There has been much talk in marketing recently about the Long and Short of it, the brilliant research paper published by Les Binet and Peter Field about the optimal effectiveness of marketing. It was published originally back in 2013. Marketers worldwide have been implementing the findings, after a number of case studies have proven its value, and subsequent research by Binet & Field has solidified its findings in a practical sense.
Two speed targeting
This is a school of thought that we completely agree with here at Yard. The concept of a two-speed targeting approach where marketing campaigns are split to individually achieve short-term and long-term goals. Let’s first look at the strategic pillar that most brands are placing tremendous focus on (perhaps a bit too much) at the moment.
It is a universal truth of marketing that in the short term, sales activation tactics, such as paid search, social, email marketing and programmatic, deliver an immediate uplift in sales. The audience for these tactics is extremely specific. They target people at the middle-to-bottom of the funnel. Communications are rational and persuasive, looking to evoke an immediate response.
Over the past decade, we have seen more and more brands invest heavily in this form of marketing, almost to the detriment of a longer-term strategy. What is often omitted when such tactics are discussed is the fact that the impact of this activity decays extremely quickly. There is little to no accumulation of benefits.
That is not to say it’s worthless, of course, it has its place. But here is the caveat, it can only work effectively whilst running alongside dedicated brand-building campaigns. You’d be completely right to argue at this juncture that short-term sales activation marketing is responsible for revenue in the immediate future, but it is the activity that does the exact opposite that will secure long-term profit and therefore growth.
So, unless your brand is only planning to exist for a year or so, then brand building is vital. There’s also actually much evidence now to show that brand building also supports short-term tactics (I’ll come on to that a bit later) so even if you were very much a fan of short-termism, there would still be valid reasoning to dedicate some budget to brand.
Let’s consider what brand-building marketing is. It’s targeting the top of the funnel and, often, those not even anywhere near the funnel yet. It’s growing awareness for people who may not even realise they’ll ever be in the market for your brand. They could be a potential customer three to five years down the line, don’t panic - that’s the point.
To achieve brand awareness, we use emotional communications to create memories. It’s targeting the mass market. It’s broad reach. It’s measured in brand metrics. It is the only type of marketing that reduces price sensitivity and increases elasticity. It’s using integrated omnichannel campaigns, utilising channels that are OOH, ATL and digital. Most importantly, the impact accumulates over time.
Side note here. Often, digital is considered a sales activation medium. There’s some logic in this. Of course, lots of digital channels have advanced sales activation marketing beyond what could have been previously imagined. And yet, online video is one of the strongest methods of storytelling in today’s market and very much a vehicle for brand building.
Digital PR and organic search also have a role to play, among others. As previously mentioned, campaigns should be integrated and use a variety of channels and tactics. The important point is that there needs to be both sales activation and brand building working together to create balance and synergy.
The 60-40 rule
What that balance looks like for your brand depends on a number of factors including sector, nature of the purchasing decision, pricing strategy, the life stage of the category and the size of brand. A general rule applies across the board. If brand building is easy for your particular brand context, then focus should be placed on sales activation, and vice versa. Perhaps that feels counterintuitive for many marketers. But keep the idea of balance in mind. Let me illustrate two examples to explain further.
When a brand is new, brand building is pretty easy. Everything you do is raising more awareness than there was previously (because it didn’t previously exist). This is an example of where the majority budget should be tipped in favour of sales activation. Research from the IPA databank suggests 56% of budget should be spent on sales activation. Making it easy to buy is key here. Brand metrics will ramp up naturally during this period.
Whereas when brands get bigger, sales activation gets easier. Big, established brands have wider distribution and a more solidified customer base. That means in order to maintain market dominance, more brand building is required. Leaders in this situation, spend 76% on brand building with 24% on sales activation.
If we consider all sectors across the board, we see an average split of 60-40, hence the rule.
|Sector||Optimum ratio (Brand:Activation)|
But critical here is that the split employed is relevant to the context of the brand in question. It differs whether you’re in a highly researched category (do you appear on price comparison sites, for example), whether you sell purely online, if you’re an innovative product or service or a subscription service. All of these factors impact how budget should be split between brand building versus sales activation to achieve optimal effectiveness.
Regardless of your situation, you’ll see that there is no sector in which brand building is less important. It’s not a subjective viewpoint. It’s based on research of over 990 campaigns, 700 brands and 80 categories.
Perhaps the best visualisation I have seen to illustrate the point is this one (slide 2).
We can see from the line curve that not enough brand building is far worse for business effects than too much. To note, this is an average across all sectors. Spending upwards of 60% on brand building may result in a 20% loss in effectiveness, but brand remains strong. Whilst spending too little can not only cause a 56% loss of effectiveness, but brand is also weakened. This in turn will also impact sales activation activity.
Digital brand building
It doesn’t take a genius to work out that if people are aware of a brand, it makes sales activation activity all the easier. If you see an ad on Google whilst searching for a generic term, receive an email with a discount code for a household name that you recognise or are targeted with remarketing, being aware of the brand promoted makes you more likely to click on it. And therefore, we firmly back the thinking that brand building supports activity throughout the funnel. There are also some numbers to back us up on this.
In digital channel terms, we map it out like this:
When devising a strategy for clients, we take their current marketing plan and plug it into a number of mapping visuals. It allows us to clearly see how much weight they are giving sales activation versus brand building. It helps us identify gaps and means we can guide the recommended budget split for an organisation of their type. We continually update these visuals and present them frequently so the client can clearly see how their marketing is evolving and the results that go along with this balanced, two-speed growth approach.
There’s much more I could write on this topic. But if you’ve made it this far, I reckon you’re doing pretty well. If you’ve got any questions on this strategic approach or would like to know how your brand specifically should be splitting its budget to achieve optimal effectiveness, I’d love to hear from you, firstname.lastname@example.org.