Gareth Price wrote an article titled Thinklong.
« I believe the future of brands requires collective action to combat short-termism… Thinklong’s primary ambition is to create an environment in which brands can flourish by tackling the source of the short-term pressures they face… As proponents of behavioural economics would highlight, we can’t hope to tackle the issue by changing attitudes, these will follow behavioural change. »
CAUSES OF SHORT-TERMISM
« With CMO tenures the shortest of all executives, it’s not surprising marketers face growing pressure to deliver instant results. Indeed, a recent IPA study discovered that the proportion of advertising campaigns that ran for less than six months more than quadrupled between 2006 and 2014. »
« Boardrooms clearly see enormous value in brands. All too often, however, an excessive focus on achieving immediate returns undermines their ability to deliver long-term profit growth; merely serving to increase price sensitivity or shrink the number of prospective buyers the brand communicates with. »
« We [advertisers] should look at our own complicity. The pursuit of more cost-efficient reach, rather than where is most effective; our infatuation with what new technologies make possible, rather than with what works; and the preoccupation with achieving an immediate ROI, rather than a larger profit in the long-term, not only risks undermining the effectiveness of our campaigns and their ability to build brands, but has arguably manifested in the biggest threat to the advertising industry to date: the rampant adoption of ad-blocking. »
« Brands are a product of their history, generating rents for a company based on the reputation and equity they have built over the years.
Strong brands extend and enhance what the company is offering. They also create value for shareholders by increasing cash flows and reducing the cost of capital (Doyle, 2000).
A study by Citibank found that companies with well-known brands outperform the market by between 15 and 20% over a 15-year period…
A strong brand also enables a business to maintain that price premium so critical to profit by creating intangible differences between products and services that offer little tangible difference to competitor offerings. »
« Brands remain one of the most valuable assets in business and yet, not only are companies failing to invest in them, they are increasingly making decisions that erode their value. »
GOVERNANCE WHICH FAVORS INVESTING OVER TRADING
« In France, under the Florange Act, investors who have owned shares in a company for more than two years are automatically entitled to double voting rights. This provides greater stability to boards to set company strategy prioritising long-term interests. »
PUBLISHER BRAND vs. ADTECH
« Increasingly, publications are losing a significant share of revenue to adtech intermediaries.
Mediatel reports that in worst case scenarios, for every pound an advertiser spends programmatically on the Guardian only 30p goes to the publisher.
Alexis Madrigal writes: “The ad market, on which we all depend, started going haywire. Advertisers didn’t have to buy The Atlantic. They could buy ads on networks that had dropped a cookie on people visiting The Atlantic. They could snatch our audience right out from underneath us.” …
Disregarding the context of the placement of an ad to reach the same person for less elsewhere ignores the fact the signal is proportional to both the content of the ad and the value of medium it appears within.
In addition to providing signalling value, advertising on digital newsbrand sites is 80% more likely to be viewed than advertising on non-newsbrand sites.
Rather than building an endless list of sites to block, advertisers must focus their investment on media that carries brand value. All digital reach is not equal in its effectiveness. »
« In an article in Harvard Business Review, de Langhe et al (2017) reference several research studies in cognitive psychology that demonstrate how the human mind struggles to understand non-linear relationships.
Despite the evidence for price having the biggest effect on profit, managers still focus more effort on driving volume by reducing prices; believing profit to be a linear function of sales. »