The second reading-suggestion I got during my induction period in Collidascope was “Eating The Big Fish. How Challenger Brands Can Compete Against Brand Leaders’‘.
This book was first published in 1998, 25 years ago, then the author updated his thoughts considering new emerging technologies like Facebook.
In fact, the second edition was published in 2009, six years after the birth of Facebook, a company originally named FaceMash. Imagine, at that time Facebook was a new disruptive media! (Incidentally, I still believe Meta is a disruptive company, but that is another story).
The work is centred around the fight between brand leaders and brand challengers(rooting for the Challengers).
Avis case study
This narrative style is evident from the first pages where the author showed the aggressive Avis Campaign against Hertz in the car-rental market during the sixty.
As usual I like to investigate and do some additional research.
On the web I also found other interesting ads from this campaign.
Compared with the other book “How Brands Grow” I found this one more anecdotal with a lesser scientific approach.
Without starting a Popper-debate on science and pseudoscience, I just wanted to share a neutral- impression that I got from this recent reading.
The law of increasing returns
Moving forward to the the first chapter, it is probably the most data-based of the entire book and confirms in some ways what I learned from “How Brands Grow” (but Byron Sharp’s book was published later in 2010)
The chapter is named “The law of increasing returns” .
For sure it pushed me to understand better the concept of Share of Voice, without remaining sceptical of how this metric is measured.
According to Hubspot (a leading cloud-based CRM): “Share of voice is a marketing metric that allows you to compare brand awareness on different marketing channels against your competitors. You can use this metric to measure how well your ads, social media mentions, or even website traffic compare to the competition.”
But how to calculate this value? Based on wikipedia (but I will search for other sources too):
“Share of voice measures the percentage of media spending by a company compared to the total media expenditure for the product, service, or category in the market. For example, if an electronics brand were to invest $5,000,000 advertising in their latest e-reader, but (across the whole market the spend was $100,000,000 worth of advertising) was spent advertising e-readers across the entire market for this shared category, then the 5 million dollar investment would equal a 5% share of voice.”
It seems to me that nowadays this metric is very channel-specific.
I honestly don’t know if Nielsen or other consulting firms have a way to average across the different channels this metric to get a cross-media overview (Radio-TV-Social) .
For example Google provides the Impression Share metric as:
Impression share = impressions / total eligible impressions
And I think also Facebook and TV companies provide this information, based on their data.
Again without digging into this issue and coming back to the chapter, it is interesting to know how Share of Voice and Market Share are strongly correlated.
Quite obviously the more you spend in advertising the more you grow, but what is important to know is that small brands need more money and efforts to get the growth of bigger brands.
Mathematically means that the correlation between budget and growth is not linear but it depends on the actual market share too.
The $1 invested in ad for the small company will have a lower return compared to the $1 invested in ad from the brand leader.
Based on the author, three key aspects are connected to being a market leader (initially I thought they were an explanation of why a brand was a market leader but I was wrong):
- Customer Awareness
- Shopping
- Purchase and Loyalty
Customer Awareness
Brand leaders are not only the market leader, but also the most familiar to us.
The author describes the relationship between Top-of-mind awareness and General Spontaneous Awareness.
It was the first time for me to read about this difference (and also here I still have some doubts).
Top-of-mind awareness is Salience, and it’s described by “the proportion of consumers for whom a certain brand comes to mind first when they are thinking about your category”
On the other hand “General Spontaneous Awareness” is the “proportion of people who are aware of you brand without prompting”
What does it mean “without prompting”?
Again I don’t want to start a philosophical dissertation, but as an engineer for me definitions and how data are collected are fundamental to any rigorous debate.
I found on this website(Understanding brand awareness, consideration and preference | MarketingIQ – Marketing and Media Effectiveness Insights) a kind of definition of Prompted and Unprompted Awareness.
“Prompted awareness is measured by asking people if they are aware of the mentioned brand. It could be the brand name itself, a logo or the brand as part of a list of other brands. Unprompted or spontaneous awareness questions do not mention a brand name but asks consumers to name brands they are aware of in a given category.“
The following one is the plot shown by the author describing the relationship between top-of-mind awareness and general spontaneous awareness.
So the next question is how can you be aware of something?
Through the experience: your eyes saw the brand, read/heard about it, not necessarily an ads, and you became aware of it.
I quickly thought about “physical availability” which means for me that I saw the product at the supermarket aisle or among the other brand options when I searched on my favourite ecommerce.
To be aware of a brand there must be a kind of interaction, even unconscious one.
So when they show the relationship between top of mind awareness and spontaneous awareness, I think of spontaneous awareness as the output of previous marketing efforts.
I would summaries this point as follow:
Brand leaders invested more in the past compared with challenger building memories structures in the consumers and that’s why they can spend less to grow their market share compared with a challenger.
Shopping
The second point for the author is shopping.
Basically it shows the relationship between the share of voice and how people shop across three consecutive years for the US pick-up market.
There are two things to consider about this plot.
The first one is that the more a brand spends, the more probable it is that they will get a new customer.
The second one is that the relationship is not linear for the brand leader. In fact it will get higher returns with lower efforts as happened for the Ford Ranger.
Purchase and Loyalty
The third point was a confirmation of my previous reading, “How Brands Grow”, and it basically describes the “double jeopardy law”.
Brand leaders have more loyal customers and higher penetration, I discussed about Customer Loyalty here(Chap 7 Loyalty – Brand Fanatics – Andrea Ciufo (lovabledata.com)) and here (Chap 11 – Why Loyalty Programs Don’t Work – Andrea Ciufo (lovabledata.com)).
Profitability
There is no doubt about how this leadership position affects profitability.
This was for sure the most interesting part of the first chapter.
The author shows the ROI for Market Leader, Second player and the other challengers based on 3699 businesses from the pimsconsulting database across USA and Europe.
In Europe, on average, the dominator ROI is 3 times higher than the third follower.
The direct consequence of that is a brand follower must push harder than a leader to survive.
The gap between leader and follower is simply massive!
Takeaways
So in the end, what were the takeaways from this chapter?
- Life is harder when you are not the brand leader
- Being a small version of the brand leader is not a good survival strategy
- Is it possible to differentiate yourself from the competition, or being more salient for the customers?
- How to create memorable ads and cool messages that outperform the brand leader as Avis did?
