As economic uncertainty has many businesses tightening their belts, one area particularly prone to budget cuts is branding. But brand building will always be a key driver of long-term success.
We spoke with Tom Roach, VP brand strategy at global digital agency, Jellyfish, and Dr. Grace Kite, business economist and founder of data consultancy, Magic Numbers, to understand how marketers can encourage brand investments in times of uncertainty.
Two circular headshots in black and white, with accompanying names, job titles and company. On the left: Tom Roach, VP Brand Strategy at Jellyfish. On the right: Grace Kite, Economist and Founder at Magic Numbers.
Mark Howe (MH): To start, how have your perspectives on branding changed in recent times?
Grace Kite (GK): “Traditionally, the majority of research around brand building has been based on award winners, such as those recognised by the Institute of Practitioners in Advertising (IPA). We’ve long known that for these top campaigns, brands could expect to see a £9 return for every pound they invested in their advertising. But not everybody can aspire to win such an award. What if you sell toilet paper or have a limited advertising budget?
“To come up with a number that would relate to more than just a fraction of the advertisers out there, Magic Numbers, who specialise in marketing mix modelling (MMM), collaborated with six other specialists in that area to put together a database of hundreds of econometric evaluations. We found that even unawarded brands can expect to see £3.80 for every pound they invest in branding.”
Tom Roach (TR): “For me, moving from a creative background into a more digital role has really hammered home how important it is to get your short-term and long-term advertising as connected and integrated as possible. Brand building and sales activation can get very siloed and there is money being left on the table when that happens. Particularly when it comes to video and social media, you need the flywheel effect (creating momentum to amplify individual activities) to maximise the value as much as possible.”
MH: £3.80 for every pound — that’s a great stat to bring to your CFO. How else do you recommend agencies and CMOs can make a case for branding investment in the current economic climate?
TR: “Ultimately, branding is about building memories and associations in people's minds to increase the likelihood of getting chosen once a consumer enters the marketplace. Research consistently points to the fact that cutting your advertising budget will see this mental availability of your brand decline. Being less visible will let in the opportunity for your competitors to get more salience and awareness.
Research consistently points to the fact that cutting your advertising budget will see this mental availability of your brand decline.
“But you have to be specific and nuanced in your approach. Some of these businesses are having to cut staff, so just defending branding without considering that would be insensitive. You need to understand what the real context is around your brand and your category. If there just isn’t very much demand for your products right now, you don’t want to push lots of short-term sales activation.”
GK: “If you want to speak to a CFO or CEO about any kind of investment, you have to show how the benefits outweigh the cost. And this is different per category as not all industries bounce back in the same way once the economy starts recovering.”
MH: Finally, what can marketing professionals do to better measure the impact of their brand investments, especially at a time when budgets are tightened?
GK: “Marketing mix modelling really is the way to go here. And, luckily, that is a lot less heavy duty than it used to be. You had to really put time aside for it back in the day, but thanks to the wealth of online data available it’s much easier and less expensive now. And particularly when organisations are counting every penny due to budget cuts, it’s the most accurate way to establish whether the money you’re spending is actually worth it.
“There is also real value in watching the right metric, such as your ‘share of brand search’, and seeing if it moves once your campaign goes live. But that really depends on the industry. It works better for retailers than for our finance clients, for example, as the nature of retail is more transactional.”
Marketing mix modelling is the most accurate way to establish whether the money you're spending is actually worth it.
TR: “Measuring how marketing activities impact the strength of your brand is always important, not just when budgets are under pressure. People often think it’s hard to see the impact of upper funnel tactics, but if you take that view, you’ll be locked into only ever chasing short-term metrics like ROAS. This can be a damaging route that ultimately leads to brand decline instead of growth.”
This is an extract from a fireside chat that was recorded for Google Northern Europe.
Source: thinkwithgoogle.com
