financial

Digital media and financial pressures on CEOs are forcing marketing employees to focus increasingly on short-term metrics at the expense of creativity and brand building.

Short-term marketing tactics are increasingly taking precedence over long-term brand building, which is affecting advertising effectiveness, but whose responsibility is it to even the balance between fast results and brand longevity?

The issue of short-termism was raised by an IPA report in June that suggests the use of short-term metrics to measure campaign success is resulting in a sharp drop in creativity and diverting budgets away from longer-term brand building activity.

Author of the IPA report Peter Field believes the rise of digital and programmatic advertising is partly to blame for this shift in thinking, since it has put increased pressure on marketers to track whether activity is working in real time. If a message fails to resonate it can be quickly changed, which is appropriate in some instances but does not necessarily lend itself to brand building.

“There is a real pendulum that companies swing because they want long-term brand building to make sure the brand resonates and continues to be loved but that is a slow burn,” says Susan Smith Ellis, CMO at Getty Images.

“The instantaneousness of measuring then causes a shift back to all the digital channels all the time and trying to figure out how to measure these different pieces by the nanosecond.”

Smith Ellis believes companies need to consider whether “they are being schizophrenic about their behaviors”. She says: “The balancing of short-term revenue and long-term brand building is an art and a science and very few companies do it well.”

 

The impact of digital transformation

The Royal Shakespeare Company is in the process of going through a digital transformation and implementing a full overhaul of how it delivers commerce and content. Photo credit David Tett

Taking a long-term view depends on the position and direction of the business. The Royal Shakespeare Company (RSC) is in the process of going through a digital transformation and has worked with software provider Progress to implement a full overhaul of how it delivers commerce and content.

Richard Adams, consultant digital programme manager at the RSC, says: “What we are doing is accepting short-term measures are in place, but underneath it I have implemented lots of different approaches to data.”

Adams is in the process of rolling out the ability to track trends over a longer period to understand how people interact with the company, which therefore allows the RSC to start thinking about how to change the way it works to become data-driven and evidence-led rather than reactive to short-term campaign successes.

“We are firm believers that a lot of traditional digital marketing spend is inefficient and wasted.”

– Neil Costello, head of marketing, Atom Bank

When embarking on a long-term digital transformation project, it is vital for the entire company to be on board in order for this approach to work. Adams says: “One of the things about transformation is that you have to somehow work out how to take people with you. You can put as much technology in place as you want but people have to know why and that explanation has to be simple and relevant.”

When launching a new business, it could be tempting to look for quick wins but in order to create a viable long-term business proposition, brand building is key.

Atom Bank launched its app-based savings account in April, but its flagship product – its current account – launches next year so the brand is focused on driving earned media using social networks. A short-term campaign on TV or digital is therefore not on the cards, according to head of marketing Neil Costello.

“We don’t have the investment to go on TV and have no desire to do that. We are firm believers that a lot of traditional digital marketing spend, such as online display, is inefficient and wasted so it pushes you into the territory of gathering a following in social, where you have an army of advocates ready to purchase your product,” he says.

Costello was drawn to Atom from Aviva by the “chance to build a brand from scratch” and the ability to “be as risky and provocative as you like from the outset, as opposed to being hampered by a large brand that can’t move too far away from its established core”.

“It’s really easy to be lazy and start attacking the big banking groups and what banking has done in the past,” adds Costello, who says Atom is more focused on helping people redefine the relationship they have with money. He says: “By getting people talking about that on your behalf, you are fostering trust before your proposition has even launched.”

 

When a long-term view is needed

Electrolux has been working on its digital transformation for the past two-and-a-half years

Household appliances brand Electrolux has been working on its digital transformation with agency Prophet for the past two-and-a-half years with the aim of building brands in a more effective way. The project is long-term and still going.

In EMEA countries, Electrolux has more than 30 brands across different categories in the white goods sector and senior vice-president of EMEA marketing Lars Hygrell wants to introduce a more consistent consumer experience.

“We needed to bring rigour into measuring and understanding the effect of our investment in different channels.”

– Lars Hygrell, senior VP of EMEA marketing, Electrolux

He says: “With everything going on in the industry and marketing overall thanks to the changes and impact of digital, we needed to bring rigour into measuring and understanding the effect of our investment in different channels.”

The goal for Hygrell is to effectively manage short- and long-term requirements. He adds: “The beauty of our approach is to be able to not only look at the long term and say we only look at brand health, but to have that balance to make sure we have the right focus on the monthly, quarterly and yearly results.

“At the same time we need to drive and feed into the overall strategy of securing an overall consumer experience and brand building strategy that drives us in the right direction.”

• The rise of short-term thinking is closely aligned to the fact marketers’ tenure in any one role seems to be declining.

 

The effect of short-termism on creativity

Shrinking marketing budgets and the use of short-term metrics to measure campaign success have resulted in a sharp drop in creativity, according to the IPA’s ‘Selling creativity short: Creativity and effectiveness under threat’ report. It shows that since 2006 the percentage of IPA campaigns that ran for less than six months has more than quadrupled to more than 30%. For award-winning campaigns the rise has been even sharper at around 45%.

The report suggests it is important to note this rise because “creativity delivers business results most strongly over the long term and this ‘miscasting’ undermines the impact of creativity”. Over these short time scales non-awarded campaigns also tend to outperform awarded campaigns.

Report author Peter Field says short-termism is “putting attention on short-term tactics and diverting budgets, particularly into digital sales.”

He adds: “If you undermine long-term thinking and strategy, you entirely undermine creativity because it lives in that world of long-termism.”

 

Did you find this Article Interesting? If so, check out our most recent Marketing Manager vacancy on our website.  It might be the perfect opportunity for you to take the next leap in your Marketing career! You can check it out by following this link

 

– Mindi Chahal