(AdAge) Why Emotional Messages Beat Rational Ones -- Settling the Debate: 'Soft Sell' Can Reduce Price Sensitivity, Create an Enduring Sense of Brand Differentiation: 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 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 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. (source)
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