Creative Touches

Consider the following scenario: In a Westchester County, NY, Stop & Shop four days before Super Bowl XXXVII, Pepsi-Cola gained what arguably is the most lucrative display space available: the front endcap of the first aisle, located approximately 30 feet from the store's right-side entrance.The endcap consisted of a three-foot riser holding 12-packs stacked 15 high and three deep. Barely visible among the cases in the upper left corner was an 8-inch-by-11-inch price sign, supplied by Pepsi and carrying the official Super Bowl logo.Aside from similar logos on the packaging, that sign was the only material communicating Pepsi's official Super Bowl sponsorship -- a tie-in to which the beverage giant committed a reported $160 million over five years.For all intents and purposes, the sponsorship was irrelevant to the display and its effectiveness in driving sales -- which, given its prime location, it may very well have done. The display, conversely, did little to help Pepsi communicate its sponsorship or its brand positioning.However, that doesn't mean the sponsorship was entirely unimportant. In fact, it is quite likely that the Super Bowl tie-in, along with the media activity Pepsi undertook to support it, played a large role in securing the upfront position and sending rival Coca-Cola to a less-conspicuous location in the store.Manufacturers and retailers know that additional display space can significantly increase product sales. They also know that a display combined with a price discount and/or featured advertising can lead to dramatic lifts in incremental sales.But exactly what impact sponsorships, entertainment tie-ins, consumer promotions, and other creative executions have on the sales effectiveness of displays is less clear. Can stronger brand messaging or a promotional overlay lead to incremental sales, over and above the lift generated from the display itself? If so, does the increase justify the additional costs involved?Most marketers say, yes, although relatively few can support that conviction with quantifiable research. But even those who do measure the effect say the creative is more an indirect catalyst than a direct sales driver.In short, most marketing professionals say that strong creative is necessary more to generate retailer interest, brand awareness, and consumer excitement than it is to increase sales. To put it even more succinctly: Displays drive sales; creative drives display placement.This report examines the role of creative on a display's effectiveness, and the factors marketers should consider when choosing a creative strategy.Definition of 'Creative'When used in relation to a P-O-P display, the term "creative" has a wide range of meaning. For this report, we have defined it as "any message or graphic element that appears on a display other than brand name ("Brawny"), product category ("paper towels)" or price ("99¢ per roll" or "20% Off").The numerous tactics covered in that broad definition were then segmented into three categories: "General" creative: Product images, brand slogans and taglines, descriptions of product features and benefits, lifestyle images, generic calls to action like "Take One Home Today" or "Stock Up for Summer." All of these tactics help call attention to a display without offering any additional purchase incentive for the consumer. Consumer promotion: Any communication that presents an additional incentive to purchase other than price. These would include messages communicating a game, contest, or sweepstakes, an on-pack or mail-in premium, or a gift with purchase. It would also include "educational" messaging, such as a recipe or fashion tips. Promotional tie-ins: Use of borrowed equity, most typically from an entertainment or sports property, either to enhance a display's appearance or to communicate a promotional offer.Beyond that definition, marketers interviewed for this report cited two other aspects of "creative."Many included the design of the display itself, both in its form (material types, size, shape, color scheme) and its functionality (modularity, mobility, interactivity). At issue here is the display's appeal for retailers and shoppers.Others included creative elements that aren't communicated on the display, but have a hand in its success. These include concurrent media advertising and trade incentives.These expanded parameters ultimately will become important to this discussion.Spheres of InfluenceTo fully understand the impact creative elements can have on a display, one must examine their role in five areas. They are:Sales: Whether or not the creative has any additional impact on the sales lift generated from a simple product display, or from a display that communicates nothing more than a brand name and a price sign.Retailer acceptance: How important the creative is for the sell-in of a display program at retail.Retailer compliance: What effect the creative has on gaining store-level execution.Brand awareness: What role the creative plays in driving awareness for the brand, either as a stand-alone tool or as part of a broader marketing initiative.Competitive positioning: How important the creative is for securing stronger retail support and inhibiting the efforts of competing brands.1. Impact on SalesIt generally is accepted as fact that a secondary display at retail will increase sales of the product in question. Indeed, exceptions to this rule more often can be attributed to failures of execution rather than of tactic.Chart 01 contains the results of study conducted by ACNielsen for POP Times. By combining scanner sales data analysis with store display audits, the research firm determined that a display alone -- without the presence of any discount offer or additional advertising activity -- can substantially increase sales.Chart 02 examines the potential results from a display program run in conjunction either with a price discount offer (in this case, 15% off), a feature ad in a store's circular, or both. While all three tactics deliver strong incremental sales on their own, this data from Information Resources, Inc. shows that employing them in tandem can produce dramatic results.It is relatively easy to determine the effect of a display, simply by comparing sales during the program with sales in stores which did not carry the display, or by comparing sales during the program with sales in the same stores in previous time periods. (However, care must be taken to factor out additional influences on sales, such as the existence of additional marketing support, variations in shopper demographics and habits across stores, etc.)It is much more difficult to determine the additional impact of the creative on display sales, without running controlled tests designed specifically for that purpose. Even sales data analysis from programs with multiple creative executions can fall short, unless the effect derived from all other influences either remain constant or can be extracted from the equation.In a May 2003 survey, the Institute found that barely one-third of brand marketers (32.6%) attempt to measure the impact of creative on sales, and instead are relying on conventional thinking and broader results analysis -- general copy vs. promotional offer, for instance, or entertainment tie-in vs. sweepstakes -- to make assessments.Although there have been no comprehensive studies examining the issue, several independent entities contend that the right creative can provide incremental sales ranging from 2% to 30%, although generally not much more.Shopper PerceptionsConsumers, too, usually identify the presence of the product or the inclusion of an incentive offer (whether price or other) as the primary reason for shopping a display. In a 1999 study conducted by Meyers Research Center, only 20% of supermarket shoppers cited the display's "appearance" as having the greatest influence on their decision to purchase; 34% identified the presence of a special offer, and the rest referred specifically to the product (see Chart 03).A study conducted by IMI International in 2002 suggests greater relevance. The company presented consumers with five different creative executions of the same promotion; although the offer remained constant in all five, the messages and graphics used to communicate it differed greatly. IMI found that the percentage of consumers who said they'd be more likely to buy the product because of the promotion varied by as much as 26% based on the specific execution (see Chart 04).It should be noted that the above study examined the impact of general advertising materials, not P-O-P displays. Therefore, it did not assess how the creative would be perceived in a retail environment. Moreover, there are many researchers who question the reliability of attitudinal studies in general, because their results often do not accurately predict behavior. Such skepticism is especially appropriate for P-O-P research, for which it is crucial to understand the immediate motivations affecting the purchase decision.Testing MethodsListed below are the five primary methods used by marketers to measure the sales lift provided by creative elements, based on results from the Institute's survey.Analysis of results from various executions of the same campaign (47% of respondents)Historical comparison of results from different campaigns (40%)Pre-campaign, in-store testing of various executions (10%)Pre-campaign, outside testing of creative materials (5%)Other (2.5%)(Note: Respondents were asked to check all that apply.)In the most common method of measurement, the analysis of results from various executions of the same campaign, sales results from stores carrying different creative executions are compared. This method is especially relevant considering the number of retailers demanding account-specific execution of national programs. However, it is difficult to accurately gauge the true effect of creative unless all other potential influences (additional advertising activity, shopper demographics, store environment, placement) remain relatively constant.The second most common method, the historical comparison of results from different campaigns, makes the task of keeping other variables constant even more daunting. While this method may be helpful for determining the relative effectiveness of marketing tactics (rebate vs. instantly redeemable coupon, say, or sweepstakes vs. gift-with-purchase), its ability to determine the effect of specific creative elements is questionable.Pre-campaign in-store testing of various executions would provide the cleanest results, because it would give the marketer the greatest opportunity to control all other variables (by selecting a manageable number of stores with similar environments and shopper demographics, in markets without additional advertising influences.) But few companies are conducting such tests due to the additional time and resources they require.Pre-campaign, outside testing refers to consumer focus groups or other tests of creative concepts and renderings outside the store. While that strategy may help determine general guidelines for copy and imagery decisions, it cannot truly predict how those elements would be received in a real-world, in-store environment.The final method (not listed in the question but provided by respondents as "other") was a basic comparison of sales generated through a display period vs. a non-display period, which is only useful in providing evidence for the effectiveness of display placement.Tactical effectivenessRespondents who said they measured the impact of creative were asked to rank tactical options in order of their effectiveness for increasing sales. With one minor deviation, the ranking shows a pattern in which more basic marketing elements, including product imagery and benefits and feature messages, were considered to have greater impact than promotional overlays or entertainment property tie-ins (see Chart 05).Thus, elements more closely related to the product and its brand essence appear to have a greater effect on sales lift. Put another way, the least costly tactical choices are believed to be most effective at driving incremental sales.In a similar survey conducted in November 2004 by the Institute and P-O-P Times, brand marketers were even more in favor of basic marketing elements as oppsed to promotional overays. (To view the results, click here.)2. Retailer AcceptanceThese results corroborate anecdotal information gathered through interviews with brand marketers and marketing agency executives. Interviewees consistently stated that promotional elements are more important in generating retailer support and overall consumer awareness than they are in directly driving sales.This theory is supported by responses to other questions posed in the survey. Asked what factors other than sales influenced the choice of creative, the need to increase brand awareness was cited most often, by 85% of respondents. Also mentioned highly, at 77% of respondents, was increasing retailer acceptance (see Chart 06).In fact, brand awareness topped sell-though when all respondents to the survey (including those stating they did not measure creative effectiveness) were asked to rank determining factors in order of their importance. Retailer acceptance and compliance were third and fourth, respectively (see Chart 07).Marketers interviewed for this report, however, almost unanimously stressed retailer acceptance as the primary factor in deciding whether or not to include promotional elements. The rule of thumb seems to be that, since the presence of secondary and/or more prominent display space will drive incremental sales, the function of promotional overlays is to demonstrate a commitment to the product and provide a consumer "event" that will gain retailer support.Naturally, retailers are more interested in sales growth, and have little vested interest in helping a brand increase awareness. In a survey conducted by Menasha Display, Mequong, WI, an overwhelming majority of retailers (69%) said sales growth was the important measurement of an in-store campaign's success. However, 24% also cited "positive consumer reaction" as a consideration (see Chart 08).More to the point, retailers responding to a separate Menasha study said they preferred consumer promotions over price discounts as tactical support for a display program. (Note: this survey specifically covered the snacks category.) And placing not too far below discounts was "broadcast support" and "in-store events" (see Chart 09).Retailers are attracted by promotional overlays for two primary reasons. One, because they can add excitement to the retail environment, thereby enhancing the shopping experience and, potentially, increasing customer loyalty. Two, because promotional overlays usually include media advertising and other outside marketing support, which can drive store traffic (see related Case Study).Another important point to consider is placement. Display location is perhaps the most significant factor in driving incremental sales from a display (see Chart 10). Marketers interviewed for this report say the creative is often the most important criterion used by retailers to decide where displays will be placed. Promotions, especially tie-ins and sponsorships, will often score better locations than non-promotional display programs.3. Retailer ComplianceStrong creative can increase compliance levels for similar reasons. Furthermore, graphics and messages that personally resonate with store-level employees can ultimately help local personnel decide whether or not to execute the program.Anecdotally, a number of marketers note that "take-home" P-O-P, materials with creative so attractive that store employees will want to keep them, can often inspire greater compliance. (For that purpose, one marketer only half-jokingly advised adding an inflatable to every program.)In regard to compliance, marketers also suggest broadening the scope of the term "creative" to include a display's structure. Designing a display that is both easy to set up and easy to shop is vital to improving execution and sell-through (see Chart 11)4. Brand AwarenessWith most media advertising and the preponderance of marketing activity dedicated to increasing brand awareness, it is only logical that in-store programs include this objective as well (See related Case Study).Many retailers, however, have been hindering the ability of vendors to achieve this objective by restricting the size and scope of branded imagery within the store. Consideration must be given, then, to using creative that will not overstep the bounds of retailer specifications (see Chart 12).Marketers must also take care to ensure that an increased brand presence doesn't inhibit the buying process. Several experts suggest that "spectaculars" which establish a strong brand footprint -- beverage cases stacked as walk-in areas, complete with additional merchandising inside, for instance -- can intimidate shoppers and diminish sales effectiveness.5. Competitive PositioningWith numerous brands fighting for the same real estate, developing better creative than the competition is vital. And since retail space for secondary displays is limited, the competition includes not just category rivals, but all other vendors.Here, there is no direct consideration given to sales lift (although there are plenty of indirect implications). The sole objective is to develop a program that ideally will keep competing brands from gaining additional display space, but at least will gain a better location for the brand in question.Additional FactorsAmong other factors that ultimately can have an effect on sales, and therefore should be part of the creative decision-making process, are the following:Market status: In general, category-leading brands have greater clout with retailers and stronger awareness among consumers, and therefore have less need to rely on creative variations for success. (Still, the top brands are generally the most aggressive, due to greater corporate demands to increase sales and larger marketing budgets.)Category: Snacks, carbonated soft drinks, and other heavy-display categories often require stronger creative to make an impact within the competitive retail environment.Shopper demographics: Consumer preferences, which vary based on regional, cultural, age, and gender differences, must be considered when assessing creative appeal.Retail environment: Broadly speaking, channel nuances must be taken into account ("Grab one now" messaging in convenience stores vs. "Stock up now" at supermarkets, for instance). More precisely, the market positioning of a particular retailer and the physical design of its stores come into play.ConclusionMarketers firmly believe that strong creative can increase the sales derived from a retail display program.While there is little in the way of substantiating evidence (in the form of general, industry-wide studies), research conducted to this point finds that the right creative elements can increase sales between 2% and 30% above the level that would have been derived from the display alone (with all other factors, including those discussed in this report, remaining constant).However, the importance of creative elements, especially those communicating consumer promotions, may rest more in their ability to generate retailer support for display programs. That function has an indirect, yet vital, impact on a display's success.While further investigation is required before any conclusions are reached, the information compiled for this report suggests that the use of entertainment tie-ins, sports sponsorships, and other forms of promotional messaging on displays may have little to no direct effect on display sales, but are indispensable in securing the secondary display space (and other forms of retailer support) that will directly increase sales.

Creative Touches

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