Times are tough, but brands must avoid short-term thinking

We’re at that stage in the year when we’re still gripped by winter, but beginning to see Valentine’s and Pancake Day products on shelves, suggesting spring is close.

As analogies for the economy go, it’s as good as any. Forecasters seem to be wavering between “long, slow recession and recovery” and “inflation has peaked, house prices have turned, everything will be OK”.

The story I’m hearing from a lot of food and drink clients is pretty pragmatic: “It’s not our fizziest time ever, but it’s been a lot worse, and I’m confident we’re going to come out the other side – so I want to plan positively.” It’s a delicate balancing act.

However, we’ve also seen a couple of clients recently shift their balance of spend into performance comms at the expense of brand, almost to the point of total exclusion. Call to action, or bust.

They obviously know their business, but the marketer in me can’t help but feel they are finance team-led decisions. I wish more would read Les Binet and Peter Field’s ‘The Long and Short of It’, an examination of how best to balance short and long-term marketing strategies. This is the book on the subject.

There are two basic views on what to do when recession hits. Option one: cut your cloth, scale back, switch off all brand comms and focus on hitting short-term sales targets. Option two is what we might call the ‘Ayrton Senna theory’: “You can’t overtake fifteen cars when the sun is shining, but you can when it’s raining.” You seek to outspend your competitors in order to gain market share.

And yet, according to Binet and Field, the data they have analysed and the case studies they have curated show the need to maintain both strategies, and that there are huge dangers in judging success over the short term and assuming it will apply to the long term.

In summary, the way in which long-term effects are generated is fundamentally different from how most short-term effects are produced. Although long-term effects always produce some short-term effects, the opposite isn’t true: long-term effects are not simply an accumulation of short-term effects.

They also suggest a succession of short-term response-focused campaigns (such as promotions) won’t succeed as strongly over the long term as a single brand-building campaign; that the ideal campaign will include both brand and performance elements i.e. be a brand response campaign; that IPA data shows the optimum balance of brand versus performance is around 60:40, with variations by category. Emotionally-led campaigns produce considerably more powerful long-term business effects than rational persuasion campaigns, but rational campaigns can be better in terms of immediate performance (and are therefore pretty seductive if you’re focused on short-term sales).

Lastly, they make the point that retailers will often try to force brands into price promotions, but these really only help the retailer. There may be a short-term boost to sales, but there is long-term brand damage and it is far better, from the brand perspective, to run competitions, gifts and instant wins as they enhance brand-lust without price discounting.

So, what does all this mean for brand owners? Well, to start with, they have to educate their finance teams, not be dictated to by them, and demonstrate that even if some comms activity doesn’t have a direct call to action, it’s still worth doing.  Please argue with anyone in your business who thinks recessionary times equal performance-only activity. Buy The Long and Short of It to form your own argument for your brand in your sector.

Second, of course, find creative ways around retailer requests for discounting so you still give them something, but don’t damage your brand.

Third, consider your full comms mix – if you cut back on brand advertising, can you still spend on brand PR activity? How can you use the full suite of tools at your disposal to continue to put emotional messages and stories in front of consumers?

Fourth, quote the Ayrton Senna line liberally. See this as a time of opportunity and do what you can to make sure that whatever the short-term weather, you’ll be in a better position when winter passes.