Long-Term Branding Improves Short-Term Sales

Binet and Field, the torchbearers of marketing effectiveness, have shared new research on the importance of context in an ecosystem where collaboration is also key.

Addressing delegates at this year’s EFF Week conference, the respected duo behind The Long and the Short of it sought to build on one of its key tenets: that 60% of a brand’s budget should be allocated to brand building, and 40% to sales activation. “Brand building works in the long-term and also makes the short-term activity work better, stated Binet, who stressed the need for marketers to rebalance their current strategies.

Brands selling themselves short

With marketing departments under huge pressure to deliver accountable returns on marketing investment, the relative complexity of measuring the effectiveness of long-term brand building activity has seen many businesses devote an unhealthy focus to short-term, quantifiable sales. Yet this risks undermining creative quality, brand values and consumer trust – all crucial to the long-term welfare of a business.

Key to moving away from this short-term cycle, argue Binet and Field, is the notion that advertisers should dedicate more investment to media channels that are effective at building brands, the likes of which are increasingly measurable. Context is also important, however.

The sector a brand is in, its size, its price positioning, the type of purchase it centres on (subscription, e-commerce, offline), the life-stage of its category (is it an established or emerging market; is it declining or low-growth?) and the extent of innovation it depends on are all factors in ascertaining the right ratio between long-term branding and short-term sales activation. Ultimately, there is no one-size-fits-all magic bullet.

Five rules every brand should adhere to

There are five universal rules that apply to all contexts, though:

• Brand building is key to all companies. It creates mental structures that pre-condition customers to choose their product or service. Without it, the effectiveness of any short-term activation activity is blunted.
• Sales activation is also a key ingredient of any marketing campaign. It delivers behavioural stimuluses that prompt customers to act. It’s strengthened by brand building, and boosts campaign efficiency.
• The optimum balance will differ from brand to brand, subject to the context and difficulty of implementing each side.
• Key to this balance is whether a brand depends more on emotional or rational considerations. Brand building typically drives the former, while sales activation is often rooted in the latter.
• Penetration is crucial for brand growth. Maximising this is imperative and requires both sides.

An open and collaborative overhaul is required

Further research by the IPA shows that, currently, only 40% of marketers agree that their company is prioritising having the right combination of resources to support the effectiveness of their marketing strategy. With only 63% of agencies claiming to have access to the sales data of their clients, and just 46% having access to their clients’ customer tracking data, the need for greater collaboration in order to boost effectiveness is clear.

Establishing a culture of testing and learning, creating a more open relationship between all collaborators, and heightening board level commitment are each regarded as key to accelerating marketing effectiveness. And with a mere 14% claiming to have planned campaigns scheduled for the long-term (1-3 years campaigns,) there’s plenty of room for improvement.

Find out how Guerillascope can help you find the perfect balance – get in touch today.