Strong creative equals strong profitability

Wanting to unravel the correlation between profit ROI and creative effectiveness, Kantar and WARC cross-matched 450 ads, with interesting results. Here, Brian Turner of Kantar Insights NZ, discusses the relationship between the two and what this means for advertisers wanting growth while working with lean budgets.

Did you know that the most creative and effective ads generate more than four times as much profit as those with low creative quality? If you are looking at which growth levers to pull or are looking to build your case to hold onto creative budget in these lean times, this is certainly something worth factoring into your thinking.

Creative and Effective Ads generate more than four times as much profit

Source: Kantar Link database and WARC ROI database

Kantar and WARC cross-matched 450 ads so the correlation between profit ROI and creative effectiveness could be better understood. And it isn’t the case that simply spending more will deliver more profitable results as there was no evidence to suggest that higher spending directly results in higher profit. It is about generating creative effectiveness.

Further, the ‘stronger creative means stronger profitability’ finding is true of both short-term sales and longer-term brand building ads.

It seems logical to have expected that ads more focused on impact and persuasion (measures of how well an ad drives sales likelihood) would be more likely to drive profit, however, this clearly is not the case and highlights the fact that including some longer-term brand-building features into all advertising is more crucial than may have previously been thought. Another tick for ‘bothism’!  

Last year’s Kantar Creative Effectiveness Awards global winning ad, Mitre 10’s With you all the Way, is a classic example of an ad with both short-term and long-term influence – showing a product demo through a storytelling format with the brand and its personality clearly in full view for all to see. And by all accounts, this is an ad that is providing strong returns for the investment made in it. 

According to Mark Vaughan, Head of Customer Insights at Mitre 10, the ad has delivered “sustained market share growth through turbulent times and done a fantastic job establishing the brand’s position and direction for sustained future growth…”.

In all cases, it should be added that the basic principles of advertising still apply to ensure creative copy is effective, thus allowing strong profitable return to follow. The creative copy needs to be distinctive, branded intrinsically, meaningfully different in its messaging, trigger an emotional response, and, of course, be based on a consumer insight, either revealing a human truth and/or ensuring the ad delivers on these winning ingredients. If you do all of these things well, strong profitable returns will follow; definitely something worth bringing to the fore in the more challenging marketing budget discussions taking place today.

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