Marketing with an Investor Mindset

Having had a discussion with a client about the 2024 marketing plan and budget allocation, including the right combination of brand-building and short-tern sales activation spend, made me think about budget discussions and how to convince investors.

What does an investor mindset mean?

Marketing is meant to deliver profitable business growth and therefore, budget conversations should focus on the investment needed to achieve the growth ambition, instead of only debating the cost.

Where to begin?

Always be data-based, and analyse the available data. Understand which marketing investment has delivered profitable business growth and which one hasn’t. Go one step further and understand the reason for this result – the “why”- to draw the right conclusions.

Propose a plan that:

1. Invests in activities that have driven growth

2. Cuts ineffective spending and re-invests in proven high-growth plans

3. Tests & learn to prove effectiveness based on a pay-as-you-go approach.

Key Principles - leveraging insights from Les Binets, Peter Field & Bryan Sharp

• Address the whole market (new & existing customers) to grow sales – brands grow by converting new buyers (who are already in the category) but selling to existing customers is typically more cost-effective.

• Combining long short-term investment is proven to be the most effective over time – 60% brand building and 40% sales activation has shown to deliver the optimum effects, with up to 2 x efficiency vs. investing in one or the other. Short-term activations (e.g. promotions, performance marketing) are vital for efficiency. But long-term brand building drives growth and profit, also by reducing price sensitivity.

• Leverage famous and creative communication: Campaigns that reach fame are up to 4 x more effective and accelerate success.Creative campaigns deliver better ESOV (excess share of voice).

• SOV matters and its importance increased over time due to the advertising market having become more cluttered; SOV > SOM – brands tend to grow; SOV< SOM – brands tend to shrink.

• Measure and evaluate long and short-term results for all marketing activities: Short-term e.g. short-term sales, on & offline response, conversion.Long-term e.g. Business performance, price elasticity, brand equity, creativity & fame.

Brand building work is strategic, but only if it delivers business results just like performance marketing which must also deliver brand equity to deliver brand health and penetration growth.