Ad Age - March 2, 2009

WHY EMOTIONAL MESSAGES BEAT RATIONAL ONES

Settling the debate: ‘Soft sell’ can reduce price sensitivity, create an enduring sense of brand differentiation

By HAMISH PRINGLE and PETER FIELD

EVER SINCE THE DDB creative revolution in the 1960s, debate has raged about the best kind of messaging for building profitable brands. On the one hand, devotees of the “hard sell,” or persuasion-based communications, argue that facts and rational arguments sell products and services best. On the other hand, devotees of the “soft sell” contend that brands that can inspire strong emotional responses in consumers and create true engagement can transform businesses, turning the tables even on bigger competitors. In recent times the tide has begun to turn in favor of emotional engagement, with some high-profile converts at Procter & Gamble, but the argument is far from over.

So when we sat down to write our book, “Brand Immortality”—a manual on how to keep brands healthy in the long term—we knew this would be one of the key issues to address. Our primary data source is the U.K.’s Institute of Practitioners in Advertising Effectiveness Awards, which were founded in 1980. The book’s analyses are based upon the accumulated learning from 880 case studies from the U.K. national and international competition.

The cases cover two recessions and the occasional market wobble, so we can distinguish between strategies for the good times and the bad. By comparing the case studies that generated the largest business effects with those that generated less impressive effects, we have been able to explore which marketing inputs tend to promote success and which do not. We can also see how this varies during the life cycle of market categories, from birth and growth to maturity and decline.

What the data show us is that emotional campaigns are almost twice as likely to generate large profit gains than rational ones, with campaigns that use facts as well as emotions in equal measure fall somewhere between the two.

It turns out that emotional campaigns in general generate a wider

“FAME CAMPAIGNS” WORK: Wieden & Kennedy’s “Cog” ads, which showed car parts interacting in a domino effect, generated £390 million in extra revenue.

CAMPAIGN STRATEGY

Percentage that report very large profit gains

Emotional

Combined

Rational

0% 10 20 30 40 50

Source: IPA Effectiveness Awards

range of desirable business effects, each of which plays its part in improving profitability. But they excel in one noteworthy area: reducing price sensitivity, and hence strengthening the ability of brands to secure a premium in the marketplace (or, in the current economic climate, to hold firm on pricing). For most brands, clearly the impact on the bottom line of a 1% increase in pricing is much greater than of a 1% increase in volume sold, so this is a particularly important strength.

The data also show us that one of the main drivers of this pricing effect is the superior ability of emotional campaigns to create a sense of differentiation for the brand, one that can endure and will not disappear with the next product launch from a competitor. We examine a number of famous brands, such as Apple, that have exploited the emotional power of their brands in this way. But perhaps the most remarkable of these—because we can put a

financial value on the impact of the marketing—is U.K. mobile-phone operator O2 (which, tellingly, was later chosen by Apple to launch the iPhone in the U.K.).

O2 was a brand identity created by Lambie-Nairn when the business was de-merged from British

Telecom. Previously known as BT Cellnet, it was a troubled business, losing ground to competitors and an unremarkable brand characterized by rational product claims that had lost their potency.

The initial public offering on the London stock market valued the business at £ 6 billion in November

2001, and the renaissance began. A powerful emotional campaign through agency VCCP ensued around a theme of freedom and enablement that found a human expression for the products on offer. This helped transform the business. Customer acquisition, loyalty and average revenue per user all improved dramatically. In 2006 Spanish-based multinational Telefonica acquired the business for £ 18 billion—more than three times its IPO price. Econometric modeling of the campaign’s contribution to the bottom line of the business showed the largest ROI of any case study in the IPA Databank: 62 to 1, thanks to £ 4. 8 billion of incremental profit during the period of the campaign.

So emotional engagement is

good for business, but there is a higher level of emotional engagement that we can look at, namely “fame” campaigns. Fame campaigns get the brand talked about. They amplify the strengths of “ordinary” emotional engagement—especially the ability to reduce price sensitivity—and in general, they are the real high fliers among the IPA Databank cases. Among others, we report the results of Wieden & Kennedy

London’s campaign for Honda from 2002 to 2004, which helped transform the profitability of the U.K. business. The most important TV commercial in the campaign, “Cogs,” showed parts of the car interacting in a cleverly choreographed domino-effect sequence.

It proved so intriguing to consumers that the commercial was downloaded

2. 3 million times from the website and generated huge amounts of online buzz. More important, it generated £390 million in extra revenue through a combination of a 28% volume uplift and a significant improvement in showroom sales prices: Dealers found they did not need to discount Honda vehicles so heavily to sell them.

Our analyses also show that emotional strategies continue to work well during downturns, although there is a need to match the competitive price and promotional messages

Pringle and Field

that proliferate during these times. Nothing can guarantee brand immortality, especially in a recession, but powerful, emotionally engaging campaigns are proven to help. In addition, we can see that emotional engagement increases in importance during the life cycle of market sectors, as persuasion-based strategies progressively lose the product differentiation they depend upon. There are very few effective persuasion campaigns in declining categories in the IPA Databank. Debate over.

First in a series

HAMISH PRINGLE ...

is director general of the IPA and author. He joined Ogilvy, Benson & Mather in 1973 and has worked at McCormick Richards, Boase

Massimi Pollitt, McCormick Intermarco-

Farner/Publicis and Abbott Mead Vickers. He also formed agency Madell Wilmot Pringle.

PETER FIELD ...

is a marketing consultant and author. He started his career in 1982 at Boase Massimi Pollitt and has worked for Abbott Mead Vickers

BBDO, Bates and Grey London. In 1997, Mr.

Field left advertising to pursue a consultancy role supporting clients and agencies.

Klein From Page 12

vs. Big Mac taste test in cultures that
hadn’t tasted either) because the
quarter hasn’t been reported yet. But
as a campaign, was it as successful as
“Whopper Freakout?”
That’s arguable. It certainly satisfied
our business objectives by most
accounts. It rivaled “Freakout” in
terms of the social currency it creat-

ed, meaning the late-night-talk-show circuit, water cooler, blogos-phere, YouTube environment. I thought it was at least a B-plus sequel to a very difficult original because of what we were trying to do. How could we, going into last December, go up against the prior year’s “Freakout” campaign? We thought of the concept of the world’s purest taste test, what “Virgins” would conjure up for people coming from Burger King, and the cynicism of taste test and that sort of thing. I

would have to say it was at least a B-plus.

“Whopper Sacrifice,” a Facebook experiment that offered a free Whopper to anyone willing to remove 10 friends, resulted in the axing of more than 200,000 friends in just a few days, before the network pulled the plug. What did you think of that performance? Better than expected. In a few short days before it started to get hobbled and then taken down, we loved it for

what it did. Again it tapped into a real tension that was part of the Angry Whopper [promotional] window. For us [it was] an analog of this venting and how do you get things off your chest, and don’t you hate it when people want to be linked in or connected to you and you don’t have the heart to tell them you don’t want to be their friends? We thought it would be fun to let people throw their marginal friends under the bus for a Whopper. We loved the reaction we got in the market.

Do you ever try to piss people off for cachet among your core users? Never do I approve a piece of work or grin that this is going to piss someone off and I’m happy about it. There will be times when I look at a piece of work and say, “This may create some reaction around the edges,” and we almost sort of inhale and exhale, and we’ll brace for it rather than cherish it. We never try to offend people, but we always try to dramatize the tension we’ve identified in our creative briefs.