The two most important charts in marketing - and why they matter now more than ever
There are two charts that every marketing and communications professional needs to know and take to heart. For me, they really are the north stars of our business.
The first was first published in 2013 by Les Binet and Peter Field in their game-changing book based on the renowned IPA Databank, The Long and the Short of It.
This chart is remarkable because it gets as close as I have ever seen to summing up the essence of the entire marketing project in one slide (Fig. 1).
Fig. 1: from Binet & Field, The Long and the Short of It, 2013
It shows that the two main marketing mechanisms – brand building (red line) and sales activation (yellow line) – work in very different ways, and that this difference has profound implications for brands and the people who manage them.
Brand building is about developing emotionally compelling messaging that over time creates an increasingly resonant and consistent set of unconscious meanings for the brand among all its potential buyers. This means that it is more likely to come to mind in buying situations. (For all you planning nerds out there, this effect relies on our innate ‘System 1’ fast-thinking mode made famous by Nobel laureate and behavioural psychologist Daniel Kahneman. As he put it, “System 1 operates automatically and quickly, with little or no effort” using the many pathways in the brain that enable our unconscious mental processes.)
Activation, on the other hand, is about rational, consciously processed messaging (typically offer-based), focused on current customers. This kind of communication engages Kahneman’s ‘System 2’ slow- thinking, “effortful” mode and demands attention. It also creates little or no emotional resonance in the mind of potential buyers.
The crucial point is that, just as System 1 and 2 are in our brains, this is not an either/or proposition: successful brands need both types of activity to thrive. The issue is achieving the right balance between the two.
And getting that balance right is a crucial (possibly the crucial) part of brand management when it comes to communications.
Fig. 2: from Binet & Field, Effectiveness in Context, 2018
Which brings us to the second most important chart in marketing and communications (Fig. 2).
This chart shows that, in the vast majority of cases, brands that are striving for long-term success should be spending well more than half of their budgets on brand-building activity – and in some cases a far greater proportion than that.
Unfortunately, the evidence suggests that this simply isn’t happening. Indeed, Binet & Field’s latest work (Effectiveness in Context, 2018) shows that overall campaign effectiveness is declining, both in terms of scale (effectiveness) and rate of return (efficiency).
There are a couple of reasons for this. One is that we are simply not spending enough on paid-for communications – a subject for a future piece.
The other is that we are concentrating more and more on the short-term ‘sugar high’ of activation whilst ignoring the need to invest in the longer-term future of the brands we steward. Simply put, we are getting the balance wrong – and not by a little.
In my view, there a number of factors behind this increasing and unhelpful obsession with activation.
First, I think that we are increasingly confusing the nature of our media choices. Media that are in fact best suited to activation (I’m looking at you, Facebook) are being sold hard as capable of building brands. And the evidence for this claim is, to say the least, tenuous. After all, if Facebook is such a great brand-building tool, why does it – alongside other members of the ‘Big Four’ – now spend so much on TV?
Second, too many agencies have learned to look through the wrong end of the telescope. Years of being yelled at by clients to develop ‘digital/social first’ ideas mean that they often start creative projects with an inbuilt bias towards activation, whether they know it or not.
Third, the frankly shameless re-branding of dull old DM as ‘performance marketing’ has led to the heroic assumption that brands can now be built this way, despite the lack of any real evidence that this is possible.
What is clear is that this is simply not sustainable. If we continue on this path, within five – at most ten – years, the brands we profess to care so much about will be but hollow simulacra of the brands we know today.
As 2020 starts to unfold, we should all ask ourselves – whether client or agency side – are we planning to spend enough this year on the kind of activities that will make a real difference to the long-term health of the brand? And if the honest answer is ‘No’, what are we going to do about it?