Andrew Willshire: Focus on the short term and the long term will take care of itself
One of the more regular events in marketing is the high priests descending from their mountain to condemn those humble sinners who have succumbed to the illicit temptations of short-term thinking. Like bible-thumping preachers, they warn of hellfire and damnation if we don’t change our ways. The trouble is that I’m not sure it’s making advertising better.
And so, like a pound-shop Martin Luther, I step forward and nail to media’s cathedral door, not 95 theses, but just one: Create a strong short-term effect and the long-term will take care of itself. Before digging any deeper, let me state some caveats:
- The product or service needs to be good. As Bill Bernbach said, nothing kills a bad product quicker than good advertising.
- The advertising must not be tied into a price promotion that will undermine brand value in the long term. Any fool can sell a product by slashing the price.
- The measurement must be robust. I’ve discussed digital attribution in depth here; suffice to say, it’s not the droids I’m looking for. Good econometrics will provide excellent estimates of short-term sales uplifts. Measuring long-term effects via econometrics is difficult and imprecise due to the diffuse nature of repeat purchases and the lack of an independent reference with which to calibrate estimates. For measuring the long-term impact, loyalty-card data, which enables tracking of individuals’ repeat purchases, is superior.
- I’m talking about real metrics. Click-through rates and brand awareness indices doth butter no parsnips; profit is the only metric worth a damn. And provided that your price remains constant, sales volume is an excellent proxy for profit. That’s right – marketing is about selling. Who knew?
Despite the distinct sound of pitchforks being sharpened in the distance, I will press on. The key question to the advocates of focusing on the long-term is this: how can selling a good product in the short-term possibly harm the long-term value of a brand?
READ MORE: How to balance short-term impact with long-term results
However much we love our campaigns, no amount of advertising beats the product being in the living room, on the kitchen shelf or sitting in the driveway – a constant reminder of the brand and of a promise fulfilled.
As such, the best predictor of which brand someone will buy in the future is the brand they buy already – it’s the most ‘mentally available’. In the car market, repeat purchase rates can be as high as 70%. This isn’t just down to some abstract notion of brand love either. As Byron Sharp put it: “Loyalty is often more a function of habit, familiarity and lack of caring rather than unbound devotion.” Marketers should be aiming to create that habit and familiarity.
Most measures of brand awareness are also strongly correlated with market share, regardless of the amount of advertising. The combination of mental availability and post-purchase rationalisation means that measuring brand awareness will tend to reflect recent purchases rather than drive them.
