The Balancing Act of Sustainable Brand Investment Wins
Director of Analytics
Analytics Commercial Lead
Marketing investment is a topic that often leads to arguments between CMOs and CFOs. The latter typically look at the short-term performance of these investments, while marketers want to invest in long-term brand equity.
In reality, financial performance and brand growth are not mutually exclusive. They can work together harmoniously and require a balancing act between performance marketing in the short term and brand building in the long term. Brands that get this right remain both sustainable and profitable, and deliver greater equity to their shareholders.
Over and over, BrandZ™ data demonstrates that strong brands that generate superior shareholder returns are less susceptible to economic downturns and recover faster from them. Kantar data also shows that brand is a multiplier of ROI that significantly amplifies the impact of media investment on sales. On average, all media investment accounts for around 13 percent of sales today, however, when we take into account sales driven by brand, the impact of media spending rises 28 percent.
According to Kantar’s recent Getting Media Right study, most advertisers, agencies, and media companies recognize the importance of balancing short- and long-term investments, but only half are confident they have the right balance. This balancing act is challenging as it requires marketing leaders to address ROI measurement and marketing budget allocation in a more holistic manner, while staying aware of key aspects of sales performance.
Consequently, understanding these dynamics is essential to assessing the brand’s overall marketing effectiveness. Marketers need to know which levers drive immediate sales, which build long-term equity, and which maintain baseline growth with the ultimate goal of optimizing the marketing mix to generate sustainable growth.
Some key questions to ask yourself as you start your journey to balance performance marketing and brand building:
- What are the trends in short-term marketing activities driving sales vs. baseline sales?
- Are baseline sales growing at the same pace as incremental sales?
- Is the brand’s equity growing among consumer segments that are key for future sustainability?
- What are the marketing touchpoints that can help grow brand affinity among these groups?
- How can we amplify their impact through earned and owned media?