WARC’s Anna Hamill interviewed Les Binet in October 2020. The full interview is here: Les Binet on why long-term marketing matters in the age of short-termism. Highlights below.
« Brand building is about building up these mental structures but, crucially, it’s still about behaviour. It’s about getting people to change their behaviour over the longer term. To put it in financial language, activation is about getting an immediate response and, ideally, an immediate sale but maybe nothing more. Brand building is about getting a long-term flow of sales, revenue and profit, now and into the future. »
« You can do both at once, but if you try and do that, you’ll probably do neither job very well. It tends to be better to have some of your campaign focused on long-term brand building and some of your campaign primarily focused on short-term activation. These two things enhance the other, so there’s synergy between them. »
« Brand building can also reduce price sensitivity, so it can increase margins. »
« Brand building makes activation more efficient. You’ll find that if you do strong brand building, short-term metrics will go up for your activation. Ultimately, the reason that companies need to do brand building is that they make more money in the long-term and the short-term. »
« Brand building is about selling. It’s about revenues and cash flow, but it’s about durable revenues and cash flow, over longer time periods. We have to help CFOs to understand that some marketing activity gives you an immediate short-term delivery of sales, while other activity increases the ability to sell through all channels and increases the long-term flow of money into the company. Once you reframe it in that language, then I think you can start to have a grown-up conversation. »
« Make sure that the overall budget is of the right order of magnitude, because you if shift to brand building without spending enough, you’ll still fail. »
« Small brands need small budgets, big brands need big budgets, but if you want to grow, you have to punch above your weight. The share of voice rule tells you that what matters is the difference between your share of voice and your share of market. As long as you set your share of voice above your share of market, you should get some growth, all other things being equal. »
« In the work that Peter Field and I have done we talk about the 60/40 rule, but in our most recent book, Effectiveness In Context, we also modified that rule for different brands in different categories at different stages of development, different price points, etc. »
« The most important brand metrics are to do with sales, profit, price sensitivity and hard financial spend. What’s the base-level of your sales when you’re not on promotion? What percentage of your sales are discounted? You want strong base-sales and low reliance on discounts. What’s your price sensitivity? You want low price sensitivity so that you can have strong, firm prices and strong margins. »
« It’s important to understand that brand building is not solely about the long-term. Any advertising or marketing campaign that’s effective in the long-term will also have some good short-term effects. But the opposite is not necessarily true: not all short-term effects lead to long-term growth. So interpret short-term metrics with caution. »
« With the arrival of e-commerce in particular, and digital metrics in general, all of business is now afflicted by the same problem. All businesses now have short-term metrics, which can distract them from long-term growth. I think that’s the real reason why business is becoming short-termist. It’s not quarterly reporting. It’s not the short tenure of marketers. It’s the data. »
« “Big data” can cause problems here, because most Big Data is actually short term data. If companies are going to grow for the long term, they don’t need big data, they need long data. They need to track things over long periods of time. »
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