Monday, 8 April 2013

Advertising effectiveness Selling short and long term campaign Swings and roundabouts

What you lose on the swings you gain on the roundabouts

- the positive and negative results of a situation or action balance each other.

Carter's steam  fair at Eel brook Common, Fulham
This way of thinking is often raised in the tension between  arguments for short term and long term marketing campaigns. It turns out that the best balance is not exactly 50:50.

Lawrence Green in his think tank marketing piece in Sunday Telegraph’s Business section 7th April 2013 considered the end game where client/ agency relationships are properly tested . It is where soft ideas meet hard opinion.

The challenges to an advertising  creative presentation could well include :-

1.       Will it work ?

2.       How will it work – How exactly will it work ?

3.       When will it work ?

No 3. Particularly focuses on short term and long term marketing plans

Carter's Fair at Eel Brook Common
At the current stage of the economic cycle marketers are increasingly asked to drive for short term sales yet expected to be good custodians of  the brand.

A new book to be published next month Advertising effectiveness  - the long and the short of it weighs up short term and long term campaigns. The authors Les  Binet and Peter  Field studied the sales and profit performance of 1000 advertising campaigns over the last 30 years.

According to Green they conclude that long-term campaigns secure the biggest payback for advertisers and that the sum of a series of short term campaigns falls appreciably short of the total gain of the long-term investor.

Short term campaigns can generate sales it is true but driving volume is not usually enough for advertising to pay back because price effects typically make up more of a contribution than pure sales to brand profitability.

Price effects are the most important thing brand building can do but take time to come through often 3-5 years.

Put simply Profitable Growth will always take time and over hasty expectations will be disappointed.

Short term initiatives can even harm long-term return on marketing investment. This is due to the fact that strategies that maximise short term effectiveness e.g. a price promotion to trigger behavioural change will typically harm long term effectiveness by increasing the brand’s price sensitivity.

Carter's Steam Fair Eel Brook Common
On the other hand an unremitting focus on long term creation of brand equity  will have least effect on short-term sales.

So the authors propose

1.       Priority your brand equity plan since it is the source of profitable growth. Commit 60%  of your marketing budget to this and keep your nerve.

2.       Find short term activations that flow from that brand idea rather than undermine it. Commit 40% of your budget to ‘milking’ of brand equity. Expect immediate but not persistent  or profound results

Enjoy the fun of the fair fellow marketers

Good Selling

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