We’ve written before (here and here) about ongoing debates and tensions in our industry—especially around short vs. long term. And about the difficulty of finding a healthy balance. This time out, we’ll dig into some of the underlying forces at play, including that mythical source from which all marketing activity flows—the budget. Let’s take a moment to pause and reflect.
- First, a refresher on the challenge. In recent years, the measurability and immediacy of down-funnel digital tactics has proven very alluring to marketers. And, more to the point, to those who set their goals and hold them accountable for meeting them.
- As a result, short-term targets have grown dominant. This is bad news for important marketing activities like brand building that require more time to bear fruit.
- Unfortunately, this trend is getting worse, not better. Despite a rising body of evidence supporting the necessity of long-term brand building.
- All of this is seriously worrying Martin Weigel, who fears that our industry is drifting dangerously off course, destroying value instead of creating it. He’s probably being a bit alarmist but he’s right to be concerned.
- So where does the budget come in? Many point to the rise in zero-based budgeting (ZBB) as a significant driver of short-term pressure on marketing. And, specifically, a major factor in Kraft Heinz’s recent woes.
- Mark Ritson argues that ZBB has its benefits, while traditional methods for defining the marketing budget amount to little more than guesswork.
- In the end, though, Ritson proposes a middle path. A shift from “or” to “and”. Something he calls a “two-speed brand plan”, which combines the accountability of ZBB with an allowance for long-term brand building. We think he could really be on to something—so much so that we’re going to link to his article twice in succession. (Seriously, give it a read.)
- If it’s not time to write your next budget just yet and you need to build a case for healthier short-term / long-term balance, we recommend digging into Andy Farr along with Binet and Fields.
Speaking of Binet and Fields, in Effectiveness in Context they lay out some detailed rules for determining the right brand/activation mix based on variables like industry, sales channels, and product pricing. It’s a paid download, but very useful. Try it next time you sit down to work on your budget and it’ll steer you towards a healthy balance.
To mark our 5th anniversary, we’re giving away free workshops in 5 cities this fall. If you live in one of these cities—or know someone who does and might be interested—you can learn more here.
(Not available for existing clients—sorry!)