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Optimising investment strategies to drive brand growth

John Cucka

Business Intelligence Director



Using smarter data
Optimising investment strategies to drive brand growth

Peter Drucker, the “father of management thinking”, wrote that businesses only have two purposes: to make customers and to innovate. Marketing and brand underpin both, and at a time when brands are swamped with data, and often struggle to learn from it effectively, it's in the integration of data where the most powerful strategies for growth may be identified.

When “big data” is filtered, contextualised and optimised for insights it becomes “smart data”. By 2022, the global smart data market is expected to grow by 14 percent and predictive analytics by close to 23 percent. This reveals the incredible potential of brands to use real-time data to make more informed decisions, both to innovate and to grow.

Marketers analysing smart data should bear in mind three things:

  1. Not all brand growth is created equal

Historically, we’ve looked at data as through a rear-view mirror, assuming that the future will look like the past. But smart data directs us towards being able to predict a trend before it happens, to achieve maximum benefit.

Individual-level behavioural data shows what people actually buy rather than what they claim to have bought. This gives us deep insight into how consumer brand-decisions work.

We’ve learned that for half the world’s FMCG brands, at least 50 per cent of their user base is entirely new every year. It is only by acquiring more users than they lose that brands may grow – like refilling a leaking bucket.

But although acquisition is central to growth, the best strategy varies by brand and category, whether you are a big or small brand, and whether your category is a more or less frequent purchase. Tailoring your brand strategy to this context yields on average 45 percent greater growth.

And although the strategy may differ, brand equity is always a component. The best recipe for growth is to start with a brand difference that is meaningful to consumers, and see brand salience – coming quickly to mind when a customer thinks of a category – as a multiplier of success derived from brand equity.

  1. Data integration shows ROI from long-term brand investment is as good as short-term sales ROI
    Sales targets are built over quarters, but brands are built over years. Traditional measurements of marketing investment focus on what can be explained in the short term; yet marketing investments have long-term effects. And brand marketers know this. Kantar studies show almost half of advertisers focus primarily on short-term measures of advertising success, yet 80 per cent know they should also track long-term effects.

Brand leaders need to demonstrate that marketing delivers short and long-term sales ROI, because over that longer period, the impact of brand equity is also measurable. Our studies reveal brands decreasing their advertising budgets decline on brand equity and as a result lose market share. A more complete picture of marketing ROI provides a clearer understanding of current and future brand growth drivers, and helps optimise future investments.

This approach requires a combination of tools and data to build models that quantify the link between brand equity and sales with marketing investments. And these learnings cascade into deeper ones. For example, once you know which brand perceptions and metrics drive base sales, you can apply cross-media results to ascertain how different media drove those perceptions – quantifying the long-term impact of media on sales.

  1. Brand equity is equal to customer experience

We worked with a travel brand seeking insight into how to invest between brand building and customer experience initiatives. By integrating their brand tracking data with their customer experience tracking data, and building an econometric model of sales over time, we quantified the marginal influence of both changes in brand equity and changes in customer experience against future sales.

Critically, we found that brand and CX were equally influential on sales. And the combined data allowed us to identify where in the customer experience generated the greatest ROI. This informed development of training for frontline staff.

Smarter data gets you closer to the heart of your customer. The future of brand has never been clearer: from how to grow brands, to the importance of long-term brand building, to evaluating brand building against other business functions – and that future is bright indeed.