Marketing Truth #2: Strong brands have an effectiveness advantage

This second installment in WARC’s “Marketing Truths” podcast series looks at how organizations that put the work into brand-building can reap the benefits, and improve both short- and long-term outcomes. The first episode, “Effectiveness is as important as efficiency,” dives into why it is imperative that CMOs help their organizations understand why effectiveness is as important as efficiency when it comes to marketing investment.

Many of the conversations currently happening between marketers and agencies center on finding the optimal balance between brand and performance campaigns.

More specifically, many industry insiders believe that the scales have tipped too far in favor of performance marketing and that making the case for brand campaigns is more challenging given the rewards are less immediate.

What matters for marketers

Let's start with the fundamental goal of marketing, which is to lead people to understand why a product or service is superior, to differentiate it, and to trigger customer action – ideally, making a purchase.

Short-term marketing activity, or sales activation, is used to trigger an immediate sales lift, and a tangible benefit to that quarter’s financial scorecard. Long-term marketing activity, like brand-building, however, is needed to support and sustain growth and ensure the business has a steady supply of future demand from new and returning customers.

Brand-building’s contribution to a company’s finances, though, is harder to track than its performance-led counterpart, especially as we've moved into digital channels and the quick and easy metrics that performance marketing is focused on.

But finding that balance between short and long-term activity is the key to sustaining a thriving brand over time, even as getting that balance right has gotten harder.

What is sometimes lost in the deliberations over percentages and channels is the advantage built in for marketers who have consistently put time and effort into brand-building. The strongest brands tap into an emotional core; our collective hopes, individual aspirations, or the feeling of shared experiences. Strong brands also bring great advantages to organizations, both internally and externally.

Colin Chow, global managing partner for North America for TwentyFirstCenturyBrand, is a firm believer that balance is key to building brands today. Chow and his team work with clients such as Pinterest, Lego and PepsiCo.

“In 2024, all leaders, not just marketing leaders, are feeling intense pressure to balance these conflicting agendas between profit, people and purpose,” he said on the WARC podcast. “We believe that brand actually is the thing in the business context that has the power to align, or balance, these competing priorities into a flywheel for growth.”

According to Chow, an influential brand drives real value for companies on four dimensions: employee; community; financial; and cultural:

• For employees, a strong brand drives higher morale, and boosts productivity and retention. All of that has cost savings and impact.
• Among communities, strong brands influence choice and help sustain price premiums. A strong brand creates loyalty, and drives growth and efficiency across every part of the marketing funnel.
• From a financial standpoint, there's a clear correlation between brand strength and stock market performance.
• Finally, culturally resonant brands have a disproportionate share of voice, which drives a public relations narrative and attracts higher quality partners at a lower cost.

A strong brand allows marketers to balance short-term and long-term marketing goals, and to navigate all of these agendas, which delivers demonstrable benefits.

The power of emotion

In their report, “The long and the short of it,” effectiveness gurus Les Binet and Peter Field explain that in brand campaigns, advertising “acts as the bedrock to support complimentary activation ideas that kick start the initiative.”

Emotional appeals are quicker and easier to process than rational persuasion, and emotional campaigns work when we aren’t necessarily paying conscious attention. The killer creative idea campaigns inspire people to share their enthusiasm for a brand with one another, thereby amplifying positive attributes, which leads to more sales.

“Our ambition is to build the most influential brands of our time,” Chow said. “When I say ‘influential,’ I don't just mean commercial success or fame. Those are great symptoms of influence.

“But we really believe that in any given decade, there are two to three hundred brands around the world that are going to shape the way that we as humans work, live, play and communicate. And we want to help build as many of those brands as possible.”