I was lucky enough to attend the Festival of Marketing which brought together hundreds of marketers from all types of brands & agencies.
Short term vs long term marketing
One of the best talks of the day was by Mark Ritson who covered long term & short terms goals brilliantly. He referred to Field & Binet who suggest brands should be spending 60% of their budget on brand building and only 40% on sales activation. Most brands, especially the smaller ones, don’t do this – but why not?
This seemed obvious to an extent, smaller brands have smaller budgets and so of course you naturally put this budget into channels that are making you money – that’s how you grow right? Wrong!
Mark showed us this graph of sales uplift from short & long term activity:
The short term activity like PPC & social advertising generates sales quickly and efficiently. There are natural ups and downs due to budget changes, seasonality, promotions etc but overall you put money in and you’re guaranteed a return. However, this line is very steady, revenue never gets above a certain level because there is always a limit to this activity.
The second line is brand building, showing that this is what allows the brand to grow over time. It doesn’t generate revenue as quickly or as efficiently as sales activation, but it causes that top line revenue figure to increase, without a limit.
So why do so many brands focus on sales activation?
The issue is that most people will have a yearly budget with targets to meet. If you look at the first 12 months of the graph, it’s telling you sales activation activity is how you will make the most revenue. So, of course, this is where the majority of the budget will go. Since you’re putting less money into brand building, it will take even longer for that line to grow so it’s harder to see the benefits and it turns into a bit of a vicious cycle.
The question is whether long term or short term activity is better for your business, which ties in well with the debate over mass marketing vs targeting segments. The answer is you need both. You should be using mass marketing to achieve long term, brand building objectives and then segment targeting to achieve the sales.
Ensuring segment targeting works well
Quantcast gave a good talk on how to achieve results with segment targeting and broke it down to 3 simple things. You need to target the right person, with the right frequency and the right creative. If you only achieve 1 or 2 of these then your activity can be a bit pointless. For example, if you target a specific audience with the perfect creative but they see it 20 times a day, not only will you be wasting budget but you’ll risk turning the against you brand.
Is marketing a science?
My final key takeaway from the festival was around the topic of whether marketing is a science or not. I agreed with Jenni Romaniuk who explained it is a young science and quite different to the types of science we know. It can change regularly unlike other sciences, so we need to be prepared to accept this and adapt. She also made it clear that treating marketing as a science does not mean it can’t be creative or fun!
Overall, it was a great chance to step back from the specific PPC activity I manage daily and gain insight into the marketing world as a whole. As I expected, technology and data are the key tools at the moment. However, it was interesting at the Festival of Marketing how many people made it clear that you can’t always rely on this and sometimes the ‘out the box’ thinking and risks can pay off more.