The old adage ‘early to bed, early to rise, work hard and advertise’ remains the doctrine for most of our clients, albeit being articulated in different iterations.And generally most clients have fully reinstated their advertising budgets ‘post GFC’ but, we observe, in a markedly different form!

Clearly, the advertising approach has shifted from a foundation of ‘brand’ activity to ‘retail/opportunistic’ activities, which is an interesting trend and we observe one not confined to the clients of Fenton Stephens. So what has influenced this shift to demonstrable ROI activities versus the more ethereal judgements about brand investment?

I’ve asked this question many times and the answers are remarkably similar: ‘We feel more comfortable demonstrating to the board that we are getting the most bang for our buck.’ A contention to this line of thought is; on what basis is this judgement made? And therein, the old chestnut of measuring brand equity comes in. If we invest $x in building brand equity, how do we measure the ROI? Whereas if we invest $x in retail activity, we can demonstrate ‘y’ sales. Job done. Board happy.

This is an over simplistic view and one that ignores two main issues:

(i)    Brand equity can be measured, monitored and managed. There are many research methods that simply and adequately illustrate how your brand equity compares to the competition and movements – positive and negative – occur over time and in relation to brand building advertising.

And secondly,

(ii)   Being ‘in’ the media market with planned and continuous activity has its benefits! One, you can plan and negotiate a rate based on full year activity and two, if distress or initiative based opportunities arise, guess who is approached first!

Which brings us to the crux of the matter. Any marketing activity will activate two, quite interdependent responses: (a) a communication response (like sales) and (b) a brand response (an effect on Brand Equity). Excellent marketing is about measuring and managing the trade off.

A proportion of the total advertising budget should always be allocated, at the outset of the advertising period to ‘brand’ work. Plan and negotiate a 12 month plan. Put in place a brand equity monitoring reporting mechanism. And then allocate another proportion of the advertising budget to ‘retail’ work. As logical and sensible such an approach may seem, it’s surprising how few are taking this approach. And who knows at what ‘expense’.

Start with the Australian way; go halves. Half to brand and half to retail. Monitor and measure the responses to both. And then take decisions that will improve on that.

Roger Stephens