Don’t Short-change Your Brand: The Case For a Return to Brand-building

January 28th, 2020 | Laura Baehr, VP Marketing, thinktv

people on building under construction

There were many prominent themes in the marketing industry in 2019 – data privacy, AI, and social responsibility among them – but the concept set to have the biggest impact on marketing plans and creative choices in 2020 is the return to brand-building (and the shift away from short-termism).

Advertising effectiveness experts Les Binet and Peter Field were the first to introduce the now ubiquitous “60/40 rule”: To be effective, a brand should spend roughly 60% of its media budget on long-term, brand-building activities, and 40% on more targeted sales activations.* Their research also led them to the following conclusion: Short-termism is undermining advertising effectiveness. As the incidence of short-term campaigns has increased, advertising campaign effectiveness has steadily fallen.

Short-termism leads to imbalance & ineffectiveness

Activations can be highly effective, and even efficient – in the short term – at evoking an immediate consumer response; however, they don’t lay the groundwork for long-term growth or profitability.

Les Binet on the power of brand-building:

“if you want long-term growth, you’ve got to change people’s minds in some way. You’ve got to build up memory structures that will bias their behaviour into the future, and that’s a difficult and long-term job, because it involves training people’s responses in such a way that you not only influence behaviour now, but you also influence behaviour next week, next month, and into the future.”

While it’s true that the balance can tip too far in either direction, putting too much weight against brand-building can be rectified almost immediately with sales activations. Putting too little weight against brand-building, however, has such a devastating impact on the brand (and sales) that it can take years to correct. Cautionary tales from brands like Adidas and Old Navy show this in action: Both companies admitted that they invested too heavily in digital, short-term tactics, to their detriment, and are now moving back to brand-building campaigns on traditional media like TV.

Why short-termism is so destructive

Brand-building, the bonus round

In addition to driving long-term brand preference and sales growth, brand-building activities are also very effective in the short term: A strong brand will reduce price sensitivity, increasing margins; it can also have a substantial impact on the effectiveness of any short-term promotional campaigns. Binet says that according to their research, “if you do strong brand-building, short-term metrics will go up for your activation.”

Our goal at thinktv is to help marketers get the most out of their media dollars by getting the most out of television. To that end, we stand with Binet and Field in encouraging marketers not to short-change their brands by putting too much emphasis and budget on short-term activation tactics. Instead, they should put appropriate weight behind the brand to ensure long term growth and profits. As Binet and Field make clear, “penetration is always the main driver for the growth of all brands and ‘mass marketing’ – broad reach – is still key to growth.”

And that’s where TV comes in. While television advertising can be highly effective for activation – the medium’s ability to share promotional offers widely and quickly remains unsurpassed – it’s especially strong as a brand-building tool. Nothing beats a 30-second, sound-on, emotional video message on a platform with such a broad and engaged audience. Except, maybe, a 60-second one.
 

*For more on the balance of brand-building and activation check out Binet and Field’s publications Effectiveness in Context (Oct 2018), Media in Focus (2017) and The Long and the Short of it (2013), or watch three excellent Peter Field presentations on the thinktv website.
 

"It's interesting to note that the tech firms seem to be leading the charge towards brand-building. Companies like Google and Amazon have spent 20 years building up long runs of performance data, and they're the ones who are now piling back into traditional ad media like TV. The rest of the marketing community should take note." - Les Binet
 

Laura Baehr
Laura Baehr, VP Marketing, thinktv

Baehr is a senior marketing and broadcast executive with a passion for brands, television and compelling advertising. Before joining thinktv, Baehr held a number of senior positions at Corus Entertainment including VP Client Marketing, where she was responsible for leading integrated marketing solutions across all Corus networks, and VP Head of Networks, where she led marketing and strategy for the Corus Kid and Family properties, including YTV, Treehouse, CMT and ABC Spark.