Our latest Digital Exchange brought together CMOs from the Inflexion portfolio to discuss their experiences in today’s landscape. Digital Director Alex Mathers hosted the event, which included a focus on driving sales through brand building and data-driven marketing.
TV advertising’s fall from grace has been fairly spectacular over the last decade. People’s growing penchant for streaming shows combined with advertisers’ preference for digital channels with measurable performance mean TV has faced a double-whammy of dampened demand.
There are many strings to advertising’s bow, and private equity is usually adept at knowing which to play. At our 2020 Digital Exchange, we invited Facebook’s Nick Baughan to talk to our portfolio company attendees about precisely this. He explained how the last ten years have seen a massive shift in adults’ use of media with mobile internet shooting ahead – largely at the expense of commercial TV. “In the 18-34 year-old segment, the changes are acute – commercial TV’s reach fell significantly in the last decade, in contrast with large gains for social media and the broader mobile internet”.
But while it’s down, TV certainly isn’t out, with some of the Inflexion portfolio learning there are gains to be had from taking a countercyclical approach to brand building. Pet nutrition business Lintbells, which received backing from Inflexion in 2017, opted to test TV spend while prices were favourable as other advertisers retrenched during COVID-19. The initiative was a big endeavour for a company of Lintbells’ size, but the backing of Inflexion since December 2017 meant it had the financial firepower to do it. It proved to be one of Lintbells’ most successful initiatives of 2020.
Online leisure marketplace Virgin Experience Days (VED) has found similar success including TV in its advertising mix. Having traditionally used all the available channels including TV since 2019, these are applied cleverly. Rather than broad-brush traditional TV advertising, VED applied very targeted ads enabling the business to track website browsing, providing clarity on which ads brought in the best quality as well as quantity of traffic. All the consumer interaction with the website (whether mobile, tablet or laptop/desktop) is tracked to understand the browsing and purchase interactions, testing a whole slew of changes to the user experience (UX) in order to maximise conversion. So targeted is VED’s advertising that it even amends the offering based on weather forecasts as that impacts on what consumers will fancy doing.
“VED is a performance-based environment and our marketing traditionally purely digital, with every dollar we put in fully attributable,” explains Robbie Povey, Campaign and Brand Manager at VED.
“Our digital channels have been working exceptionally and we have a well-structured strategy around digital, but we have also been keen to continue building awareness around the Virgin Experience Days brand and category”
VED chose TV as a spearhead for this and, although brand building and sales activation work over different timescales, VED’s return on advertising spend (ROAS) was up across the board despite an increase in performance spend. Additionally, there was a 176% uptick in branded search.
Even when COVID-19 hit, VED made a conscious decision to continue to invest in advertising to grow its share of voice.
We kept spending even when competitors weren’t. We’ve tried to engage the team around brand to deliver objectives beyond the ROAS model, since brand investment creates a strong upper funnel – customers can’t buy what they don’t know.
Robbie points to the cumulative effect of TV as clear evidence brand investment works: a survey revealed VED’s consumer spontaneous awareness was 51%, nearly twice its competitor in second place.
James Stevens, Assistant Director at Inflexion and on VED’s board commented, “A lot of the success is organic content driving repeat engagement over a long period of time. When we put TV into the mix, figures went the right way, and the cost of acquisition came down. It’s not always an immediate conversion but it may drive association over a period of time and later inspires purchases.”
Overall TV advertising helped drive a record 2021 for VED as branding was boosted and this has continued in 2022. “Tracking brand allows you to set goals related to actual customer needs and move beyond a singular ROAS view on performance,” Robbie says.