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Short-termism: The single greatest threat facing marketing
 
Left Field
 
Left Field

The Chinese philosopher Lao Tse is supposed to have written that 'a journey of a thousand miles must begin with a single step'. These days we might talk about 'quick wins' or 'low hanging fruit'. There is nothing wrong with this of course, so long as it doesn't cause you to lose sight of the ultimate destination.

It appears from a recent Warc News report that this is precisely what recession has driven many Marketers to do. Warc News reported that "A majority of advertisers in the US are using functional rather than emotional messages to promote their products, a trend that has been encouraged by the economic downturn." They have discovered that aggressive promotional messages can produce immediate sales up-ticks. How long before they discover not only that this gets them nowhere in the long term, but actually sends them backwards?

The single greatest threat facing marketing at the moment is short-termism: the dominant focus on this period's or quarter's sales. Why? Because it leads marketing to abandon the pursuit of those emotional qualities that build long-term preference and profitability for brands.

Short-term promotional messages will usually be undone by the competitors' responses, leaving the brand with little residual benefit or momentum - just a rapidly fading memory of a brief moment of glory. It soon becomes the crack cocaine of marketing - the next hit of which is needed ever more urgently.

Emotional brand associations may not bring such an immediate sales 'high', but by gradually increasing consumer esteem for the brand bring about lasting benefits. The most valuable of these will be the price premium consumers are prepared to pay for the brand. Over the period of a year or two, these will dramatically outweigh the benefits of a series of brief volume blips. But none of this counts for anything if general management ignores the long-term prospects of their brands. Of course they may turn out to be not long-term general management, so the damage will not be their problem.

In the real world no-one can ignore the short term so I'm not suggesting we do. The trick lies in how to trigger those immediate behavioural responses in a way that also contributes to the long-term esteem of the brand. Very few brands have found the answer to this and I suspect many kid themselves they have, when in fact all they are doing is short-term response. In his presentation at the MAP conference earlier in the year Neil Dawson presented a number of 'brand response' case studies that balance the short and long terms cleverly.

Of these I think the most illuminating is the Sainsbury's case study. Neil made the point that Sainsbury's already had Jamie Oliver on board as a brand spokesman before they found the way to exploit him as a response driver.

The 'try something new today' idea built the bridge between Jamie as an embodiment of innovative and tempting food that would lure customers into Sainsbury's over time and Jamie as a trigger to those visiting the store to spend more on interesting ingredients today. Without Jamie, 'try something new' would be uninspiring and short-lived, and without 'try something new' Jamie would lack immediacy.

The trouble is that marketers are increasingly focusing on the 'try something new' part and ignoring the vital Jamie element. Add to this the exciting new tool of behavioural economics and you have the ingredients of a run-away problem.

It would be wrong to suggest that behavioural economics is all about short-term behaviour, because certainly two of the oft-quoted 7 principles are concerned with the time-honoured issue of social compliance, which has been a successful building block of many brands over the years. Perhaps because the other principles are less familiar, particularly those concerned with choice architecture and framing, they seem to be attracting most attention. These are precisely the tools of the 'try something new' school of thinking.

Unless balanced by a clear appreciation of the need to build long-term brand esteem they will merely fan the fires of short-termism. And that is likely to result in a lot of single steps that never take the brand in any discernible direction, let alone one of a thousand miles.



Subjects: Marketing, Advertising

14 June 2010 11:50
 

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