Do brands need a bigger purpose than profit? This question kicked off an executive dinner debate, hosted by Brand Republic in partnership with marketing effectiveness business Data2Decisions. The evening’s guests explored what brands mean by "marketing for good" and how this can exist in today’s marketing landscape.
The debate included heads of marketing, communications and insight from brands such as Virgin, Principality, Barclays, PWC, Prudential, FCA, HS2 Ltd and London First, and was hosted by Shona Ghosh, a senior journalist with Marketing magazine. All sectors were covered, with corporate, charities, not-for-profits and government organisations present.
The Chatham House rules discussion was full of senior level insight into this contentious topic, which can be published without attribution. Our co-host, Karl Weaver, CEO of Data2Decisions has worked in the marketing industry for more than 20 years. He has become increasingly interested in how businesses need a purpose beyond profit that both consumers and employees can align with.
On the debate’s question, he expanded by commenting that "marketing is often qualified around quite a narrow set of KPIs but this is changing as the wider business debate evolves to whether profit is the purpose or the result of what a business does.
"We are shifting from ‘valuing brands and valuing marketing’ to developing ‘brands that are valued’, putting more emphasis, rightly, back on the start point which is the consumer."
Shifting the value of marketing
For many marketers, it is arguable that "marketing for profit" has become synonymous with the purpose of all advertising – in other words, its very existence is to maximise revenue. The question is whether it is possible to have marketing for anything else. To achieve this, the challenge is how to shift the value of marketing and its current qualification of success.
On the other hand, the discussion settled on numerous examples of how marketing for good and creating a strong value proposition around a brand had a direct impact on bottom-line metrics. Today’s informed consumer will make purchase decisions for a range of reasons that transcend price-point or quality, including the compatibility of a brand with their worldview or values.
The brands at the roundtable represented a mix of reputational legacies and histories. This illustrated the point that some brands have their purpose defined by values that were set out at their very inception, whereas others need to work hard to cultivate and then communicate their purpose. For some consumers, their choice to engage with a brand may be predicated on the view that it has consistently operated with integrity. However, the reputational damage done if a brand deviates from this narrative can be catastrophic.
In turn, brands that have reputational baggage or were not formed with a ‘bigger’ purpose than profit at the heart of their business model need to clearly define their value and dedicate the significant time and resources to communicating this both internally and externally. The challenge is that this takes time and ongoing commitment at all levels of an organisation, and in financially turbulent times, long-term strategies that don’t appear to return an immediate commercial benefit are often parked in lieu of immediate needs.
The purpose dividend
At the dinner, some brands agreed that they adopt a "plan for eternity" approach which is embedded through every level of their organisation, adding a dose of long-term responsibility into any short-term decision making. Nonetheless, if a shorter term metric was employed to understand the impact of marketing for good, this would empower brands to prioritise their efforts into this area regardless of short-term commercial pressures. For this ‘new’ metric to have value it would need to be placed alongside traditional KPIs, such as revenue and profit.
At the dinner, the idea of a "purpose dividend" was discussed - a metric which would sit as comfortably on an end of year report as revenue, loss and profit. To accept this proposal, an organisation would need to undergo a substantial culture shift, across many stakeholder groups, not least the organisation’s shareholders. As the roundtable agreed, a brand would need stakeholder permission to reduce profit with the shortfall being filled by their purpose dividend.
The good news is that change is happening, as Karl at Data2Decisions noted during the debate: "Our conversations with clients are evolving. We are talking about new ways to measure the business value of being a brand with a purpose, whether that’s providing an essential service, entertainment or jobs."
The instigator and catalyst for this cultural shift is multifarious. For example, one of the dinner’s guests had an example that was developed out of employees going the extra mile with customers, which was so well received it turned into a national marketing campaign promoting formalised workshops and classes.
Alternatively, some guests noted that the change comes from brands evolving to accommodate increasing consumer awareness and demands. Either way, there was universal agreement that change must be empowered from the top of an organisation. This goes beyond tacit approval but involves formalised KPIs and outcomes defining success, which will guide the process.
Marketing for good
The table discussion delved deeper into the idea of marketing for good, and what this actually means. Corporate social responsibility (CSR) was considered an obvious vehicle for driving awareness of a brand’s purpose and communicating its positive work, however, it does not entirely capture the fundamental purpose or role of a brand in society.
It was also argued that there is value found in being a sustainable business which produces a useful product or service and employs people. An example of a craft watchmaker company in Detroit was given. It doesn’t do charitable work, but its purpose is simple and emanates through its brand communications: create a high-quality product that consumers demand and employ local workers by providing the right training. The challenge is then perhaps levelled at larger and profitable organisations, and how they should use their resources and influence to do good and communicate this work through their marketing channels.
The roundtable’s charity contingent was well positioned here to say that they were inevitably working to do good, however, they found challenges in marketing this to an ever-changing audience. In one example, the demands of engaging millennials was debated and if a charity fails to create marketing which resonates, they are falling short of their charitable purpose.
Also, some organisations can maximise their positive role in society by ensuring they continue to do their work well. For example, the debate was joined by both a country’s tourism board and an NGO, both positioned to engage and communicate the positives of the UK and London respectively. This soft power can be a gradual but effective influencer and requires the conduit of marketing to be heard.
As the debate drew to a close, there was unanimous agreement that marketing is a powerful tool and as it does genuinely influence consumers, it must be used responsibly. One guest said, for him, this was most true for products with an emotional significance, for example baby food where there is added pressure on the consumer to make ‘the right decision’ for his family.
In order to place a tangible value on marketing for good, a cultural change is required across the business community, a change which can be driven by marketing.
And so, the evening concluded with a challenge: how can we shift the definition of success and value in our work as marketers?
Data2Decisions is a global marketing effectiveness consultancy, helping clients grow their businesses through better marketing. Through data, analytics and technology, it helps clients understand how well their marketing has performed and provides advice to guide more effective marketing decisions. Data2Decisions’ global HQ is in London and it has offices in the USA, Nordics, France, Spain, Germany, Canada, Singapore and Australia.