For marketers, tactics often trump brand as companies seek new ways to track and activate short-term sales. There’s nothing wrong with that; we’ve written extensively on the benefits of omnichannel path-to-purchase analytics in this regard. But it does overlook one key point: when investing in communications, a strong, sustainable brand is a critical component in generating long-term sales.
So you just can’t ignore brand. CMOs are recognizing this, according to a report from Forrester, with half now saying they plan to bring brand back as a top . That would be a big change. The current share of market spending for tactical vs. brand is 72%/28%, while an (Field and Binet – 2017). There’s plenty of evidence that the failure to support brand can hurt both short-term sales and the brand itself. For example, an electronics retailer that reduced its above the line spending in brand-related media by about 30% saw sales fall by 9% while the value of brand fell by 18%. An unfortunate result all around.
In reallocating resources in the direction of brand there has to be a plan, and it has to be based on data and an understanding of how brand impacts both long- and short-term sales. That means having well-defined ownership of media and putting in place a platform to continuously measure KPIs, including brand, that allows you to isolate the impact of brand and connect it to long-term sales. Media Mix Modelling (MMM) can be a good tool for this when brand health measurements are associated with media spend to provide insight into the best places to put money to support brand development and sales.
Through years’ of marketing analytics experience, including MMM, we’ve found that some media tend to have greater impact on brand than others – TV and web TV, to name two (where there’s time to tell a story) – while search and banner ads are much less effective. At the same time, short- and long-term strategies will produce a different set of media priorities. But what really matters here is ongoing tracking of the impact of each approach on brand and sales to see which delivers the best results over time. You can’t optimize what you don’t measure.
We’ve done the tracking, and here’s what we’ve found: while both approaches can improve sales, the monetary value of the long-term, brand-oriented approach can be much higher than that of a short-term approach that focuses almost exclusively on activations. Short-term tactics drive online and store sales, but fall short in longer-term, brand-driven sales.
A lot of resources have been dedicated to short-term activations, in part because the result is immediately apparent and easy to measure. The effect of brand is more difficult to capture, but longer lasting. But when you track brand impact more closely it quickly becomes clear that investing in brand works. The bottom line: brand is back.