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Perspectives
Brand marketing effectiveness study
Maximizing the value of brand marketing
When it is right, a marketing campaign should engage, inspire, and make consumers think and feel in a unique way.
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- The value of brand marketing
- It’s a focus on permanence, not just performance.
- Endnotes
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The value of brand marketing
Every year, at least $80 billion is on the line if you don’t reconsider the investments you are making. That’s how much is squandered annually because of poor marketing tactics—and the biggest culprit is not getting audience reach right.1 When it is right, a marketing campaign should engage, inspire, and make consumers think and feel in a unique way.
- Think of your favorite ad. There was no doubt: When the commercial finished, you wanted to know more and be a part of that experience.
- At its best, that’s what brand marketing does. It transcends the product and makes you feel connected to the brand. Like a great song inspiring you to run, train, and achieve. It’s what makes great brands great.
- Alternatively, sales, discounts, buy-one-get-one offers, and promotions focus on different near-term goals.
Each serves a purpose.
Price-sensitive offers are tactics used to hit quotas, a cycle of paying on a transaction-by-transaction basis to achieve bottom-line results. If it feels like you’re starting over each month, it’s because you are. Performance-based, bottom-of-the-funnel, direct-response marketing―call it what you like―is ephemeral.
Brand-building is at the other end of the spectrum―or funnel. It’s an exercise in equity development. Something that lasts beyond the campaign. Through the CFO’s lens, it’s a way to think about marketing as a capitalized cost rather than an operational expense. It’s a critical investment, and one that, in times of uncertainty and austerity, needs to be put into proper perspective. For instance, the costs of acquiring new customers can be as many as five times higher than the costs of retaining existing customers, which highlights the importance of deepening customer ties and relationships.2
Even famously frugal investor Warren Buffett values brand-building. Of American Express, he recently said: “The most important thing about American Express is the brand and the customers that aspire to be associated with the brand." He continued, "That brand needs to be cared for, the brand needs to be invested in, and we will continue to do so through tough times and through the good times.”3
It’s a focus on permanence, not just performance.
This report sets out to reevaluate the value of brand advertising and understand the challenges of assessing its value and potential approaches to evaluate tactics in a data-driven world. What the report does not intend to do is recommend one tactic over another; instead, as the research indicates, it suggests that marketers reexamine their strategies to achieve a balance between converting existing customers and developing new audiences―a long-term objective to bolster the balance sheet while also developing the income statement.
The report was developed in collaboration between Condé Nast and Deloitte Consulting LLP. The research for this report was informed by a survey of 100+ brand marketers; one-on-one interviews with 30+ senior advertising executives; and research focused on better understanding the key trends affecting marketers, media partners, and consumers.
Endnotes
1 “The antidote to wasteful ad spend–where marketers go wrong,” Marketing, May 22, 2019.
2 Jia Wertz, “Don’t spend five times more attracting new customers, nurture the existing ones,” Forbes, September 12, 2018.
3 Theron Mohamed, “’The brand is special’: Warren Buffett called on American Express’ CEO to protect its reputation during the coronavirus pandemic,” Business Insider, May 30, 2020.
