Investing in long-term brand-building is vital for companies to grow and forge an emotional connection with consumers, but marketers must do a better job of talking the language of short-term performance and measurement to get support in the boardroom.
That was a key message from three leading UK brands, the Co-operative Group, Ice Lolly and Hillarys, which spoke at Campaign’s breakfast briefing, "Brand v performance: what’s driving Manchester’s ‘new economy’ boom?", in association with Teads, at the Science & Industry Museum.
Manchester’s media industry has a reputation for using direct response TV to drive immediate sales, and the rise of digital performance marketing has increased the focus on short-term metrics that can be easily measured.
"New economy" businesses in sectors such as ecommerce have been champions of performance marketing techniques such as search and pay-per-click to fuel rapid growth.
But there is a growing recognition that, as Susan White, marketing director of Hillarys, told the audience: "There’s only so far you can grow your business through performance marketing. For significant growth, we’ve got to make people feel differently about our brand and the only way to do that is through brand activity."
More than 130 people attended the breakfast – the first held by Campaign in Manchester and the third in a series, after previous "brand v performance" events in London and New York.
Never lose sight of the bigger picture
Caroline Beesley, head of digital marketing at the Co-operative Group, which was founded in Manchester in 1844 and has a portfolio that ranges from groceries to financial services, explained how the organisation has tried to get closer to customers by speeding up online deliveries and offering "value" price deals to improve convenience.
However, Beesley added that the Co-operative Group also realised that it needed a deeper, emotional connection with consumers because too many people felt "neutral" about the brand and regarded it as "vanilla", as she put it.
Beesley warned marketers must "never lose sight of the bigger picture", despite the pressure to deliver for the short term. "It would be easy to get hooked on performance but there are longer-term gains that need to be had," she said. "Brand is what people care about."
Investing in brand has also become important for travel price-comparison website Ice Lolly for different reasons, because its roots are in digital. As Ross Matthews, its chief marketing officer, said: "Ice Lolly as a brand was founded on performance marketing."
He recounted how Ice Lolly launched in Leeds in 2005 and used organic search and PPC – "anything you could measure effectively and turn on and off on a daily basis" – at a time when "you didn’t really have to work that hard" to drive online growth.
But, as the travel site increased its share, the marketing team realised it "needed to do something a little bit more" to stand out, which is why it started experimenting with sponsorship on ITV in 2017.
"All of our numbers went through the roof. For the first time, without having to spend [extra] money on search or do any of that other great performance stuff, we turned the dial," Matthews said. He explained how brand-building increased not only sales but also softer measures such as perceptions of quality and trust.
"We were able to prove that the performance had probably reached a plateau, a ceiling, and without that brand [investment], we weren’t able to move those metrics," he added.
Matthews’ team went on to sign a bigger sponsorship deal with ITV2 and, significantly, other brands such as Visit Florida and Etihad Airways have now partnered Ice Lolly on marketing campaigns.
"The combination of this type of [brand-building] media on top of a digital base of performance has worked very well for us," he said.
Hillarys, which was founded in Nottingham in 1971, has moved into TV sponsorship for similar reasons. The curtains and blinds manufacturer decided it needed to move beyond its traditional focus on direct response.
"People knew about us but didn’t necessarily think we were the right brand for them," White said. "We knew we were not going to improve that through more leaflets or PPC or digital channels. We knew we had to do something different."
Just a few years ago, 95% of Hillarys’ spend went on performance. Now, it is closer to 65% as White’s team increased investment in brand to about 35%, culminating in an £8m sponsorship of Channel 4’s Homes on 4 strand of programming.
Ice Lolly has swung even further towards brand, which represents about 60% of its spend – a significant figure, with Les Binet and Peter Field, authors of an acclaimed study, The Long and the Short of It, having suggested the optimum split should be 60:40 between brand and short-term activation. Indeed, Beesley said the Co-operative Group is striving to get to 60:40.
Talk the language of the boardroom
The marketers said convincing their boards about the financial benefits of long-term brand building is challenging. "It can be a very difficult conversation," Beesley admitted. "But if you’re talking their language" with statistics to support brand investment, the management team and the board "can easily buy into that", she said.
In the case of the Co-operative Group, tracking net promoter score and measuring "joyful sentiment" on social media have helped to show the impact on "customers’ hearts as well as minds", according to Beesley.
Matthews said: "I almost feel like an accountant sometimes when I present within our board meetings. It’s not that they don’t care [about brand] but it doesn’t convert to cash as easily in their minds."
He explained that his shareholders are "comfortable" with PPC "because they can turn it off on Wednesday if Tuesday’s been a poor trading day – you can’t necessarily do that with above-the-line media".
Hence Matthews’ primary focus has been on "business results" to show how brand activity has increased the number of site visits and holiday bookings. Importantly, Ice Lolly has also recorded improvements in NPS, prompted awareness and Trust Pilot scores, all of which have resonated in the boardroom.
"What we are able to do is make them feel differently about the business" and appreciate
the "quality" of the brand, Matthews said. The strategy has been vindicated as operating profit has risen 51% in the first nine months of 2019.
White has faced a similar challenge to prove TV sponsorship’s value, because Hillarys was used to seeing its marketing spend result in increased customer leads and appointments that day.
Her team has "had to work quite hard" to develop different metrics.
Brand consideration, which the company had found "difficult to shift" previously, rose seven percentage points in a year and its monthly brand tracker has become "a really important measure for us", White said. "We know it’s moving our business in the right direction."
All of the speakers agreed that the line between brand and performance is blurred, rather than the two operating as silos albeit there might be some tension. "It’s merging in the middle," Guy Jackson, regional director of Teads UK, said.
The picture is nuanced because a strong brand can "feed" performance and there is a case for saying brand activity works in a similar way to performance – just "with a measurement over a different period of time", Jackson suggested.
The marketers said TV remains crucial for brand-building, despite the decline in linear audiences. Partnerships with other brands and influencer activity are growing in importance to attract younger audiences. The Co-operative Group has opened pop-up shops at festivals including Glastonbury and Reading, while Ice Lolly has staged Blog at the Beach, an event for travel and fashion influencers.
If there has been a swing too far in favour of digital performance in recent years, it’s because "there are too many people talking about the plumbing and not enough people talking about higher-order purpose", Jon Kershaw, managing director of PHD Manchester, said.
For Matthews, as a representative of a "new economy" disruptor company, the answer is simple: "Performance with brand. What works, you do more of."