Competitive Intelligence in Advertising

How good is your Competitive Intelligence? Do your Ads Measure up Creatively to your Competitors'?

It is rare for an advertiser to measure its advertising creative performance compared to its competitive set, but it can be critically important to do so.  Most companies know how a new ad creative compares to its own historical creative.  But if that new creative is 5% better than its prior campaign, but 10% below its competition, how does that change one’s prediction of success? 

Marketing and advertising professionals are pretty good at collecting competitor data on  media spend, digital progress and copies of ads themselves.  However, it is much more difficult to get hold of advertising effectiveness data for competitors.  Unless they subscribe to a syndicated creative testing program, they can’t fully know which campaigns are working, and which aren’t.

Competitive Intelligence (CI) Definition

Picture of eyeballs illustrates competitive intelligence.Wikipedia defines CI as the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers in strategic decision making for an organization.  Advertising competitive intelligence includes collecting not just creative materials, but testing scores for competitors whenever possible.

Norms Critical for Competitive Intelligence

Creative Testing provides in-depth scores on a variety of KPIs, and a service like ABX also provides an aggregated and proprietary index.  When ad scores are high, one may feel like celebrating.  But, is it REALLY good if it has not been benchmarked in some way?

Illustration of sheep shows you must measure against norms to get true answers.

Most advertising effectiveness measurement firms have norms of some kind against which one can compare.  The definition of an advertising “norm” is the average score for other ads tested in similar ways.  They are essentially the “normal” outcome expected, and show whether or not a result is better, worse or about the same when compared to others.

Many types of norms exist when evaluating ads such as: Industry, Medium; Length of TV or Radio spot; Country; Digital Type; and more.   Depending on your category, you'll want competitive intelligence in Fast Food, Restaurants, Personal Care, Retail, Consumer Intelligence, Insurance, Telecom, Household, and so on.  That data is available for any needed industry.  Here are some examples from past blog posts on the topic:

Accuracy of norms has been a problem in the industry because custom research firms are forced to use ads they’ve measured in the past for other clients which may, or may not, relate well to the current clients’ needs.  In addition, those norms are based on only pre-tested ads, many of which are experimental and don’t reflect the norms of ads that are actually put into the marketplace. Custom pre-testing is a “work-for-hire,” so the data is owned by the advertiser and comparisons against competitors are not available.  Most clients don’t know to ask for details about a research supplier’s norms before they are hired. 

Industry Norms

Everyone knows that creative testing norms differ by industry, but probably not by degree.  But ABX has tested enough ads across all media types to get a true bird’s eye view (250,000).  The chart below shows 25,000 Ads by Industry, designating which are Fair and which are Poor.  Good ads are NOT shown on this chart.  Clearly, Alcoholic Beverages, Financial Services and Banking ads score the lowest, and Restaurants, Household and Food ads score the highest. 

Chart shows percentage of poor and fair ads in 16 industries. Restaurants, Household and Food are best; Financial Services are worst.

So, comparing one’s ads to one’s industry norm is crucial since it may be a high-scoring industry, or a low-scoring industry, and it’s impossible to really evaluate competitive advertising success without the contextual reference.   Note - for Media Norms, see our Integrated Marketing in All Media resource page.

Using Insights from Competitive Advertising Intelligence

If your measurement provider has a rich array of competitive advertising creative, here’s how to use it:Creative teams get "stuck inside the box" when they don't get competitive advertising results for stimulation.

  • Give your creative team access to the competitive ads for ideation. They should be able to search by KPI, such as Clear Brand or Purchase, and find ads that did well in those areas.  Knowing which creative constructs work and which are failures provides strong guidance for new creative.  All too often we have seen a creative team presume their current campaign is working and are developing new constructs based on poor performing precedents.
  • Check competitive results when new campaigns are launched to see if they are likely to 
    succeed. If this is done early enough, it is possible to blunt their efforts by launching something even better yourself. 
  • Build regular creative recaps into your process. Some of the most successful advertisers review new ads every day and include a creative review with every management report. 

Tips on Creative for Various Industries and Products

The following are primarily ABX Advisory blog pieces analyzing ads in key industry categories that may provide some insights.  Additional external resources of strong creative by industry will be added over time. 

 Additional Resource Pages

  1.  Advertising Effectiveness Measurement
  2. Integrated Marketing Across All Media Types
  3. Competitive Intelligence in Advertising
  4. Creative Testing for ROAS, ROI and Predictive Analytics
  5. Gender Equality in Advertising

© 2018 Advertising Benchmark Index – ABX

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