Advertising for the Long Term

Oct 25 2013

For those who want to understand how to make their marketing campaigns effective, there is no better read than The Long and the Short of It by Les Binet and Peter Field last year. The 80 page booklet is a clear and easy to read summary of a high amount of analysis, covering almost 1,000 campaigns and 700 brands across 80 categories over 30 years (although the focus is on the last 10-12 years). Their analysis can be summarised by the Peter Drucker quotation they use on the first page of the report, “Long-term results cannot be achieved by piling short-term results on short-term results.”

Their overall conclusion is that too strong a focus on achieving short-term results undermines long-term performance (and vice-versa), and that this also applies to the metrics that are used to evaluate success (including market research approaches). They especially point to the metrics used in the digital world, which are focused purely on very short-term responses “with questionable metrics often bought with short-term incentives”. The way marketing works and should be evaluated depends hugely on the relevant timescale.

The report is sprinkled with many conclusions and recommendations. I will focus on five key themes.

Support volume and price

Campaigns that report large profit gains are those that support both sales/share and also price. In their analysis, campaigns that support neither of these report are highly unlikely to report large profit gains and approximately one third of those that focus either on volume or on price report large profit gains. However, campaigns that support long-term increases in volume and price are more than 80% likely to report very large profit gains. Further analysis shows that this can be achieved by combining brand campaigns with direct campaigns (‘sales and saleability’ as they term it).

Talk to everyone

The report shows clearly that broad effects and big paybacks come from targeting all prospects (with long-term brand building), while focusing on existing customer base or niche targets usually leads to narrower effects and smaller paybacks (as Byron Sharp has previously shown in How Brands Grow). The number of large effects seen from campaigns can be best achieved by targeting the whole market and to a lesser extent new customers. However, targeting the whole market leads to far higher efficiency in building extra ‘share of voice’, a key driver of brand share.  By contrast, focusing on existing customers has much lower impact and efficiency.

Pull the emotions as well as push behavioural buttons

The report writes in detail about the importance of emotional priming, building emotional brand associations in System 1 as well as pushing rational product and pricing messages through System 2 (in the language of Daniel Kahneman and Brainjuicer). While rational messaging can bring short-term sales uplifts, it leaves brand perceptions unchanged and do not contribute to any long-term increases in sales (beyond six months). Emotional priming works differently, making brands stronger over time and leading to long-term volume increases and reduced price sensitivity (if given enough time, and the longer the better). Emotional campaigns also have longer lasting effects, having a multiplier effect on profitability (through driving volume and pricing).

Be famous

Fame campaigns work much more efficiently than other campaigns by inspiring consumers to share their enthusiasm with others, creating buzz. Such campaigns have a very striking effect on profitability, creating multiplier effects on volume and pricing (consumers are especially prepared to pay more for brands that others are talking about). Such campaigns typically rely on surprise, so may lose their potency over time. They are also typically associated with strong emotional responses. Such campaigns often appear less effective than more rational ones when evaluated over short time periods (less than six months) but in reality bring much stronger long-term effects.

Balance the short-term and the long-term

Despite the above, scale still matters and brands with a share of voice greater than their share of market tend to grow. Binet and Field’s advice is to integrate (meaningfully) brand building with activation, which can lead to larger brand effects, business effects and overall efficiency than either branding or activation alone. They argue that the right balance is around 60% branding and 40% activation. This is a rule that hasn’t changed over time, although in the digital age there are many who would evangelise for a shift away from brand building channels (with little evidence to support such a strategy).

All the above lessons also apply to how campaigns are researched. Short-term metrics cannot accurately measure long-term brand building effectiveness and may provide misleading direction. Indeed many have argued that current paradigms of advertising research work against highly creative and emotional advertising because of their focus on rational metrics (which is why the famous Cadbury ‘Gorilla’ spot failed pre-testing).

Anyone interested in advertising should take the time to read this report and consider its findings. In a world ruled by the short-term, its good to see clear arguments and evidence of the power of long-term thinking.

REFERENCE

The Long and the Short of It: Balancing Short and Long-Term Marketing Strategies by Les Binet & Peter Field

How Brands Grow by Byron Sharp

Seducing the Subconscious by Robert Heath

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