As you know, Pointlogic provides a portfolio of systems and methods to help clients allocate budgets across a number of media. Yesterday I was demonstrating one of our tools and, as in many such demos; I was asked how we deal with synergy. As this is such a significant area, I decided to write my thoughts on this topic.

I like to think of advertising and marketing communication as creating value for the brand with individuals. If John sees an ad on television then something is wired in his brain that leads to value creation, let’s say the value created is $1. If Jack sees an ad outdoors then again there is some value created, let’s say this value is .75 cents. The question behind synergy is what is the value added when Joe that sees the ad on both television as well as outdoor. If the value is $2 then there is a positive synergy, if the value is $1.75 then there is no synergy and with less value there is a negative synergy (or cannibalization).

Understanding synergy is crucial if the value created is only measured in sales (as in most marketing mix models). These models could show sales uplift that we can contribute towards TV, an uplift that we can contribute towards outdoor and an additional uplift that we can contribute towards the combination – the synergetic effect.

So far so good. However, in our research methods like Compose or M3 we look at synergy slightly different. This is because sales are not perceived as a result of advertising but instead as a result of perception changes. Think of it this way, perhaps someone is much more likely to buy a certain mobile provider if they (a) like the brand, (b) understand the pricing, and (c) believes the carrier provides excellent client services. If the TV ad delivers on likability of the brand and shows the pricing and promotions while the outdoor ad delivers a positive perception towards the client services than we’ll see a positive synergy of TV and outdoor towards sales (even if there is no synergy towards the underlying three attributes). Simply put, there is no need for synergy between the media TV and outdoor, instead there is a synergy between the underlying drivers of sales. If someone likes the brand and understands the price the value creation could be $1 and if someone believes the carrier provides excellent client services the value creation is .75 cents. However, if you’re successful on all three drivers the value creation could be $2 (independent on the media that delivered the perception).

I do believe there is synergy between media, for example, seeing a brand across multiple sources could help the perception of “big” (they’re everywhere so they must be big) and other attributes. But this kind of synergy is dwarfed by the much larger effect of different media having a different role to play.

For Pointlogic this means that we strongly endorse looking at synergy based on actual creative executions – synergy is so much more about the actual creative than it is about some mysterious effect of multiple media. For sales models we have to translate media executions to sales and then we include synergy. If Pointlogic is a part of the research design – as in Compose and M3 – we normally recommend including underlying attributes that lead to sales so that synergy can be looked at from the perspective of the roles of the different media.

Yesterday I compared synergy with the situation of a football (i.e. soccer) team. To optimize the chances of winning games you need defenders and strikers. Is this a synergetic effect between defenders and strikers? Probably not, it’s simply that you need both roles to win games!