Harnessing the impact of advertising

How Lidl became a major player in U.K. supermarket retailing

Ebiquity is a highly valued partner for our marketing team. By combining market leading data modelling with confident, articulate consulting, they have provided us with a deep understanding of the effects of our marketing investments. Their insights help to inform our marketing decisions at both macro campaign level and with more detailed channel investment, format selection, and testing of new opportunities.

Sam Gaunt
Head of Media at
Lidl UK

Practice & Location

Ebiquity Analytics
Office: London

Objective

In the 20 years since its launch in the U.K., by 2014 Lidl commanded a 3.1% share of supermarket sales. During this period, its marketing strategy was dominated by short-term deals and offer marketing. The Media and Marketing teams wanted to understand how they could optimise their marketing investment to change perceptions of the brand and also grow more quickly, using the right messaging and the right creative executions in the right media channels.

Approach

Through a combination of short-term and long-term econometric modelling, we provided Lidl with the rationale they needed to evolve both the messaging and the placement of their advertising. Our analysis identifies sales that are driven by and attributable to advertising, and separates this out from the impact of the increased number of stores – presence and visibility of the brand on the high street – and longer-term brand momentum. It can also isolate the effects of a cluster of other factors, including: competitor activity, price, and changes in Lidl’s range of products offered.

By properly understanding the role and impact of both price-promotional and brand advertising, we helped Lidl to justify and protect an upweighted spend on TV to deliver a mass market audience. We also enabled them to get the balance right between brand building and promotional advertising, with more investment behind TV and radio to drive reach, but less in underperforming channels particularly around digital.

Outcomes

Between 2014 and 2017, brand advertising helped Lidl’s U.K. market share to grow from 3.1% to 5.3%. Our econometric modelling measured the amount of growth driven directly by advertising. We also demonstrated additional growth that was attributable to the long-term impact of advertising on brand momentum.

Positive improvements through enhanced brand perceptions were evident in better scores across the board in brand metrics accounting for "quality", "consideration", and "purchase intent". Over the five years to 2017, profit return on marketing investment increased significantly with the new advertising strategy, with both efficiency and spend increasing. This was achieved through a combination of broad reach advertising (and share of voice), a larger store estate, as well as an optimised channel mix and a new creative strategy designed to tackling misperceptions about Lidl.

Grew market share from 3.1% to 5.3% of U.K. retail in just four years

Established that almost a quarter of all incremental sales delivered directly by advertising

Delivered enhanced profit on return on marketing investment, peaking in 2017

Optimised marketing investment, with right messages delivered in the right channels

Project & Process

Analysed impact of current / proposed media strategies on sales performance

Allocated optimal budget to messaging channel mix to deliver best results

Optimised split between brand building and promotional ads

Enhanced annual budgeting and planning process and cycle with partners