New insights on quantifying broad audiences for your brand
Even bigger brands have a lot of (super-)light buyers
The researchers show that even among the market leaders of these 55 brands, two-thirds of buyers are super-light buyers (they buy from the brand less than 5 times in 5 years) and account for one-third of sales.
For an average brand, 41% of the buyer group consists of buyers who have only bought the brand once in 5 years. Naturally, the researchers refer to the Law of Double Jeopardy. They find that the large differences in penetration and purchase frequency occur more often in the period between 1 year and 5 years than in the period of 0 to 1 year. This is not based on perception of behavior (with a high risk of bias, especially over a long period), but on registered purchasing behavior.
Market conditions affect cumulative penetration growth
The researchers categorized 4 market types on the axes of category buying frequency (high/low) and category penetration (low/high). In product groups like toothpaste, cleaning products, and biscuits (where the category buying frequency and category penetration are high), the long-term growth in purchases is primarily due to an increase in buying frequency. For product groups including razor blades and premium ice cream (where category purchase frequency and category penetration is low), penetration continues to grow even after 5 years for both brand and category.
(Dog foods, Nappies)
Category penetration is limited (~70% non-buyers). New category buyers do come in over the longer term eg educating new parents or dog owners as part of building relevant memory structures to make it easy for these people to buy the brand.
(Toothpaste, Detergents, Biscuits)
Limited cumulative category penetration growth is expected.
Most buyers are already in the market so advertising must mostly nudge brand consideration (because of repeat buying from repertoires) and refresh relevant brand memories (eg links to category entry points).
(Chocolate coated ice cream, Men’s razors)
Advertising must nudge category and brand buying. Given the very high rates of light/infrequent buying, consistency of branding is vital over time
(Deodorants, Shampoos, Moisturiser)
Some category growth is experienced, so ongoing reach matters. Ads must nudge the brand while continuing to refresh relevant memory structures to nudge the category. With some “new” category buyers it is vital the brand is easy to notice and buy.
Halo effect impacts decisions around targeting and measurement
Messaging in support of one product exerts an influence on a brand’s other offerings. This ‘halo effect’ delivers half of advertising impact, as found in another study by Analytic Partners. You can consider the halo effect to be a foundation of the modern concept of brands. Once somebody develops a favorable impression of a brand when interacting with a variant of the brand or being impacted by the brands’ advertising for a variant, we tend to view the whole brand in a favorable light. Narrowing audiences down on usage or tight category definitions should be avoided to not overlook halo effects of assets in pre-testing and post-campaign measurement.
Practical implications for targeting:
Target your market (category): brand growth is a result of growth in penetration and small increases in buying frequency in successive periods. A broad targeting strategy is better than a narrow strategy for this.
Creative strategy must appeal to a broad target group: repertoire buying is normal, and many buyers are light buyers, if not super-light buyers! Long-term consistency is crucial because many buyers only buy at long intervals.
Disruptive factors such as Covid-19, the growth of e-commerce, and high inflation can cloud the view of the market. However, it is still important not to lose sight of these basic rules. The practical implications are not new, but the context of the market situation and position of the brand provide more guidance for a brand when defining a target group than a general rule.
Andy Santegoeds has been a member of the board of SWOCC – the Dutch Foundation for Scientific Research into Commercial Communication – since 2013 and is a regular contributor of thought pieces about advertising and brands. A version of this article was originally published in Dutch on the SWOCC website – available here.