Putting the Long & Short of It through the Mum Test

a.k.a. Why does John Lewis keep trying to make me feel all the feels?

 

So Mum, just so you don’t get caught out on the ever-important topic of brand equity, here goes:

In advertising, we often need to show how the communications we put out into the world relate to the amount the company has spent on this work and the profit they make or sales of their product or service that arise off the back of it.

A couple of highly regarded consultant strategy types; Les Binet and Peter Field, wrote a seminal document called Marketing in the Era of Accountability, where they analysed hundreds of case studies of different advertising campaigns in order to create a definitive, industry standard for evaluating the effectiveness of campaigns.

Through this paper, they advocated that brands need both short-term objectives, in order to get people to buy now but also longer-term objectives that focus on building the positive perception people hold of the brand. Knowing that successful brands show a balance of both, they wrote a new paper called The Long & Short of It, which explores how companies can balance these two objectives in order to increase revenue.

Short-term & Long Term

The growth of the internet has meant that there are a lot more ways in which businesses can talk to potential and existing customers. They can also get instant feedback on how these communications are received and with a ‘Buy Now’ button that’s active 24/7, they can sell to more people than ever before. This has led companies to focus their attention on short-term results. Promotional offers (e.g. buy one get one free) are the easiest way to achieve these short-term results.

However, it is important to understand that all brands, not just the biggies, are now able to create a whizzy website, so businesses must not forget the importance of building the appeal of the brand in order to differentiate from their competitors and so that it comes to people’s minds quickly, or becomes the automatic choice at the supermarket shelf.

This is why, as well as focusing on the short-term results, we shouldn’t lose sight of the long-term results whose impact won’t be evident until later (a matter of years rather than a few months).

Brand Response

Unfortunately, most companies divide each year into quarters and have to reach targets at each of those four-month increments. They also have to show improvements year after year. So what to do to meet both of these objectives?

Well, by analysing around 1000 effectiveness case studies of advertising campaigns, which is the most reliable way of measuring cause and effect, Binet and Field discovered that the most effective way of making a profit was to balance short-term ‘activation’ with long-term ‘brand-building’ to create, what they call ‘Brand Response’.

Brand Response campaigns prove to be almost as effective at activation (sales) in the short-term as those campaigns that only focus on activation and almost as effective at brand-building in the long-term as the campaigns whose sole objective was building the brand. Best of both worlds.

Here’s a chart that explains that:

L&S chart01

These clever chaps even discovered the optimum ratio between brand-building and activation: Ideally you should aim for a 60:40 split. That’s 60% of communications focused on brand building and 40% on promotions to make the perfect ‘Brand Response’ campaign.

L&S chart02

Brand Response is ideally 60% brand-building, 40% promotions

Does that make sense?

Audience

Another very trendy topic to talk about in advertising at the moment is whom you should be aiming your communications at. Do you:

  1. Go after your existing customers and try and keep them loyal
  2. Cast your net wider and talk to a broader mix in the hope of acquiring new customers

The answer is B. Although existing customers are seen as highly valuable, it is in fact those that sought new audiences that benefited from greater sales. Again, these effects tend to show more slowly so the received wisdom was to opt for A.

Book name to drop on customer loyalty [or the non-existence of]: How Brands Grow – Byron Sharp

This chart shows how going after your existing customers is great in the short term but when it comes to getting bigger paybacks, you need to be casting your net much wider.

L&S chart03

The perceived familiarity and popularity of the brand amongst the many enhances its appeal to the one

Still with me?

Tugging at the heart strings

Ever wondered why car adverts are all slick and shiny on TV but the campaign takes on a more factual, car lingo, tone when it comes to other types of advertising? This is because the commonly held understanding is that cognition merely rubber-stamps our emotional decisions. We are led by our hearts, often referred to as our System 1 brain, only taking the time to rationalise our decision with the hard facts that come through System 2 (slow) thinking. Why do we do this? Because thinking is hard! We tend to avoid it wherever possible; and that’s not just you and me, Mum.

Book name to drop on the subject of balancing head and heart: Thinking Fast & Slow – Daniel Kahneman

The effects of emotional campaigns build slowly but last much longer than rational campaigns, which are inherently unmemorable. As with promotions and brand-building, they both serve a purpose but to achieve best overall results, a combination of the two is required. Oh look, another chart:

long & short

The principle of the aforementioned Brand Response effect is that emotional priming has the benefit of making people more receptive to rational messages and less sensitive to price in the long run, meaning that companies don’t have to resort to ‘timely offers’ (when the purple line gets higher than the greeny-yellow line).

Shouting, Fame & Creativity

A couple of points to finish on, that may seem like no-brainers to you; the first is that if you spend more on advertising than your competitors, even the really big’uns (proportionately), you will see growth over the long term. Final chart to express that:

SOV

The second, and final point is that fame and creativity have a positive effect on advertising campaigns. The campaigns that make people feel differently in a way that inspires them to share their enthusiasm (making it famous) are usually surprising in some way. Embedding surprise into a campaign requires creativity and that, Mother, is why I have a job.

Any questions?

Placing Value on your Data

data

What is the purpose of market research? To gain a deeper understanding of the audience in order to make products and communications that are more desirable and relevant to them. However, the limitation with market research is the fact that it’s only selecting a small sample group; it works in a controlled environment and doesn’t account for our human imperfections. This requirement of people’s time and mental exertion would be financially compensated.

Data capture on the other hand, which for brands has the same objectives as traditional market research, often asks very little of people, as little as clicking ‘Accept’ at the bottom of reams of terms and conditions. Indeed it is often information of seemingly little personal value. But how much is little? What is little worth?

Privacy

The first thing to make clear is the fact that privacy and data are not synonymous. You can share your data with brands without compromising your privacy. I strongly believe that it is the brand’s responsibility to ensure that the data [you have so kindly shared with them] remains safe. Fear that the limited information you can provide will somehow open the portal to evil brand mind control is fruit loops.

Even hacking and spying fears are, in my opinion, mostly unfounded. Aside from wanting your bank details (high-value data), hackers tend not to be stalkers. The fact is; if it’s of no financial gain (i.e. you’re not Jennifer Lawrence), the bad guys have no interest in you as an individual. I believe that, what I see as an irrational fear comes down to people’s over-inflated sense of self-importance.

Audience

It may be a sweeping statement but it seems that a lot of the concerns surrounding sharing personal information lie with older generations. The sense that there’s no such thing as a free lunch implies that whatever you’re exchanging must be worth something, even though in your pocket, it’s worthless. Or maybe they’re just more private people generally but that feels more like fluff than fact.

The importance of ethics and transparency is far from lost on Millennials; the feeling that something is mutually beneficial is of great importance, even if they are less guarded when it comes to sharing.

Transparency

Transparency is key for all business-to-people relationships in this day and age. It’s through transparency that trust is built and this is the foundation of any healthy relationship. Without trust, you cannot relax and be truly happy. In a brand sense, this means that you don’t have to be worrying about what may or may not be going on and the brand can continue to occupy the tiny fraction of brain space that it does, possibly wrapped in slightly warmer sentiment.

Balance of Exchange

Transparency extends to clarity around what you will be getting in exchange for your information. Exchanging information before buying something online is the norm. Often, having a good reason for needing the information is the strongest pre-requisite to sharing, especially when it comes to low-value data like contact information.

The question that brands seem to have presumed the answer to is: Is targeted content (Google Now) enough of an incentive? Does it give people the social currency they require to part with their browsing history and other data gleaned from the digital detritus of modern life? Or would a financial incentive drive more accurate customer data?

In the age old adage of making things people want, not making people want things, I would argue that the most effective exchanges take place when brands can guarantee the best information at the right time and place in return, à la Citymapper. This, or simply giving people the power to affect change. Financial drivers, especially for low-value data, are likely to result in a high volume of inaccurate or irrelevant data.

 

The fact is that we attach different levels of value to different sets of data. The commercial value of our data only exists when the people sailing the sea that we’re creating are able to understand the data. We’re only able to see this understanding when they find insights and use these insights to communicate more effectively.

If something purportedly has no value to you in your hands but could lead to the greater good, why would you not?

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