'How to keep your CFO on board for brand-building' by Les Binet
Too significant and good, not to share. Three shameless copy-paste Q&As from the WARC interview
Challenge to make the case for long-term brand investment
WARC: One of the things that we've heard out of the WARC Toolkit survey is that (marketers) have a challenge making the case for long-term brand investment to convince the CFO, who is dubious of giving that money for something that they can't see is working straight away. How do they make that case?
Binet: “The first thing is to start talking the language of finance. We don’t help our case when we talk about brand-building in terms of awareness, image and ‘touchy-feely’ terms. Brand building is about selling. It’s about revenues and cash flow, but it’s about durable revenues and cash flow, over longer time periods. We have to help CFOs to understand that some marketing activity gives you an immediate short-term delivery of sales,”
Over-reliant on performance marketing
WARC: We’ve recently seen Adidas and eBay acknowledging that they had become addicted to performance marketing and were looking to make a change. How do you think some of these enormous brands have become over-reliant on performance marketing?
Binet: “The addiction to the short-term is not a new phenomenon, but it has got a lot worse. One of the problems is that (for) short-term activities, you get immediate feedback: responses, clicks, or short-term sales. If you are a marketer who's spending money and nervous about what you're getting for your money, you can immediately see that this stuff pays back. It's become easier and easier to see these short-term effects because we have more granular short-term data that comes through faster and faster. With the arrival of e-commerce in particular and digital metrics in general, all of the business is now afflicted by the same problem. All businesses now have short-term metrics, which can distract them from long-term growth. I think that's the real reason why business is becoming a short-termist. It's not quarterly reporting. It's not the short tenure of marketers. It's the data.”
WARC: Is there any specific metric that a brand should be looking for as an indicator that they should make a change? And if they do make that change, what type of metrics seem to see the most improvement?
Binet: “The most important metrics to look at first are financial and business metrics… If you got a strong brand, you will see it in the financials. If you've got a weak one, you'll see it in the financials. The most important brand metrics are to do with sales, profit, price sensitivity, and hard financial spend.
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In the media
Les Binet on why long-term marketing matters in the age of short-termism
Spoiler alert, it is all about the finance. From the challenge to make the (business) case for long-term brand investment, over-reliant on performance marketing, to the key metrics.