“Of course people know us all over Germany*!” But do they really? Raffael Weber, primarily responsible for digital trade marketing and geo intelligence at Crossmedia, and Matthias Schneider, Group Leader and Data Researcher at Crossmedia RedBox, have discovered in a study that the recognition of many major brands is not quite that evenly distributed throughout the country. The two experts not only examined brand awareness, but also the media spend of numerous brands. In this interview, they provide in-depth insights into their work.
*Editor’s note: This article focuses on the German advertising landscape, however, all findings can be applied to other markets.
In your recently presented study, you come to the explosive conclusion that many brands act too one-dimensionally in their media planning on a national level. Why is that even a problem?
Raffael Weber: It’s quite simple: the reason is that brand awareness is demonstrably not evenly distributed everywhere – even among the very big brands! This becomes a problem when this uneven distribution leads to a lack of brand success in the medium and long term. The consequences are devastating, because sales lie far below their actual potential!
Where exactly are the pitfalls in such a strategy?
Raffael Weber: Media planning that is overly national in scope can lead to massive deficits in effectiveness and efficiency. On the one hand, not taking into account the regional imbalances of brand, target group and sales indicators makes planning easier, but on the other hand, such a strategy also ensures that communication cannot develop its full potential. And then there is the competition: If your own brand awareness and likeability drops regionally compared to the competition, things get really challenging. But this is exactly what our approach allows us to analyze. It enables us to derive the appropriate corrections in the media strategy. We’re not just talking about a few brands here, but a significant part of the market.
You postulate that a significant proportion of brands in Germany are performing far below their potential. What figures did you take into account to come to this conclusion?
Matthias Schneider: We broke down about 1,200 brands included in the YouGov BrandIndex and analyzed them on a regional level. The proportion of brands whose awareness varies greatly from region to region and which therefore often fail to exploit their potential lies at almost 50%. So we’re talking about 600 brands that urgently need to rethink their media strategy and attach more importance to the area factor in their planning.
What about the other brands?
Raffael Weber: We basically divide them into three clusters. The “nationals” account for 42% and comprise predominantly nationally perceived brands. “Locals,” on the other hand, refer to brands that advertise only at the local level – with good reason – they come from one region and that’s also where their sales territory lies. They are widely perceived there. These brands account for 11%. Finally, there are the “balancers” with a share of 47 %.
Matthias Schneider: And this is where it gets interesting, because the “balancers” have neither balanced national brand awareness nor purely local brand awareness. That’s not always a bad thing: A brand with a sales territory exclusively in southern Germany doesn’t have to be known in the north; but if it has a communicative presence everywhere, that may pose a problem. So the next step we took was to analyze the media spend in the area to get an indication of how these brands are currently communicating.
What does the “balancers’”’ communication look like?
Matthias Schneider: We analyzed the TV spending in order to break down the communication of the “balancers”. Matching the balancers with their TV spending yielded revealing results: Although the brands considered have a regional need to catch up, a majority of them continue to rely on national communication based on the scattergun approach, instead of targeting regionally in terms of presence and message.
Raffael Weber: This is precisely where the disconnect reveals itself. The “balancers” actually need a balancing strategy, because they have to take into account the fact that their brand functions differently from region to region. Accordingly, they have strong gaps in brand awareness in certain regions, to which they have to respond individually.
So “balancers” basically have to advertise more on a regional scale?
Raffael Weber: No, sometimes regional targeting is simply too granular and too costly. Our research serves as a baseline, an additional tool with which the imbalance can be identified and possibly eliminated.
What are the alternative options to close these gaps in brand awareness?
Raffael Weber: First of all, presence and messages need to be much more targeted so that the media impact doesn’t fizzle out, but reaches the right addressees. It is worth taking a closer look here. Those who do so have various media strategy options. Two common approaches are the balancing and local-hero strategies already mentioned.
Matthias Schneider: The balancing approach achieves a balance of the spatial imbalances on the basis of the regional brand strengths and weaknesses with regional targeting options of both the classic and digital media. Here, the selection of channels is about the strategic and tactical fit as well as aneatly balanced intermedial delivery of performance. This approach makes sense, for example, for brands with nationwide distribution, such as FMCG, e-comms, banks, insurance companies and retailers.
Raffael Weber: The local-hero strategy, on the other hand, compares regional markets and regional brand strengths and weaknesses, also in comparison to direct competitors. The necessary media impact to become a “Local Hero” is derived from the ratio of one’s own brand values and local advertising pressure to that of the competitors. This makes it possible to assess how much advertising pressure is necessary to be louder and more visible than the competition for any given area.
What do you recommend brands consider in their media planning?
Matthias Schneider: Those in charge should question whether current communications are actually in line with the goals they have set. Our balancing approach and our local hero strategy provide the first remedy, should the brand be one of the “balancers”.
Raffael Weber: It makes sense to differentiate the messages regionally based on the varying brand awareness and thus either develop the brand further or delve directly into the product and proposal communication.
Matthias Schneider: We also recommend working flexibly and then regularly adjusting the regional media strategy based on the evolving brand values of YouGov tracking. Regional gaps in brand awareness will then be a thing of the past.
More insights from the study can be found in our Regio White Paper, which you can download for free via this link (German only). Should you wish to discuss optimizing your regional advertising potential, please do not hesitate to get in touch with Jens Schnückel (schnueckel@crossmedia.de).
Foto Credit: Julia Höfer (Crossmedia)
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