Marketing Truth #2: How strong brands help balance long-term brand building and sales

The second in WARC’s podcast series, Marketing Truths, examines how strong brands have an effectiveness advantage, and features Colin Chow of TwentyFirstCenturyBrand. Here, he and colleague Audrey Dahmen explain how “brand” is much more than a company’s marketing campaigns, and how embracing the power of brand can help organizations deliver results.

In principle, marketers unanimously recognize the importance of striking a balance between long-term brand-building and immediate sales-driven efforts. The real challenge comes when trying to apply this balance in practice. In larger, mature organizations, it's common to see brand and performance marketing operating in silos, sometimes under the leadership of different individuals with conflicting objectives. Conversely, in startups and smaller companies, the CMO or senior marketing executive might specialize in either brand or performance marketing, potentially lacking expertise in the other area.

What is actually required to make this balance a reality, not just a theoretical aspiration? Let’s unpack the different elements that potentially hold companies back from unlocking the full power of brand to drive effectiveness:

• The misperception that brand is only about marketing
• Commitment, courage and consistency to drive change
• Fine-tuning calibration and measurement

The misperception that brand is only about marketing

Marketing's primary role is to support the overall business objectives by effectively communicating the value of products or services to the right target audiences. However, the impact of a strong brand extends further when it is used effectively as a cross-functional decision-making tool, providing guidance and ensuring consistency across all initiatives.

When TwentyFirstCenturyBrand defines a foundational “Brand Blueprint” for clients, one of the first and most important steps is articulating a “Business Ambition” that aligns the entire C-suite on how the brand will help drive key business goals. Not only does this ensure widespread support of brand-building efforts, it lays the groundwork for all subsequent business- and brand-related decisions.

A prime example is our work with Instacart, where the impact of our brand work extended beyond the marketing organization. The Chief Marketing Officer used it as her springboard to launch a new visual identity and brand campaigns, significantly enhancing the brand's cultural profile. The Chief Communications Officer (CCO) acted as a connecting thread, bringing the brand to life through the company's external voice and initiatives like Instacart Health, an impact platform that provides access to nutritious food. We also collaborated with the Chief Human Resources Officer and a co-founder to refine company values, employee value proposition, and shopper value proposition. Ultimately, the CEO and Chief Operating Officer have leveraged the brand blueprint to broaden its B2B advertiser proposition, the biggest driver of profitability as underscored in last year's IPO.

In the absence of a deep cross-functional understanding that brand is actually a creative canvas for the entire organization, it is much harder to strike the right balance between long- and short-term goals.

Commitment, courage and consistency to drive change

Even when there is a clear mandate for greater brand investment, defining and sticking with the right brand strategy is not an easy journey. We’ve found that there can be difficult conversations that require commitment, courage and consistency at different points of the journey.

• Before: Commitment.
  Understanding the importance of a brand's definition and activation is not enough. It will also require true commitment in the form of time, financial resources and executive focus. For a strategy to truly take root, stakeholder engagement is as important as getting to the right answer on paper.
• During: Courage.
  As the strategy development process unfolds, stakeholders often face the inevitable challenge of confronting difficult truths and making hard decisions, requiring the courage to maintain the strategy's integrity and resist the urge to dilute its essence for broader acceptance.
• After: Consistency.
  When the initial enthusiasm for the strategy is tested against the reality of difficult trade-offs, it remains important to stay consistent to realize the long-term vision and success of the brand.

Our experience has taught us that you can change the brand strategy but you won’t get real change unless you also impact the people and processes required to activate that strategy with commitment, courage and consistency.

Fine-tuning calibration and measurement

Finally, striking a lasting balance requires calibrating and measuring effectiveness. Calibration is critical because it sets a target balance, i.e. the ratio of short-term vs long-term marketing investment. But this initial calibration should not be considered set in stone. It requires continual reassessment as market conditions change. While the fundamental research indicates that a baseline 60:40 split – 60% long-term, 40% short-term – is ideal for maximizing effectiveness, these ratios can shift based on a brand’s industry, maturity level or even price point as Les Binet and Peter Field have already established in their book, “Effectiveness In Context”. 

And after aligning on a target calibration, how do you know if your approach is working? Through extensive conversations with CMO clients of various company sizes, we found that the most holistic approach tracks both leading (short-term) and lagging (long-term) indicators across four dimensions of positive impact:

• Employee: employee motivation, fulfillment and productivity
• Customer: customers’ desire for and experience of the brand
• Financial: financial performance, shareholder returns and leverage in financial transactions
• Cultural: visibility/credibility in culture and creating a positive impact in society

We developed this Brand Effectiveness framework as part of our IPA Effectiveness accreditation, and while it’s not a catch-all solution, we have found it a very helpful tool to lead ongoing effectiveness conversations with our clients. Rather than make it proprietary, we decided to share it with the wider industry in a desire to empower all CMOs and company leaders in their efforts to strike the right balance between long-term brand building and near-term performance marketing.