The perspectives in this article blend many years of working with key performance indicators, marketing models and research that have created growth for all brands where it was applicable. I recently saw a 10x revenue growth in a difficult account in a difficult business vertical that had the same method and framework as other business verticals where I have experienced luck with this framework since 2016. So, with that background and stumbling on an old interview that inspired me to write this I will provide distilled tips that can get you your CFO’s blessing and accelerate your work towards sustainable growth.
Are you discussing the value of brand building to the long-term health of the balance sheet, and the effect it should have on your media budget placement? If you are not doing this then this article will help you to trigger and expand that discussion for internal alignment in your organisation.
If every cent counts in your organisation then a healthy discussion around a long-term brand investment should be a priority. The marketing department can try aligning internally and building rapport with the C-suite and CFOs by not discussing awareness and image. Instead, use their language and talk about cash flow and shareholder value. Start talking about the language of finance and if it is possible include their formulas, metrics and what they care about in an overall measurement plan, OKR/-KPI playbook and they can perform a Discounted Cash Flow analysis. The same narrative must be established, even on the metrics and formulas.
As a team, you should know that advertising is always about sales and profits regardless of the timeframe and paybacks that depend on your media mix and investments. If measurement can prove that brand ads generate profits, CFOs will give their blessing. With existing research and models it’s not hard to achieve long-term brand growth and the support of short-termism results in the same media mix and budgets, but it can be complex.
If you work with activation and get an immediate response and sale but nothing more, then the brand building is about getting a long-term flow of sales, revenue and profit today and in the future. This is why your media mix needs to capture new and existing eyes that are in-market (5%) or outside the market (95%). And yes, this also applies to Meta, TikTok, Google Ads etc. Use your budget smart, don’t give away your money to clever advertising technologies (AdTech).
In your OKR/-KPI playbook, there is one metric that matters – “shareholder value”, and this is calculated through Discounted Cashflow Analysis as a correct way of measuring, but it is not the same as ROI. If you want to make your business operations more holistic you need to consider creating a North Star goal formula.
As the old expression goes “e-commerce needs branding, and brands need e-commerce”. Depending on your background you will think differently about this, but the wider opinion seems to be that brands have been standing in the shadows of performance marketing. With the available research and thought leaders making their cases then maybe we can have a different discussion on long-term brand building to “short-termism”. Do you see a brand that others seem to follow?
If the metric “Share Of Search” is not in your vocabulary then it should be. It is the best metric to measure your commercial success and brand growth. Share of search measures the likelihood that people will search for your brand rather than a rival. This is how you measure Share of Search:
Number of organic searches for your brand / all the rival brand searches
Share of search counts organic search volumes, not paid search advertising. Research can point to a 10% increase in Share of Voice (another metric) will provide a 0,04% increase in Share of Search according to the research, but not according to Byron Sharp. Yes, it is a small number, but what does that number mean to your brand? Probably very much.
If you are a very large and established brand then econometrics can be wise to consider because that measures brand advertising and broadcast media better.
All CFOs like a balanced diet. Media diet! All marketers want credit for their work, and all Sales people want sales. If you have goods ready to go, and you are in the moment of choice (media mix) with great ease of use (experience), you should be a winner if there is a demand (sales).
Can you get your CFO’s blessing?
P.S. The study has bad data, but the model can be really interesting to develop for your brand if you understand how to use the data that you can get and that you already have.
The Long and the short of itEffectiveness in context