Brands that directly take on a competitor, intending to cast aspersions on that brand, are among the most likely to score a direct hit.
Advertising campaigns are intended to build brands, but they don’t work in a vacuum. Consumers are bombarded with messages from a variety of brands, most of which are intended to build the advertised brand and to win market share. In fact, advertising typically works as a constant-sum game; one brand’s rise is another’s fall. Given this dynamic, it’s surprising that most advertisers and advertising researchers don’t pay closer attention to how competitive advertising affects their own brands.
If you’re failing to isolate the impact of competitive advertising, you may be jeopardizing your brand health in two ways:
- By understating the power and importance of your own advertising campaign. It is clear from our research that most brands show deterioration in key performance indicators (KPIs) among those consumers who aren’t seeing the brand’s advertising. Very often, advertising plays a defensive role, offsetting declines in brand health that are happening among those who aren’t seeing the brand’s campaign. Competitive advertising is a principal cause of this weakening of brand health.
- By failing to recognize the potentially powerful, deleterious effects that a particularly hard-hitting or persuasive competitive campaign may have on your brand until it’s too late and you’ve already lost ground in overall brand health. With a comprehensive cross-brand advertising analysis program, you will be able to detect competitive campaign influences much sooner.
The best way to isolate the impact of advertising is to use a longitudinal research design, to monitor the attitudes and behaviors of a single group of consumers over a defined time period.
In designing such a study, researchers should include all of the brand’s KPIs as dependent variables. These KPIs should include the important drivers of brand sales, with a primary focus on those that the advertising is tasked with influencing. As in most brand health studies, the brand’s KPIs should not be measured in isolation; competitive brands should also be measured against the same metrics. This provides the ability to assess total change over time, to track changes for your brand versus other members of the competitive set, and to identify specific individual consumers whose brand ratings improve or deteriorate over time.
The independent variables in such a study include all of the brand’s ad executions that run during the period of study, as well as competitive ad executions. In order to isolate the impact that advertising produces on the brand’s KPIs, it is necessary to determine who among the longitudinal panel has seen both the brand’s ads and the competitive ads. The longitudinal design uses a proven recognition approach, enabling us to determine with a high degree of accuracy which ads each individual panel member has seen over the course of a given time period of up to a year or more.
Once each respondent has been classified according to their ad awareness, comparing the changes that have occurred in brand KPIs among different exposure groups (e.g., those who have seen ads versus those who have not) becomes a fairly straightforward exercise. The first pass at the data typically focuses on the brand’s own campaign: What has it done for the brand? What would have happened to the brand without advertising? The ability to accurately determine who has seen the competitive ads (with or without also having seen your ads) enables us to go even further, answering questions like how competitive advertising has affected your brand and how your brand’s advertising has made an impact on the competitive brand.
Competitive advertising affects the majority of brands. Brands that directly take on a competitor, intending to cast aspersions on that brand, are among the most likely to score a direct hit. Samsung’s initial “The Next Big Thing” campaign was intended to ridicule Apple and the hype Apple creates around new releases of the iPhone and other devices. Over time, Samsung has seized the spotlight and built an image as a brand that provides exciting new products to the smartphone and tablet marketplace.
Likewise, Southwest Airlines has assumed a feisty underdog persona to take on the entire competitive airline set. In adopting this stance, they have effectively positioned themselves as the airline that provides the best value – with a smile. In doing so, they have characterized their larger competitors as being less responsive to customers’ value needs, and less friendly.
Beyond the brands that are explicit in their intent to unseat a competitor, the brands from which we see the greatest competitive advertising interactions are those fighting over similar brand positioning or consumer benefits.
Coke and Pepsi are both battling for the cool brand positioning to the extent that one is cooler among a particular segment where the other is less cool.
Likewise, if BMW is the “Ultimate Driving Machine,” it must mean that Mercedes, Audi, Acura or Lexus is not. The brands striving to be the performance car of the luxury division will be more affected by the persuasive BMW advertising than will brands that are attempting to own a different space.
Because unique selling propositions are so hard to come by, and because all brands within a category generally know what key consumer “wants” are for that category, it is common for two or more brands to be jockeying for the same position. There is often no clear-cut winner or loser in these skirmishes, it’s simply a matter of gaining and holding as much ground as possible through the use of engaging and persuasive advertising that stays on-point and is supported by other marketing communications that reinforce the message (e.g., in-store, online, etc.).
Our research has identified some common patterns in cross-brand advertising impact:
- The first dimension on which advertising produces negative effects on competitive brands is usually brand perceptions, particularly those attributes on which two or more advertisers are resting their brand proposition. When competitive advertising starts having a negative impact on perceptions of your brand, watch out! Erosion of brand sales and share may follow, particularly if the affected image dimensions are principal drivers of brand choice.
- Bigger brands, market leaders and others with strong share positions are typically more vulnerable to overall competitive influences from a sales standpoint, although they are often less likely to be affected by the specific attribute dimensions or claims made by any one smaller competitor.
- Brands that lack a strong differentiating position and/or are suffering sales slippage, are the most vulnerable to being further affected by competitive advertising. The first step in developing an effective counter-competitive strategy is identification of the nature and scope of the problem.
In the highly competitive retail store environment, fourth quarter holiday sales make or break the year. For JCPenney, the fourth quarter of 2013 was particularly critical, as the chain was attempting to emerge from a serious, multi-year sales slide. Having lost a substantial portion of its loyal customer base as a result of a failed re-positioning, the brand needed a strong quarter to win back consumers and prove its viability in the market.
The brand developed a holiday campaign focused on promotions and deals, and incorporated a seasonal hashtag: #JingleMoreBells. The campaign was executed across media using a distinctive thematic approach involving a multicultural choir singing about special deals to the tunes of familiar holiday songs. The intention was to stand out from the competitive clutter of seasonal ads offering bargains while clearly communicating that JCPenney is the place to find great deals during the holidays.
At the end of the quarter, the brand was able to report generally better than expected sales results, providing the space necessary to continue progress in its turnaround. However, a longitudinal analysis of the impact of JCPenney advertising and the campaigns of competitors provides a more complete picture of what happened, why, and what the next phase of the advertising needed to address.
The research approach involved interviewing more than 3,000 female adult shoppers before the holidays, and then re-interviewing 838 of the same individuals at the conclusion of the season. Brand perceptions and shopping behaviors were tracked on a pre/post basis, and at the end of the season we determined advertising awareness across five key brands: JCPenney, Macy’s, Kohl’s, Target and Sears. As such, we were able to isolate changes that occurred in brand perceptions and behaviors among those who saw JCPenney advertising and/or the holiday advertising campaigns run by competitive brands.
The results indicated that:
- The JCPenney campaign was indeed successful in driving traffic into JCPenney stores and generating sales. The positive advertising-driven behavioral outcomes for JCPenney came to a large extent from Target, which was particularly vulnerable on the basis of the security breach that occurred mid-holiday selling season. Macy’s also lost in purchases to JCPenney as a result of the JCPenney advertising, while Sears and Kohl’s (both of which had weak holiday seasons generally) were not as directly affected by the JCPenney ad campaign.
- While successful at convincing consumers to spend their holiday funds at JCPenney, the brand’s holiday campaign did not produce such a rosy outcome from a longer-term brand-building perspective. In fact, the campaign did little to build brand perceptions on important dimensions such as brand affinity (“for people like me,” “cares about me”) and selection (“has great options for the entire family,” “has great quality products,” “is keeping up with the times”).
- Not only did the JCPenney campaign not build brand perceptions, competitive campaigns were effectively damaging the JCPenney profile on these same dimensions. During the holiday period:
- Those who saw Macy’s advertising became less likely to perceive JCPenney as providing the merchandise selections they are seeking, as reflected in deterioration in JCPenney perceptions on “has great options for the entire family,” “has great quality products,” and “is keeping up with the times.”
- Seeing Target advertising caused shoppers to question JCPenney as a brand that’s “for people like me.”
- Both Kohl’s and Sears ran campaigns that hit JCPenney perceptions on both selection and affinity-related perceptions.
The implications were clear. Through its single-minded focus on building short-term sales, JCPenney made it through the holiday season, but had left itself vulnerable to the competition. The strong campaigns of competitive brands effectively filled the image void and were able to inflict significant damage to JCPenney on several key image dimensions that would likely prove critical for the brand in its attempts to build back a loyal customer base.
Time will tell whether the current JCPenney campaign, themed “When it fits, you feel it,” will succeed. Continued monitoring of competitive advertising impact on the brand will provide an early indication of the ability of JCPenney advertising to effectively inoculate the brand against competitive pressures.
Other examples in which cross-brand advertising impact analyses have illuminated key issues that the advertising team was then able to address via shifts in advertising strategies or tactics have included:
- A mom-targeted grocery food brand that had always been the choice of moms who wanted a taste their kids enjoy but with a product that contained only high-quality ingredients. Two competitive brands introduced line extensions that were also based on the quality ingredient benefit, and their advertising was clearly beginning to erode perceptions of the original quality ingredient brand (although sales were still strong).
A new campaign was developed that re-focused more directly on the ingredient story and the end benefit of being the one brand that you can feel good about serving to your children. Importantly, the new campaign resurrected an early brand “reason to believe” that was woven inextricably into this particular brand’s heritage and thus was a claim that no other brand could make.
This new campaign effectively protected the brand against competitors, and subsequent research indicated that the tables had been turned; this heritage brand’s advertising was causing consumers to doubt the claims made by the newer competitors.
- A beverage brand that competed in a highly competitive, multi-brand category, had always been differentiated on the basis of taste, but had begun to lose its focus in advertising and other consumer-directed communications. Cross-brand advertising impact analysis identified the fact that the market leading brand was showing vulnerability and competitive campaigns were beginning to produce erosion on taste-related perceptions for the brand.
The third-ranked brand in the category, relatively undifferentiated in the mind of the consumer but with a taste profile that performed well in blind studies, developed a new and highly-focused, fully-integrated communications campaign that touted the (surprisingly) superior taste of the smaller brand. This campaign produced strong erosion for the leading brand, both in perceptions and purchasing, which the larger competitor was unable to thwart, despite a significantly larger ad budget.
A snack brand that was second in its category, but that had always enjoyed a loyal user base on the strength of its clear, stronger taste position, began to see softening brand sales, despite the fact that the brand’s advertising continued to persuade those who saw it. Longitudinal cross-brand advertising analysis identified some erosion that had begun to occur for the brand – in terms of its robust taste profile, brand affinity, and future purchase intentions – among those who were engaging with the new ad campaign that the leading competitive brand had recently launched.
The brand developed a more hard-hitting creative approach, integrated across media venues, along with a promotional campaign that aligned the brand with other striking concepts. Initially, the new campaign was able to blunt the competitive impact on the brand’s perceptions on robust taste and on affinity dynamics, although competitive advertising continued to affect purchasing and future purchase intentions. Six months into the campaign, the erosion on behavioral dimensions had been halted as well and the brand had returned to a stable sales situation.
Would these insights and competitive-facing actions have emerged eventually without cross-brand longitudinal design research? Perhaps. However, as these examples suggest, by generating direct cross-brand advertising impact measures, it is possible for advertisers and advertising researchers to more directly address competitive threats early, before the overall brand health dynamics tell a clear and compelling story that’s more difficult to reverse.
Key lessons that emerge from the multitude of cross-brand advertising impact studies we’ve done are as follows:
- If your overall brand numbers aren’t on the rise, don’t assume your advertising isn’t working. Your campaign could very well be playing a strong defensive role for your brand – helping to offset deterioration that occurs when your target consumer sees advertising for competing brands.
- In fact, if you are in a declining category or your brand share is slipping, reducing or eliminating advertising may be the worst thing you can do.
- Measure competitive cross-brand impact to ensure that you understand what your advertising is accomplishing in the competitive environment, to be sufficiently informed to enable counteraction of competitive threats early.
- Close monitoring of brand perception vulnerability can provide a heads-up before your brand experiences significant overall slippage in brand health and/or sales.
- If you and the competitor are both fighting for the same space, be clear, consistent, and single-minded in your messaging.
- You can win the battle by ensuring that everyone who sees your advertising knows exactly what you stand for and why. Don’t distract from this message through opportunistic messages or promotional activities; while these might build short-term sales, they will expose your brand to vulnerabilities that the competitive brands will be happy to exploit.
Clearly, there’s a wealth of new insights and actionable findings to be gained from expanding your focus to include how advertising is building and tearing down brands across your competitive landscape. In today’s brutally competitive environment, it might just be the edge you need to help your brand to come out ahead in the constant sum game of advertising.