Marketing efficiency versus brand building: what’s more effective?
Efficiency in marketing has got to be a good thing, right? Well, the truth is, it depends.
Too often, efficiency equals quick fixes, which can come at the expense of brand-building exercises that might be a better long-term solution for your business.
So how should marketing efficiency and brand building work together – and what’s the ideal mix that brands should be aiming for?
Quick fixes – are they effective?
In the digital age, it’s become easy to measure data to demonstrate a return on investment (ROI).
Click-throughs, views, “likes”, mobile app installations and so on are all trackable – and so is the amount of money generated.
Whereas once businesses knew that marketing could be a slow burn, now they’ve come to expect that a return on investment is just one smartphone click away.
Super-fast broadband and the inexorable rise of social media and personalised Google ads have led to this boom in “performance marketing”.
But if a customer buys once then never returns, is this really the best use of a marketing budget?
As Les Binet of adam&eve/DMBB, the ad agency behind the John Lewis Christmas ads, says: “Businesses that put efficiency first are businesses that are heading for disaster. It’s advertising effectiveness that matters most. Only once you’ve got effectiveness should you worry about efficiency.”
Instead, he believes that marketing budgets should be split 60:40 in favour of long-term solutions such as building brand awareness and brand love over short-term direct responses.
What data matters?
The trouble with digital marketing is that it generates so much data it’s hard to see the wood from the trees. Marketers are at risk of jumping on the easiest data to understand, or that which generates the biggest numbers, rather than carrying out any proper analysis.
And while measuring ROI can tell you if a tactic or strategy is generating an ROI, it doesn’t tell you if something else might be even more effective.
Instead, you should be looking at information such as where your customers are coming from; where potential customers might be and how to reach them; and what the lifetime value is for each customer.
Marketing efficiency is, therefore, only the beginning of your marketing strategy. Instead, brands should be making time and effort to understand what data really matters to them, then working out how to maximise their strategy in that area.
Turning efficiency into effectiveness
Although digital does encourage short-term thinking, it doesn’t have to be the problem. It’s more how it’s used that matters.
Libby Chambers of Western Union says that the increase in digital data makes it cheaper and quicker to find out what marketing strategies and tactics work in the long term as well as the short term.
Her brand has used digital marketing to test out strategies and analyse the results. By cutting back what was found not to be working, they were able to invest in what was working and drive growth for the business.
Other companies are also shifting spending towards efforts to build their brands. The Automobile Association, for example, began to invest heavily in direct mail, but then moved its money into mass brand-building.
Others are moving away from digital and investing into the more traditional medium of TV, despite the fact that it’s harder to measure the ROI of such advertising.
ITV reports that its revenues from primarily digital companies such as Google and Uber have risen by 10% in the past 12 months, more than compensating for the decline in revenues from traditional brands.
All of this represents a brave investment in creativity, rather than a blinkered focus on ROI. It involves building customers’ emotional connection with brands, rather than just aiming for an immediate response.
Marketing efficiency will always be necessary. But it’s good to see that the creative, long-term view is also here to stay.
Contact Linney today
To find out how Linney can help your brand drive efficiency and effectiveness in its marketing, contact us today.