Two Hidden ROI Secrets in Branding

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Branding is key to most businesses, so many measure brand progress. It's common sense, I believed. But something changed my mind last week. I learned that most - if not all - brands are missing one of two major brand opportunities. I realized that all the brands I know are either "consideration lovers" or "blind performers”. Both have a big blind spot to fix.

Blind Performers

Two of the marketing mix modeling projects we did this summer were for companies that have not strategically invested in brand.

One was a food brand with its own stores that relies on "foot traffic". Because this works well, the company's leaders are not entirely convinced that advertising would work for them. So the CMO ran a test. The advertising test, which focused on out-of-home displays near the stores, was designed to drive short-term sales. The intent was to generate immediate sales so that everyone could "see in the data" that it was working.

Unfortunately, there was no clear correlation with in-store sales. Conflicting negative PR, whether and the strong seasonality effect of the business where suspected reasons. So we did marketing mix modeling.

The short-term ROI seemed to be about 1.5x to 4x (depending on the campaign). You can hardly see this in correlations with sales if your marketing budget spend is thin. But the TOTAL (!) ROI was always greater than 9x. Advertising also works in the days following the impression. More ads build brand awareness that triggers sales in the following month.

Offer an investor an opportunity with a proven 900% ROI, how likely would he say "no"?

Unlikely. But Blinder Performers resist. They just don't “believe”.

“Offer an investor an opportunity with a proven 900% ROI, how likely would he say "no"? In branding, many do.”

Who are the blind performers?

Many retailers are "blind performers". Often smaller than larger companies are critical to branding because they are tight on big budgets.

Also, fundraisers are so focused on getting a return on their spend that they miss the biggest lever they have. We just did a mix model for an NPO where all the channels were using direct marketing to donors and prospects. It turned out that at least half of the impact was not an immediate donation or plan upgrade. The touchpoint increased the likelihood of considering the nonprofit later in the year when other "category entry points" like Christmas occur.

The learning was not just that the channels had a higher return than they thought. The lesson was that the direct marketing piece was not just a sales tool, it was also a brand-building tool. If you could optimize for brand impact, you could increase long tail donation effects. In addition, it suddenly made sense to design direct marketing for brand building and then combine it with subsequent activation campaigns.

The final recommendation for "blind performers" is to wet the feeds with brand building and measure the impact. You can measure brand impact without marketing mix modeling. Run holdout samples or holdout stores or regions and compare long-term returns.

Inspire CEOs and CFOs with facts, analysis, stories and rationale - then a 2x payback is doable.

Consideration Lovers

How do you measure your brand? Companies measure awareness, image fit, brand loyalty, but most importantly consideration and purchase intent. In essence, they measure surrogates of the customer's likelihood to buy the brand.

While all of this makes sense, it misses an important value of a brand: its ability to command a price premium.

Very few brands today systematically track their ability to command a price premium. Instead, a few use those questionable brand equity measurements from agencies like Interbrand in lack of a proper alternative. 

Why is this potential so untapped today? There has been no viable methodology to cost-effectively measure this premium on an ongoing basis.

Guess what, that has changed.

With Supra's Implicit Price Intelligence measurement, we uncover a product's entire price demand curve in a three-minute survey with as little as one hundred category buyers. Corporate brands can now test their core products against their key competitors on an annual basis with moderate cost and high accuracy. As a result, you get

• The price premium your products can command and its impact on the bottom line.

• Uncover opportunities to optimize your pricing to maximize profit potential

• A more accurate measure of purchase intent, as it now relates to your products, not just the brand - which cannot be purchased on its own.

Everyone is measuring brand consideration, but most are missing out on measuring the brand's potential to drive margins and to continuously optimize price.

Isn't that interesting?

The Two Blind Spots of CMOs

Which type is your brand? 

If you are a blind performer, there is a lot of potential in harnessing the power of the brand. Research shows that across categories, this accounts for approximately 60% of all impact. 

Measure the brand impact of advertising and your company will invest more. 

If you are a consideration lover, supplement or replace brand tracking with brand price tracking. It is more accurate, more informative, and helps you optimize pricing to increase profits.

"What gets measured gets done”

Measure brand premium and your company will be incentivized to drive it.

I hope you will agree with me that there is still so much to improve in marketing. It takes the right insights. Just look deeper. Apply the right mindset and cutting-edge research technology, and the sky is the limit.

THIS is how you can 10x your marketing impact.