When planning their brand communication, many companies focus on short-term KPIs, as they can be quickly optimized for success. However, an inconsistent strategy damages the brand – and more than half of the value of advertising is only created in the long term. Crossmedia’s head, Markus Biermann, is concerned about the future of brands.
The world of marketing, sometime in the near future: companies have started digging their own graves. By abandoning consistent brand communication, they have gradually destroyed values that they had built up over time in painstaking effort. Media in-house silos burden their profit and loss account, obstructing the view to a neutral way of looking at things. Marketers no longer ask their agencies to make recommendations, evaluate pros and cons or think in scenarios. Now, all they ask for are dashboards. Every new strategy is always only as good as yesterday’s KPIs. Creators and brand makers have become submissive dependents. Slaves to a short-term mania called optimization.
The problem: The constantly-shortening time horizon that provides the backdrop against which communication successes are considered. However, more than half of the value-creating effects of advertising only occur in the long term – and only about one-fifth can be depicted in short-term attribution modeling. It is these, extremely short-term, KPIs that are used to calculate analyses for the future. And yes, admittedly it doesn’t feel all that good for anyone involved, but at least everyone is really busy on their way to… somewhere. And even if you do have a suspicion that you’re about to get lost, you’d rather accelerate than pull over and reconsider the path you’re taking.
This is a rat race in its purest form. And, making matters worse: it’s a one-way rat race. And no – unlike the introduction suggested by this text – this is not a future scenario. It is already a reality! We are currently experiencing a massive increase in advertising expenses in various markets, yet with a simultaneous collapse in brand values. This is hastily and unanimously attributed to the declining reach of the classic media, across all channels and throughout all hierarchies, which is actually nonsense.
Still, the actual problem is to be found elsewhere. If I only pay attention to short-term KPIs and use them as a benchmark; if I grapple with the optimization of compartmentalized parts, and suppress the fact that brands are not bought for their price, then it shouldn’t come as any major surprise that brand values erode, should it?
However, companies prefer to be sent out into the digital world by actionist supervisory boards; optimize their short-term success without a clear strategy until they get saddle sore, before then deciding to take their money to monopolists who will create a competitive advantage for themselves from their data the following day. At the same time, they speak loudly about quantum leaps in marketing, ironically overlooking the fact that quanta are actually one of the smallest physical units. The only thing that seems to count is being agile and doing a lot – at least that’s the name of the game.
The brave new marketing world does not necessarily have to end in the somber scenario described above. It is still about striving to reach a utopia far away from reality. However, it should slowly be becoming clear to everyone that the time to act has now come! Companies need more courage again – courage to think further than the next, short-term horizon and short-lived success. They need the courage to seek advice that is independent, neutral and honest. And they need to stay consistent, and be aware that this has a price, a price that they should be willing to pay.
And yes, an agency is very much allowed to share the risk. After all, it’s about winning together. As partners, working side by side. Bearing this in mind, I would like to take this opportunity to state clearly and unequivocally: Dear advertisers, let us reanimate the most valuable thing you own – your brand, by working together! Only then will we succeed at achieving the real transformation, become more independent of Google & Co. and leave the one-way rat race behind us.
This article was first published with HORIZONT.NET on 11/19/2019.
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