You should know your marketing velocity

The art of marketing effectiveness. A summary for (content) marketers and strategists.

(Warning: it's a long read)

"You Shall Know Our Velocity!" is a 2002 novel by Dave Eggers. It was Eggers's debut novel and one of my favourite books of all times. It tells about two friends, Will and Hand. Will has surprisingly come into a large amount of money. As a result of such large sum and other personal issues the two friends plan to travel around the world taking a week out of their lives and visiting obscure countries, trying to give away all the money, bit by bit, to people they arbitrarily decide are most deserving - hence the title: the plan is to give all money away in 7 days. However, without a solid set of criteria, or a definitive direction in their plan, their quest proved to be surprisingly difficult.

When marketers design marketing strategy, they are supposed to know their velocity too. They should understand how to balance fast-return (and short-term) marketing techniques with slow-return (and long term) brand building. They should know how to invest their marketing budget, how much should be dedicated to fast and how much to slow marketing. They should plan all of this, in advance, if they want to achieve the best effectiveness.

Content marketers should know their velocity, too. Content marketing is marketing - I think I’ve repeated this quote at least a million times with clients and peers. And content marketers should be marketers and understand marketing dynamics before focusing on their content challenges. Same with content strategists, who must understand marketing strategy first, because how could you possibly implement a brand awareness program if you don’t get brand dynamics first?

The goal of this article is to summarise decades of research into how buyers buy and how brands compete and grow and the (sometime) surprising conclusions and principles that these researches have led. The audience is marketers and branding experts, of course. And content marketers or strategists who think at content marketing as a discipline sitting on top of marketing innovation, but not realising (yet) that their content wisdom is just pointless if they don’t understand how to manage a brand or how to use content to enable and integrate brand building with performance marketing.

Each paragraph will cover one marketing law or study. Each paragraph will include actionable insights; because I'm the first who, after digesting marketing manuals ask himself: “Well, this is great, but then what?”

So, let’s start.

Summary:

One. Balance the two marketing velocities. Two. Harness the power of emotions. Three. Expand your customer base. Four. Budget for Growth. Five. Investing in Share of Voice will increase Market Share. Six. Content and creative advert should go hand in hand.

One. Balance the two marketing velocities: fast (activation) with slow (brand building)

I recently wrote about the two "natures of marketing", long-term brand awareness and short-term sales activation and the role of content within the overall marketing strategy. The latest seminal research of Les Binet and Peter Field, Effectiveness in Context, inspects thousand campaigns of the IPA Databank, with a focus on marketing effectiveness, and well clarifies the dual model.

How do Field and Binet define (slow) brand-building and (fast) activation marketing disciplines? 

• Brand-building is when you create memories that influence behaviour over the long term. It’s big broad reach campaigns. It’s TV ads that people remember for years.
• Activation is marketing that evokes an immediate behavioural response, without necessarily affecting long-term memories or behaviour. It’s leadgen, as we B2B marketers are used to call it. It’s paid search. It’s limited time promotion (think about Amazon’s daily deals).

ALL marketing activities have both brand and activation effects. But the mix varies, depending on targeting, copy, medium etc. Evidence suggests there is a trade-off between brand and activation effects. Activity that is good at one tends to be poor at the other. It is not too hard to divide marketing activities into those that work primarily by brand effects and those that primarily work by activation. Note the word “primarily”.

Activation is marketing that evokes an immediate behavioural response, without necessarily affecting long-term memories or behaviour. Brand-building is when you create memories that influence behaviour over the long term.

The last few years have seen short-term marketing techniques as enterprises' first priority, in many domains, including B2B and Financial Services. Enterprises have invested most of the marketing money in short-term, fast-return campaigns driven mostly by online paid media programs and related content, in the hope to lift sales for the next few quarters. Well, I had this priority too when I led marketing for a division of a large enterprise in the field of Energy. Brand was a very minor focus. And my bonus was mostly based on fast and short-term performances. Short-term activation campaigns and sales programs were successful in most of the cases. At least, this is what we all thought. I didn't really know my marketing velocity, at that time.

And I keep seeing this as a practice in most of the enterprises I consult. Bonuses are based on quarterly figures and this goes back to the need of short-term ROI.

Always according to Binet and Field, "short-termism" is, in many ways, the reason of marketing effectiveness decline over the last years. What exactly happened? As I have mentioned, marketers are increasingly short-term in their focus. They spend money on fast/immediate marketing programs rather than on slow and longer-term brand building campaigns. They opt for bottom-of-the-funnel tactics because in a three months period that will pay better in the majority of the cases. 

But in one of the most important sections of their research, Field and Binet demonstrate that over the longer term this short-termism will rapidly deteriorate the overall impact of marketing. Too much time spent picking the low-hanging fruit means less time watering the tree. Eventually the tree stops growing.

As a consequence of the short-termism, content creation has focused mainly on bottom-of-the-funnel and product or service led content using a very rational approach, to support fast-return paid media and sales activation programs. In most of the cases a solid and documented content strategy was even not requested and not in place. You don’t need a content strategy for executing short-term marketing campaigns. Today, after years of shortermism, things are finally changing.

What’s contributing to the rising importance of brand building is digital technology, according to Binet. “The digital revolution is tending to leading to increased activation efficiency and so a higher budget proportion should go to brand. It seems paradoxical, but what’s happening in the digital world means you need to build that brand even more,” he said. 

“Online brands need a higher percentage of their spend going to brand building because they already have direct channels to conversion. Digital realisation is leading to increased distribution efficiency, so more emphasis needs to be on brand.”

Here is the strategic insight, for marketers and content marketers: adopt an integrated model, a model of marketing running at two velocities. Brand building and sales activation are not choices or alternatives – they are mutually interdependent and both are essential to long-term success. Sales activation marketing is about growing physical availability, and is best served by tight targeting and relevant messages. In contrast, brand building is about increasing a consumer’s mental availability for your brand, and is driven by broad reach, stories, emotions and associations in B2C; by stories, educational and informational content in B2B.

The long-running assumption that B2B marketing appeals to its audience only on a rational level is wrong. B2B marketers are consistently under-investing in building brands. They should instead prepare people to buy with brand building, and then trigger them with activation.

Two. Harness the power of emotions.

And so marketing has to go with two velocities and marketers, whenever they design their brand strategy, must understand their velocity too. They should understand how to balance fast-return (and short-term) marketing techniques with slow-return (and long term) brand building.

Advertising works largely by refreshing, and occasionally building, memory structures (and less by convincing rational minds or winning emotional hearts). Marketers need to research these memory structures and ensure that their advertising refreshes these structures by consistently using the brand's distinctive assets.

But then you need to have something else in the ads: content. And that’s here we have tension between messages and emotions. If you are trying to go with activation, it makes more sense to go quite rational. You are talking to people who are in active shopping mode or are ready to perform an action. You want to enable them to complete their shopping mission. You shouldn’t give the whole story about your brand’s prominence and purpose to people who are buying or downloading an ebook. You will just give info about price, or the ebook, and which buttons they have to click on.

Very different situation with brand building. Adverts have more in common with conditioning Pavlovian training of animals than information, persuasion and communication. Every time you advertise is like you are ringing a bell and making the dog salivate (here, the potential customer recalling your brand and its assets). It's not really telling people about your brand; it’s creating that association so when you will attract them with a sales activation hook, the dog will salivate (= the client will recall your brand). 

Emotions will lead, messages will follow.

Emotion in B2B marketing won’t necessarily take the same form as emotion in B2C. Mark Ritson calls it emotion with a small ‘e’. It doesn’t have to be heart-wrenchingly dramatic. It might be most effective when it’s subtle and understated – but it has to be there. Hope, aspiration, confidence and fear of failure are all in play in the B2B buying mindset. As B2B marketers we need to invest in understanding the relevant emotions for our buyers and their relationship to our brand.

Binet said:

“Brand communications create enduring memory structures that increase the base level of demand and reduce price sensitivity. Sales activation triggers these memories and converts them efficiently into immediate sales.”

Enduring memory structures. Have a look at Christmas advertising in the UK. This year it has set the bar for what more brands should be doing year-round: eight out of ten Christmas ads use a story, as opposed to just four in ten that use stories in the rest of the year.

Daren Poole, Global Head of Creative at Kantar, explains there are no secrets to effective Christmas advertising, just best practice. Many brands seem to adopt these best practice creating distinctiveness by investing in “a story with epic values that sets out to capture the hearts and minds of people at home”. The same Poole observes that ads that use stories do far better at generating enjoyment and emotional affinity than those that don’t: “enjoyment acts as a trigger to the brain to pay attention and emotional affinity positions the brand positively for future occasions when the consumer is making a brand choice.”

Wait. Isn’t that the definition of storytelling? 

Yeah, it’s exactly that. Which is what content marketers understand so well (a very good friend even wrote an entire book on storytelling and content marketing techniques). 

And so, same principles can be applied to content and adverts. It’s as simple at that. 

Three. Expand your customer base.

There is a fundamental law of brand size: big brands have significantly larger customer bases. This seems obvious – more sales means more customers – yet it doesn’t have to be this way. In fact, a brand's sales volume depends on two things: 1) how many buyers it has and 2) how often they buy the brand. One multiplied by the other equals sales. As a consequence a brand could theoretically be large because it is bought very often by its buyers, without having too many buyers. But this happens only in theory, never in practice, as explained by Byron Sharp in his book “How brands grow” and the Ehrenberg Institute. 

In the real world, two brands of about equal market share have around equal market penetration, and so they must also get bought by their buyers at a similar average rate. Put another way: loyalty doesn't vary much. Modern marketing ideology says retention is cheaper than acquisition. But there is no scientific proof. Said with Andrew Ehrenberg’s own worlds:

Growth isn't about squeezing more money out of the most loyal customers but trying to grab new ones. 

Studies of several marketing authors confirm the law: Andrew Ehrenberg, Byron Sharp, Les Binet and Peter Field. Quoting Andrew Ehrenberg:

Your customers are mostly other brands’ customers who occasionally buy you. 

Here is the strategic insight: it’s often naively hoped that investing in current customers might bring greater return than seeking to expand the customer base. Actually, it works exactly the other way.

Focus on expanding your customer base, not on existing customers. Focus on acquisition, not retention. Retention strategies always under perform.

This is valid for B2B too. Performance marketing is important, acknowledges Peter Field, but if it’s the only thing you do then it will eventually lead to failure. Your targeted performance marketing has to be supported by more mass-reach brand activity to keep driving results.

One more point. Brands with high market penetration (typically large brands) tend to have better loyalty rates, as measured by things like share of category requirement and customer retention. This is what Sharp calls the “Double Jeopardy” law. Over the last 60 years, the Double Jeopardy law has been observed in a huge range of products and services around the world, including B2C and B2B categories. As a content marketer, be aware about this laws. Whenever you should prioritise, remember to focus on expanding your customer base. 

Four. Budget for Growth.

Field and Binet advise a 60/40 split for optimum impact. It has to be calculated across many different categories and therefore there may be variance in this calculation from brand to brand; but in general terms you want 60% of your budget invested in long-term brand building activities and 40% on more immediate fast-return activation. Known as the 60:40 rule, it's based on dividing activities into these two broad categories, with the understanding that the boundaries are blurred and that all activity does both jobs to some extent. 

What might surprise marketers is this optimal ratio has moved even higher towards brand building in the digital age. Binet noted 2004-2016 figures pitched the optimum balance to be 60 per cent brand and 40 per cent activation, up from 55/45 per cent in 1998-2010. These figures are published by the IPA Databank. Their latest research now shows that a very similar rule applies in B2B. The proportions are slightly different on average – much closer to 45/55. However, the principle is the same.

Five. Investing in Share of Voice will increase Market Share

Another common rule that applies to B2C and B2B marketing is about Share of Voice (SOV). Specifically where a brand SOV is higher than then Share of Market (SOM) the brand tends to grow, and the opposite is valid. 

As Les Binet & LinkedIn’s B2B Institute explain, the more people you are reaching, and the more people who are talking about you, the greater your opportunity to maintain or grow your market share.

Rephrasing: brands that set their SOV above their SOM tend to grow (all other factors being equal), and those that set SOV below SOM tend to shrink. The rate at which a brand grows or shrinks tends to be proportional to its extra share of voice (ESOV), defined as the difference between SOV and SOM. 

For consumer brands, 10% extra share of voice causes market share to rise by 0.6 % points per annum. For B2B, the corresponding figure is 0.7%. In other words, B2B brands appear to respond to share of voice in almost exactly the same way as B2C brands do. Indeed, we find more variation between B2C categories than we do between B2C and B2B.

Here is the strategic insight, for marketers and content marketers: the ESOV rule offers businesses that invest in advertising a useful rule for setting budgets; set SOV relative to market share targets using the ESOV equation; then estimate what investment is required to achieve that share of voice. Finally, balance brand and activation SOV based on point Four ("Budget for Growth").

Six. Content and creative advert should go hand in hand

So what is the relationship between content and all principles we have mentioned so far? I think you have realised reading the post: content marketing is marketing. If you understand how to balance the two marketing velocities (fast/short term, slow/long term) you can use content to support your marketing strategies: rational content for short term marketing techniques; stories, creative and inspirational content, sometime educational and trust-building (B2B) content for long term brand building.

“Content isn't a marketing tactic – it's an integral part of all marketing tactics,” Trevor Klein, content manager at SEO software company Moz, said when asked for his thoughts on content contribution to brand growth. 

“Without content, you don't have emails, blog posts, pitch decks, or ads for PPC,” Klein continued. “Without content, you don't have anything to optimise for search engines, nor do you even have a site in the first place. We need to stop thinking of it as a separable area for investment. You don't trade your email spend for content spend – you simply invest in content in order to make your email spend worthwhile.” 

Content cannot substitute emotional advertising but has to complement it. The wise combination of content and advert is what will lead to marketing effectiveness.