The Problem With Short-Term, Sales-Led Advertising

10:25 AM, 5 March 2019

Why businesses need to think beyond the ‘now’ if they want real, long-term growth

The Commercial Communications Council (Comms Council) has recently released ‘Why Aren’t We Doing This? - How long term brand building drives profitability’, a book written by UK strategist, Peter Field.

The book addresses a common issue we’ve seen within advertising, not only in New Zealand but around the world. Marketers and business leaders are overvaluing short-term, sales-led advertising and undervaluing long-term brand building.

The issue in focusing on the ‘short-term’ advertising is that businesses are forgetting about their brand, and consequently, negatively impacting their long-term profitability and business growth.

“Long-term results cannot be achieved by piling short-term results on short-term results.”

- Peter Field

This book comes at a time of massive disruption in the industry, forcing advertisers to constantly re-evaluate every aspect of their business. Despite all this change, Joan Withers says in her forward of the book, “it’s clear that investing in a consistent brand presence continues to deliver huge advantages.”

Today, 40% of New Zealand’s advertising money is spent on digital alone, signifying a huge imbalance in the media and advertising spectrum. The data shows us that when this imbalance happens, significant losses of effectiveness occur. Why? Because businesses are not building their brands to drive long term growth.

What are the effects?

This idea is not just an opinion of the few, the evidence proves it. The data from this book is drawn from the effectiveness database of the UK Institute of Practitioners in Advertising (IPA). The data is not limited to the UK, it is global, with case studies coming from around the world, including New Zealand.

So what does the data show?

  • Short term vs long term advertising. The data collected showed that businesses that shift from long term brand building to short term, saw less effectiveness in their marketing. Essentially, it means that what works best in the short term is the opposite of what works best in the long term. This means less long term profitability and slower growth.

  • Branding affects pricing. When businesses abandon branding to drive short term sales, they reduce pricing, the data shows. This isn’t unique to one area or type of business, it is played out on a large, industrial scale. Investing in branding has shown to have a positive effect on profitability. The chart below shows that as key brand metrics – such as awareness, trust and differentiation – grew, so did pricing power and profitability.

  • Finding the sweet spot. It is dangerous to focus on only one timescale, especially the short term, data shows. Most successful businesses balance short and long term activity, leading to stronger brand building. Ultimately, advertisers should balance the amount of money they spend on long-term brand building with the amount of money they spend on driving sales now.

7 principles for driving growth

We all know that businesses these days are under short term commercial pressures, from investors, stakeholders and the like.

The challenge is that if businesses allow this pressure to influence marketing, it drives a short-term approach to marketing – which as the evidence shows, has a negative impact on your business’ long-term profitability and growth.

“Without brands, we lose competitive advantage. The short term sales model sounds great...but it creates bidding wars for the last minutes of attention of consumers who are about to buy. We cannot win that.”

- Peter Field

In the book, Field lays out 7 guiding principles for building better brands:

1. Focus on building mental availability for your brand. This means investing in advertising to build your brand, priming consumers to want to choose you before purchase-time.

2. Use advertising to create distinctive assets for your brand. This supports and helps strengthen mental availability.

3. Get Emotional. Emotional advertising makes a mark. Emotional campaigns are almost twice as powerful at building brands a rational ones.

4. Get creative. Creative campaigns of quality and originality are powerful selling tools. The more creative you are, the better chance you have of standing out from the crowd.

5. Be consistent. A consistent, long-running campaign can be the most distinctive element a brand has. These must be made with innovation, as campaigns can wear out and lose the power of emotional response.

6. Reach wide with advertising. The biggest way brands grow is by selling to more people. By increasing reach and penetration, brands build loyalty.

7. Balance media. Brand building and sales activation spend should be approximately 60:40. Each are different, so find the media best suited to each role.

A way forward

The aim of this book is to guide marketers to strengthen the vitality of their businesses. Marketers should be motivated to go beyond the ‘now’ and look towards the future to build a stronger brand and generate growth.

In this report, you’ll find real, practical data, useful case studies and guiding principles to help you build stronger brands and sustainable businesses.

At ANZA, we want to help our Members make informed decisions to build their brands. We urge you to read the book and if you would like to discuss further, please don’t hesitate to get in touch.

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