The Funny Thing About Profit

The Aotearoa Effectiveness Database

The Aotearoa Effectiveness Database brings together insights from Effie Awards Aotearoa entrants surveyed since 2022, helping us better understand what drives marketing effectiveness.

The Funny Thing About Profit is the second report drawn from the database, following Future Demand in Action in 2024. Written by James Hurman, author of Future Demand and The Case for Creativity, it explores the characteristics of advertising associated with profitable growth.

Key findings from the Aotearoa data

New findings about the kind of advertising that creates profitable growth.

Many campaigns have grown long-term sales. But only some of those also grew profit. So what separates those from the rest?

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Whether the work was funny

Among campaigns that grew, 75% of the funny ones also grew profit, against 42% of the rest - a 33-point gap, and the only variable that survives every control we put on it. Behind humour sit executional craft and having a recurring brand character.

The mechanism is pricing power

The ability to charge more, or discount less. It lifts long-term profit incidence from 15% to 46%. Of the six brand metrics we track, only pricing power and brand preference independently predict profit.

Pricing power works on growth rather than instead of it

Among campaigns that grew, it takes the chance of profit from 46% to 74%. Among those that didn't, the same multiplier applied to a 4% base only gets you to 11% - three campaigns out of 28. Growth is what gives pricing power something to work on.

Pricing power has a very clear recipe

Build a character. Be funny. Put it on television. Target the whole category rather than your existing buyers. Make it beautifully. And run it long.

Some things never get you there

Sales activation produces a short-term effect 87% of the time and pricing power 19% of the time - excellent at the job it's hired for, and that job is not margin. Not one of the digital or social-led campaigns produced a very large pricing effect at any budget.

The combination of TV and Out of Home advertising is the #1 media predictor of pricing power and profit

Together they create an effect that is far beyond the sum of their parts.

Explore the full report

Download The Funny Thing About Profit to explore the full findings from the latest interrogation of the Aotearoa Effectiveness Database.

This report is made possible by the support of

Download the full report

Previous Report from the Database

Read the first report from the Aotearoa Effectiveness Database, Future Demand in Action.

Future Demand in Action

New Zealand effectiveness evidence showing how media and creative choices influence both immediate results and long-term growth.

Read Future Demand in Action