Neglecting brand to focus on short term outcomes like sales will hurt revenue over time, according to new research from Deloitte. That view is shared by Tourism Australia CMO, Lisa Ronson.
“You can’t have a robust sales outcome without a strong brand, it just doesn’t happen,” Ronson said. “Consumers need to make an emotional connection when they are paying for things.”
Ronson was speaking to media at the launch of a Deloitte white paper, ‘Shared stories: building brand in the digital age’ which was commissioned by Facebook.
The research, which is based on a survey of more than 300 senior marketers from Australia and New Zealand, found only 17 per cent of Australian marketers see building their brand as their most important objective, behind sales and building customer engagement.
And a quarter of marketers think their brand has stagnated over the past 12 months. Of those that had stagnated, revenue had declined 13 per cent according to the report.
Kareene Koh, Partner, Deloitte Digital, said failing to recognise the importance of brand comes at a cost to business.
“Our survey found that businesses whose brands stagnated over the past year also saw their revenues fall by 13 per cent on average over this period. For a business with annual revenue of $1 billion, this represents a potential fall of $130 million in revenue.”
“So whilst on the surface they were focusing on sales, by deprioritising brand we found that actually revenue was starting to suffer,” Koh said.
Ronson said the struggle between long term and short term goals has been happening for far too long.
“I’ve worked in many industries over the years and if you stop investing in brand to get a very short term outcome – you might not see the results in three months or six months – but after a while you will see your brand start to decline and it will cost you. You will have to spend twice as much as what you were spending before to try and get that brand value back to restore your sales outcome.”
Ronson said it is important to manage expectations within an organisation and use a combination of campaign measurements over a longer period of time.
For example, Tourism Australia’s $36 million Dundee Superbowl campaign looked at early indicators like engagement, shares and likes. That was followed by brand health measures in the first week or two and then sales results.
For a category like travel conversions may take months to appear, but Ronson said the “early indicators are really, really strong”.
“After we revealed it was actually a tourism ad for Australia, we went into sales mode. We created a halo, we got people to lean into our brand and be interested in our brand and then we started selling to them through key our key distribution partner network, through our airlines and with our media partners.”
Brand Building in the digital era
The research findings were presented at Facebook’s ‘Brands with a Pulse’ event in Sydney last week.
Naomi Shepherd, group industry director at Facebook Australia and New Zealand, noted that the basics of building a brand haven’t changed but consumer behaviour has, most notably with the increase of time spent on social and mobile.
The event also aimed to address the view that Facebook is a highly targeted conversion channel by emphasising the role social and mobile plays in brand building. The argument goes that consumers are spending so much time on their mobiles there’s an oppurtunity to build emotional connections with them while they scroll or watch video, not just try to try to sell them a product they clicked on elsewhere.
In terms of ad formats, Shepherd said Instagram’s Stories was an ideal format for brand marketers because it is fullscreen, immersive and interactive. During Q3 Facebook will extend the Stories ad format from Instagram to Facebook, giving advertisers more locations to run their mobile-first ads.