We were struck by a piece that Mark Ritson wrote this summer. In it, he articulated the cry of pain he hears from many CMO’s about their lack of persuasion when it comes to their CEOs investing in long term brand building. It’s a challenge we are often presented with by clients, especially those who have run successful and highly profitable performance campaigns over several years. They find they have maximised the revenue they can generate from pure performance investments; they are faced with diminishing returns from any incremental budget they deploy; but they are unable to switch budget from performance to brand or to secure additional budget for that task.
Victims of our own success?
All of our clients in this situation have two things in common. Firstly, they have a track record of producing consistent near-term net revenue returns for their organisation from the investment budgets they have been entrusted with. Secondly, they know that they cannot promise the same level of returns and absolutely not within the same time scales, if they are secure the brand budgets they seek.
But, and here’s the rub, they cannot quantify the net returns that they will generate, nor fix a time scale to them. So faced with uncertainty the majority of CEO’s settle for the devil they know and refuse to fund the brand budget.
It turns out it’s all down to the metrics
Back in 2001, we started this business because we found it easy to do what other agencies and most clients found hard or impossible. We built bespoke attribution tools to prove that performance media investments drove business outcomes. Typically, very short term or immediate outcomes. See a TV spot- buy an insurance policy. Engage with your Facebook feed- enquire about joining a gym.
Fast forward twenty years and performance attribution has come of age. All addressable media have embedded attributes that enable tracking of views, interactions, and commercial outcomes. And tracking what we can track has become a drug- and rather like the sugar hit from a chocolate bar. The trouble is these short-term metrics don’t meet the needs of a long-term investment. If we want to run a successful Marathon we need pasta not chocolate.
Unfortunately, totally new metrics won’t wash
CEOs and CFOs are very happy to invest in performance media budgets because they understand the short-term metrics. Clicks or calls soon convert into cash, and they can see the net returns within a budgeting period. By default, our metrics fit with how they view the world, and all is well. When we move to the metrics of brand, we are suddenly speaking a different language. Awareness, understanding, consideration and perceptions are not actions. Suddenly Marketers are from Mars and CFOs from Venus. And budget there is none.
A “translation” tool is needed
Having built many successful performance programmes for clients these last two decades, we have encountered this challenge many times. For the first decade we assumed each client solution was totally bespoke; different metrics, different measurement, different modelling. But fast forward another ten years, and we have codified our learning.
Although each brand must change different attitudes and behaviours to accelerate revenue growth, these changes can be linked to the behaviours and metrics that a CFO and CEO will find familiar and reassuring.
In other words, how (and crucially when) long-term softer metrics integrate with and influence the short-term metrics a CMO needs to secure a budget. The key output is a five-year cash flow model that shows what returns one can expect month by month, and when an investment will turn cash positive.
The codification has resulted in a process (FlightPath™) and a tool (FlightDeck™), both of which are jolly good at helping our clients secure both budgets and career progression.
The detail, as ever, is a longer story. To find out more, please contact our New Business Director Emma Thwaite.