If you yearn to grow your business into an empire, these are the most important advertising charts you’ll ever lay eyes upon.*
Starting with this one:
This chart (courtesy of Marketing Effectiveness legends, Peter Field and Les Binet) shows that long-term growth requires long-term brand building.
You must invest in mass media ads aimed at building an emotional connection between your brand and the market.
For without growing your share of mind, you cannot hope to grow your share of market over the long term.
Also, look at the orange line and see how sales growth from branding is cumulative with repeat investment, whereas sales activation ads are not.
Next up is this beauty (also taken from Field & Binet):
“Share of Voice” represents your share of all the advertising done in your market for your industry.
For example, a 5% Share of Voice would mean that for every 20 mass media ads run for your industry, one of them is yours.
This chart shows that share of market equalizes over time to share of voice.
So a Share of Voice greater than your current Share of Market — referred to as “Excess Share of Voice” or ESOV — almost inevitably drives growth.
Basically, if you bark like a big dog, you’ll grow to become as big as your bark.
Conversely, if your Share of Voice is less than your Share of Market, you’ll shrink until you hit equilibrium.
The relationship is linear, except near the bottom, where smaller companies get screwed.
That curve near the bottom means that small companies need significantly greater Excess Share Of Voice (ESOV) to initiate growth compared to large companies.
This is where having a top-rate media buyer is essential.
But the big takeaway here is that you’ll need to budget your ad spend according to your growth goals rather than your current size.
Finally, there’s this baby:
This chart — a classic S-Curve showing media effectiveness compared to ad spend — explains why small companies and large companies require opposite strategies when it comes to media mix.
For companies with large ad budgets, the crucial point on this curve is the point of diminishing returns.
That’s where you stop spending money on a given media and add another to your mix.
Which is why it’s perfectly sensible for bigger companies to be advertising across 3-6 different media, such as TV and Radio and Billboards and print and YouTube, etc.
But for smaller companies, the most important point is the threshold where the line curves sharply into a vertical climb.
Their strategy should be to invest in one medium — and ONLY one medium — until they can get past that threshold.
Then they should keep increasing that investment as they grow until they reach the point of diminishing returns.
And smaller companies should not add additional media to their mix unless and until they get well past the threshold point in their first media.
The mistake of too many small companies is to dabble at the bottom of that S-Curve in multiple media, only to wonder why their marketing isn’t effective.
Summing Up These Charts in 6 Take-Aways
So here are the lessons these charts should have taught you:
- If you’re trying to get off the Pay-Per-Crack Treadmill and grow into the big-boys’ club, long-term brand building is a must.
- You need to be prepared to wait about a year for your branding to take (even though you’ll see non-sales indicators much earlier than that).
- Growing as a smaller company requires “cheating” through savvy media negotiations and a skilled ad writer to ensure your ads show up much bigger than your budget.
- You need to budget your advertising according to growth goals rather than your current size.
- Dominate one media before adding another, which means smaller businesses will typically launch their branding campaign with just one media.
And the last but most important takeaway is this:
- Run, don’t walk, away from any advertising firm or marketing “expert” who tries to sell you on anything that runs counter to these charts.
And if you suspect that your current advertising doesn’t match up with these lessons, feel free to reach out for help re-booting your advertising to fuel explosive growth for your business.