How Finding The Right Marketing Strategy Can Bring You Disproportionate Rewards
The last 6-months has seen the release of some great books on marketing and advertising but if there’s one that’s been the most revealing it’s a publication from Les Binet and Peter Field; Effectiveness in Context. It identifies some of the biggest challenges brands face in the digital era and some of the considerable opportunities available for brands looking to buck the current trends.
To understand these trends, it’s sometimes best to start with the problems that created them. So, what’s the biggest problem in marketing today? According to Binet and Field, “Short-termism is again, in many ways, the mother of the problem.”
In marketing, short-termism takes the form of sales activation. Today, there’s a heavy bias towards sales activation over brand building, usually under the rationale that it’s a data-driven decision. Specifically, because we’re able to show that we get a better ROI using certain channels and activity as opposed to others where it can be harder to measure.
However, as Binet notes it’s, “equally important to understand [that] media with smaller budgets [will] always have higher ROIs than media with big budgets. But they also have correspondingly smaller effects.”
So, media such as TV is highly effective, generates large profits and has a good ROI whereas online media has low effectiveness, generates small profits but has a high ROI. With ROI currently being held in higher esteem, the current trend in marketing has therefore been to choose efficiency over effectiveness.
Of course, there’s absolutely nothing wrong with having a marketing plan that’s supported by data and looking to get the best value out of the marketing investment. But that data should be used as evidence to have a better understanding of the big picture, not just the smaller ones.
As part of that big picture, Binet and Field look at the two broad ways that marketing works; brand building and sales activation:
“Brand communications create enduring memory structures that increase the base level of demand and reduce price sensitivity. Sales activation triggers these memories and converts them efficiently into immediate sales.”
So, the money is in the memories. With this in mind it’s important to view your brand as a long-term investment and look at how short-term and long-term activity can be optimized to work together.
“Brand building and sales activation are not choices or alternatives – they are mutually interdependent and both are essential to long-term success.”
Binet and Field have developed what they call the 60:40 Rule, as a guide to the ideal brand:activation activity split. This can be further refined and optimized when taking into account specific considerations for the brand, which is where context comes into play.
The 6 aspects of context that influence effectiveness are:
How people choose brands (e.g. low or high consideration)
How people buy brands (e.g. online or offline, subscription or series-purchase)
Brand Pricing (e.g. relative price position)
Innovation (e.g. no innovation vs any innovation)
Category Development (e.g. new, growth, mature or declining)
Brand Development (e.g. market share = niche, small, strong challenger, brand leader)
Whilst we won’t go into greater detail here, these are the factors that will help you to pinpoint your brand’s ‘sweet spot’ for a brand-building and sales activation mix.
Ultimately, one of the big takeout’s from this study, given the current state of marketing, is that if you include the appropriate level of brand-building activity in your marketing mix it will bring strong growth and often disproportionate rewards for most brands.
If you’d like to discover what your brand’s optimal marketing mix looks like contact email@example.com to set up a meeting.