Are you currently rebudgeting for recession and recovery? If you need tailored advice on budget planning, Paul Dyson has teamed up with WARC Advisory to help marketers with their investment planning during COVID-19 and its aftermath. Paul will use evidence from previous recessions to explore the impact of shifting budgets and media allocation to plot out specific scenarios for your brand. If you’d like to know more, please get in touch at enquiries@warc.com.

Why it matters

Moving budget from activation to brand building can take a leap of faith – that sales might be lower initially but better in the long run. A new forecasting tool that builds in learning on how advertising grows brands in both the short- and long-term allows marketeers to understand the likely impact of different strategies over 5+ years allowing them to find the best strategy for their brands and giving them confidence in the approach.

Takeaways

  • Using a new long term forecaster that builds in how brands grow, we see that while the optimum 5-year plan suggests spend on brand building should typically be bigger than activation, this is not always the case and depends crucially on a number of inputs around current brand strength, historical spends, creative quality, category norms and ambition.
  • While 60:40 brand:activation is a good starting point there are instances when 100% brand or 95% activation create the best returns over a longer period.
  • Convincing senior management that this is the right approach – and continuing to reassure them through the first year or two – requires a robust approach to measurement and in particular an accurate way to forecast how the brand building approach will pan out over at least the next 5 years.
  • This allows marketeers to understand the risk vs rewards, set realistic long term growth targets and to develop a tailored approach that gives them the best chance of delivering the year-by-year sales they require over a 5+ year period.