Les Binet and Peter Field probably know more than anyone else about what makes marketing effective and profitable. With over 1,000 analyzed marketing cases, it’s hard to dispute their conclusions about how marketing communication works and creates value. Below is a summary of ten of their most important conclusions, well summarized by Mats Rönne who is one of Sweden’s leading brand and marketing consultants.
1. Focus on acquiring new customers
Marketing is more profitable when it focuses on acquiring new customers rather than increasing loyalty.
2. Reach as many potential customers as possible
A broad reach is more profitable than targeting narrowly.
3. You must invest
There is a direct correlation between media investment and increased sales. The key metric for growth is that your share of voice should be higher than your market share.
4. Invest in paid media
Paid media is necessary to make owned and earned media effective. The effectiveness of paid media has increased because it generates spillover into owned and earned channels.
5. Spend most of your marketing budget on brand building
You need to balance long-term brand building with short-term activation. An optimal split tends to be 60% on brand building and 40% on activation. Spend an even higher portion on branding if you have a premium position or have a complex and long buying process.
6. Distinguish between effect and efficiency
Effect measures what you aim to achieve, primarily in terms of commercial development. Efficiency measures how well you use your resources. Effect is more important for growth.
7. Avoid using ROI as a metric
Campaign-level ROI has low or no correlation with long-term business value, as campaign ROI tends to favor “low-hanging fruits” and diverts resources from efforts that drive long-term development.
8. Creativity boosts effectiveness
Relevant creativity creates “mental availability,” i.e., makes your brand top-of-mind for customers. Creatively awarded campaigns produce, on average, 10-12 times more effect.
9. Use the right channel for the right purpose
Build brand in channels good for storytelling to broad audiences, such as video (TV/online), PR, outdoor, and print. Use focused media for conversion, such as search, display, and direct response.
10. The relationship between short-term and long-term is asymmetrical
Short-term efforts are good for increasing sales during the campaign period, but is quickly forgotten. Long-term brand-building efforts drive the majority of profitable growth, including sales.
These conclusions make it quite obvious that we marketers have moved in the wrong direction in recent years. The increased focus on digital channels and targeted messaging has not made us better – rather the opposite.
You find more of Les Binet’s and Peter Field’s studies here: https://ipa.co.uk/knowledge/effectiveness-research-analysis/les-binet-peter-field
If you want to discuss profitable growth, let’s have chat. You reach me at ulf.vanselius@comprend.com