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Balancing Act- Driving Sales Today and Generating Demand Tomorrow

Balancing Act: Driving Sales Today and Generating Demand Tomorrow

Dixit Sapra

Director, Brand & Communication

Kantar

Dixit.Sapra@kantar.com

Balancing the short-term benefits of Performance Marketing with the long-term work of Brand Building is how sustainable and profitable brands grow.

Perennially, valuations of BrandZ™ Top Brands demonstrate that strong brands generate superior shareholder returns, are less susceptible to economic downturn, and recover faster from any recessionary impact. And according to Kantar’s recent “Getting Media Right” study, over 90 percent of advertisers recognize the importance of balancing short and long-term strategies.

However, only half of the marketers are confident they have the right balance today, and agencies and media companies are no different. Pressure to deliver quarterly results continues to create a fallacy of growth in the short-term, but this often comes at the expense of building long-term brand profitability. It puts pressure on brands to continually appeal to a pool of existing buyers with a higher degree of promotional tactics and lower marketing efficiencies – while missing the opportunity to unlock true growth potential for brands.

Understanding Short-term vs. Long-term

There are two ways to sell things. We can send out marketing activity that evokes an immediate response – in other words, what’s known as trade activation. Trade activation doesn't require building up long-term memories, or doing much to change people's minds. It's just about evoking a response - and that can be a highly profitable and efficient thing to do!

But if we want long-term growth, what we have got to do is change people's minds in some way. We need to build up memory structures that will bias their behavior into the future. That's a much more difficult and long-term job, because it involves training people's responses in such a way that not only influences behavior now, but also influences behavior tomorrow, next week, next month, next year, and on into the future.

Brand Building is about building up these mental structures - but, crucially, it's still about behavior. In fact, Brand Building is about securing a long-term flow of sales, revenue, and profit – now, and into the future. Activation, on the other hand, is focused solely on immediate response: ideally a sale, but maybe nothing more.

Best of Both

We have observed that marketing levers that build brand equity and produce sustainable long-term effects are generally different from those that drive short-term effects. Although some long-term marketing efforts produce some short-term effects, the reverse is not true:  it should be noted that an accumulation of short-term effects does not translate into higher long-term brand affinity and profitable growth potential. Therefore, it is critical to understand how the long-term effects of advertising work, and how they can perform in tandem with short-term efforts.

Really smart marketers build their brands according to a long-term strategy, and activate this strategy efficiently. Building a brand over the long-term means building up a preference for the brand - and then activation converts that preference efficiently into cash. We need to do both jobs because each enhances the other, and you need to do them in balance.

This balancing act requires marketing leaders to address ROI measurement and marketing budget allocation in a more holistic manner. Understanding the dynamics of how various marketing channels generate short and long-term sales growth is a necessary first step to deploying the right mix of brand building and performance efforts. It also enables marketers to demonstrate this delicate balance to financial teams and executive leadership, and ultimately to be more successful in allocating their budget to enable growth. This requires a “Total Marketing ROI” approach to optimization.

In conclusion: Please do continue to deliver fact-based marketing. But please, give just as much weight to the long-term as to short-term decisions. And ask yourself: Do you have the right data and right prediction models to do this?