of payment-by-results.

Question 5

What are the 6 steps of an efficiency test?

Answer 5

Planning phase:
1. Establish the client objectives

2. Select effectiveness measures

Campaign Phase:
3. Capture the effectiveness data

Post Campaign Phase:
4. Correct for other factors

5. Calculate Return On Marketing Investment
6. Present to client

Question 6

What are the two types of effectiveness measures (and their examples)?

Answer 6

Input measures:

• Offline media
• Online media

Output measures:

• Business
• Behavioural
• Attitudinal
• Staff and Internal Business

Question 7

What is Behavioural Economics and what does it aim to understand?

Answer 7

Behavioural Economics is the combination of understanding human behaviour and the wider world of business. It aim’s to understand why people make the purchases they do, how it affects them and how to influence these purchasing decisions.

Question 8

Why did Classical Economics fail and give rise to Behavioural Economics?

Answer 8

Classical Economics is built on the principle that people behave rationally, in reality we don’t behave rationally.

Question 9

What is the theory of loss aversion and why does it exist?

Answer 9

People will work harder to avoid losing something than they will to gain
it. This is because they have a tendency to ascribe a disproportionately
higher value to an item they already have in their possession, compared to
one they’re being offered, even with reference to what they may have
originally paid for it.

Question 10

What is the power of NOW?

Answer 10

Behavioural Economics tells us that consumers engage less with future
events than they do with current events.

Question 11

What is the theory of scarcity value?

Answer 11

When we perceive something to be scarce it has a greater value in our
eyes. Conversely, when we perceive it to be plentiful its perceived value
falls. When valuing things, circumstantial factors tend to crowd out factors
that point towards absolute value.

Question 12

What is the theory of goal dilution?

Answer 12

When multiple goals are pursued, they are less effectively achieved than
goals pursued individually.

Question 13

What is the theory of chunking?

Answer 13

Parts are easier than wholes. The way a task is presented affects people’s
willingness to take it on and complete it.

Question 14

What is the theory of price perception?

Answer 14

In theory, price should be a consequence of the value people attach to
something. We should be willing to pay what we think something is
worth. In practice, this causality runs backwards. The price that is
demanded for something makes us value it.

Question 15

What is the theory of choice architecture?

Answer 15

Choosing is relative to what you can have, not absolutely about what you
want.

Question 16

How do you check if data is of a good quality?

Answer 16

Check the target audience, base
sizes, sampling error and significance levels. Also check the exact question (including the order of questions), the total size of the questionnaire (too long and quality of response tails off) and the date of the research.

Question 17

What are the two ways in which marketing communications can work and what’s the split in terms of spending between them?

Answer 17

Brand building & sales activation - 60 split

Question 18

What are the effects of the two different types of marketing communications?

Answer 18

Brand building brings long term sales growth while sales activation gives you short term sales uplifts.

Question 19

When do short term effects of marketing communications dominate?

Answer 19

In the first 6 months.

Question 20

What are the factors that affect how the marketing communication split can be flexed?

Answer 20

• Emotions/Rationality
• High/Low Consideration periods
• How innovative the brand is
• Value/Premium pricing
• What sector the brand is in

Question 21

How has the optimum marketing communications split changed over the years and why?

Answer 21

A greater proportion should be spent on brand building rather than sales activation because the economy is changing and activation is getting easier.

Question 22

Why have brands been spending more on sales activation and what is the negative effect that it’s having?

Answer 22

The financial crisis caused a greater need for brands to show ROMI. The problem with this is that it lead to short-termism. There was too much activation, ineffective media mixes, unbalanced comms and generally slower growth

Question 23

What principles did Byron Sharp challenge in How Brands Grow?

Answer 23

1. Branding - Investing in brand positioning and differentiation is pointless. It’s better to aim for distinctive and relevant brands.
2. Targeting - There’s no point in targeting customers segments. Customers will not be receptive to differentiated messaging.
3. Loyalty - Loyalty programmes are not an efficient investment as they have limited impact and do not growth. Most customers are ‘promiscuous loyals’. Penetration beats loyalty.
4. Promotions - promotions will not deliver a return though they may produce a spike in sales from existing customers.

Question 24

What are the ways that Byron Sharp recommends using for growing a brand?

Answer 24

1. Focus on customer acquisition
2. Instead of relying on customer profiling focus on all customers in the category
3. Make the brand physically available/easy to get hold of - brands need to be where their customers can but also need to be accessible (Sainsbury’s salt leading to sales uplift)
4. Maximise the mental availability of the brand - it must be thought about at a purchase moment
5. Make the brand distinctive - build long-term memory structures
6. Aim for fame - Grab attention consistently rather than in short bursts so you can be ‘always-on’
7. Stay in the game - Don’t just focus on why customers might buy, also focus on why the might not

Question 25

What are the 2 pieces of advice that Google give in Effectiveness Now in relation to measuring effectiveness?

Answer 25

1. Lay strong foundations (Use data) - There’s a 13% difference in efficiency and 16% in topline revenue when you use data-driven marketing. Use data.
2. Plan to measure - The leading markets are using tailored, controlled experiments into marketing plans to measure effectiveness more closely rather than just using econometrics and attribution.