Time to get out of the weeds
Posted 19 September 2017.
By Paul Head, CEO Commercial Communications Council
In an interview published in Marketing Week very recently, internationally renowned marketing professor Mark Ritson was asked what he believes are the biggest challenges facing marketers.
His response: ‘tactification’. “We are obsessed with execution and specifically communication,” said Ritson. “Too many marketers are not just strategically negligent, they don’t know the difference between tactical execution and strategic planning.”
I think he’s right. We’ve got lost in the weeds; too many of us are focused on short-termism, campaign optimisation and ROI. And while this all matters (probably) and makes for an easier conversation with the CFO when it comes to reporting time, it’s not particularly strategic. This is true whether you sit in a marketing department, an agency or somewhere else in the marketing value chain.
And it results from constant pressure on marketing departments and agencies alike to be “more efficient” rather than more effective. This creates a situation where marketers are focused on the too-near term in their businesses, instead of building powerful brands that can command a premium, maintain loyal customers, attract new ones and grow the business bottom-line in the long term.
For many businesses, brand is the most valuable asset they have, whether it’s on the balance sheet or not. Yet it is very often managed and invested in on a short-term time horizon. This is counter-intuitive and in direct contrast to how businesses plan investment and capital expenditure when it comes to their other assets. Building a new distribution centre is something that is planned carefully, funds are set aside, protected and the asset is invested in on an ongoing basis. Whilst this may seem like a simplistic analysis, I believe the principle is valid. All too often we fail to treat brand the way we do other significant assets in our businesses.
As marketers, we need to challenge this paradigm, but in a data-driven and rational marketing world it takes bravery to do so.
The good news is that there is a rapidly growing body of evidence from leading marketing experts such as Peter Field, Les Binet and others that a focus on short-term tactical is not only short-sighted, it’s also doing harm to brands and business profitability. Peter Field’s work clearly demonstrates that the focus on short-term tactical campaigns, driven by digital over the past decade, has actually had the effect of making campaigns less effective and eroded profitability for businesses. By contrast, businesses that invest in long-term brand building are significantly more likely to grow overall profitability (as opposed to campaign ROI) than those that don’t.
Based on thousands of international marketing case studies, Field’s latest work suggests that an ideal mix might be to spend 60% of budget on long-term brand building and 40% on tactics and activation. Whether the ratio is exactly right for every business is questionable, but the evidence for a much stronger focus on brand building is becoming compelling.
Our challenge as marketers is to get out of the weeds and start to think strategically again. These could well be challenging and uncomfortable conversations to have with your CEO or CFO but we’re seeing evidence of this globally, with multi-nationals like P&G stating publicly that they over-targeted and plan to invest more in brand building. When the world’s leading marketing organisation admits that it got it wrong, it’s time for us all to sit up and take notice. Local marketers who lead the charge in this will reap the benefits of first mover advantage.