Is effective marketing necessary in rebranding? In The Drum's Prediction Deep Dive, Hallam's Ben Wood tackles his obsession with attribution in favor of a long-term strategy.
Despite news that the UK can avoid a recession (for now), many expect consumers and businesses to cut back on spending in 2023, when high inflation kicks in. With consumer confidence at its lowest level since 2008 and demand declining across all categories, it's time to rethink your growth strategy.
Next year will require a change in the approach to digital campaigns; A balance between data, strategy, branding, direct response, technology and creativity. If you rely on increasing leads and sales based on current market demand, you run the risk of reducing or even reducing next year's sales.
But we don't need a long list of changes to consider; Only two principles can fundamentally change the course of marketing activities.
1. Stop obsessing over digital attribution
We're entering a new era of privacy-driven marketing metrics. Our ability to directly link advertising to sales growth has been weakened by measurement issues resulting from improved data protection and the inevitable loss of third-party cookies.
Now we have to put aside our obsession with numerical attribution and accept the ambiguity that comes with switching to data modeling (essentially filling in the blanks) provided by platforms like GA4.
Reporting and attribution is one of the biggest challenges facing marketers in 2023; These issues lead to increased attention to alternative measurement methods, such as marketing mix modeling (or econometrics).
The problem with digital recommendation models is that they focus too much on the short-term direct effects of marketing, focusing on activities like paid search and shopping ads. But it will be difficult for platforms like Google Analytics to capture the growth (the number of sales associated with ad interactions).
Our one-stop measurement approach is one of the main reasons for short-term marketing. This is the main task that needs to be solved in order to accurately evaluate the effectiveness of various marketing activities. Google suggests a way forward: supplementing numerical benchmarks with econometrics to "triangulate" ROI.
Investing in alternative solutions like econometrics and reducing our reliance on digital attribution will help us make more decisions about budget allocation and what really impacts our bottom line.
2. Rethink the concept of "effective" marketing.
Performance marketing is a classification of paid search, social media advertising, search engine optimization, conversion rate optimization and many other digital marketing tactics. This classification is misleading; Productivity is not just about these activities.
Research shows that digital attribution overemphasizes short-term tactics and reduces the marketing impact of other long-term investments, such as TV and radio. Both can lead to significant improvements in sales figures.
Brands like Airbnb and Adidas have recently admitted to investing in short-term direct response advertising. Since then, these brands have focused most of their budgets on brand building activities to try to drive business growth.
There's a common theme here: brands achieve initial success through short-term marketing tactics that are easy to measure with digital attribution. We do X if we know we can compress Y, so we spend more budget on these tactics at the expense of things that are hard to measure but (in many cases) can have a big positive impact on the business in the long run. performance range
The research most often cited in support of this thesis is from the Ehrenberg-Bass Institute, which shows that up to 95% of customers are not "in the market" to buy your product at any given time. Of course, this will vary depending on your category and frequency of purchases, but the principle remains the same: there will always be more people in a category who are not ready to buy than there are in that category.
The cost of not investing in your brand
In the eventful months ahead, your brand needs to strike the right balance between long-term brand building activities and targeted direct response activities. When current demand drops, it's time to invest in branding to increase mental availability, ensuring customers not only know your brand exists, but what it does and stands for.
It's time to improve your ability to assess the impact of long-term marketing investments on a business; We know we can't rely solely on digital attribution to drive marketing investment in the face of shrinking budgets. Marketers can no longer afford the long-term consequences of years of brand ignorance.
To learn more about the year ahead in and around marketing agencies, check out our Outlook hub.