Opinion

The secret ratio behind the most effective ad campaigns

The rapid-fire nature of retail brings a level of excitement and numerous challenges other businesses miss out on. If you love retail, as I do, the adrenaline rush that comes from the highs, and successfully dealing with/mitigating the lows, really floats your boat.

But often the short-term nature and the ability to track sales on an hourly, daily, weekly basis can generate panic, and that can affect marketing decisions.

In the past, we’ve seen well-researched brand building strategies deferred, aborted, or significantly scaled back when there is a hint that the till may have stopped ringing as loud as it should.

And when sales start looking soft, the management brain trust can start to get desperate. The increasing impact of short-termism in both results reporting and management remuneration structures also have a major role in the building of this desperation, but we’ll leave that for another day.

Desperation all too often translates into marketing tactics that can be counter to brand-building efforts. Deep discounting, bundle deals, bonus loyalty points and the worst one, advertising that shouts at the customer, can have a lasting negative impact on your brand.

If any or all of the above are enacted infrequently, quickly righting the ship and getting back to Plan A will mean little or no harm is done. But with the widely reported retail malaise engulfing Australia at present, these things can quickly take on a life of their own. When that becomes the new modus operandi or ‘business as usual’, it can be the beginning of the end for that retail brand.

I’m the first to acknowledge that holding your nerve in this climate is hard. And yes, it might even cost you your next bonus. But if Plan A is well thought through, based on sound research that confirms your offer is fulfilling a market need and provides a true exchange of value – i.e. the consumer is prepared to pay the price you ask because it’s fair – then hold your nerve and reap the rewards over time.

Ultimately, the plan needs a balance of Brand Building and Business Getting (BB&BG) – it is retail we are talking about, after all. To put it another way, Sales Overnight, Brand Over time (SOBO) as is the mantra at KFC.

In the advertising world, two blokes have made it their life’s work to champion this balance. Peter Field and Les Binet are the authors of a report titled The Long and Short of It which details the importance of investing in both short-term sales-focused marketing and longer-term brand-building activity. They reckon the perfect split is 60:40 – 60 per cent brand, 40 per cent short term activation.

Following Binet and Field’s lead is the recently released Australian Advertising Effectiveness Rules report which analyses two years’ worth of Australia’s most effective advertising campaigns. The report suggests the 60:40 rule stands up in the Australian market and goes one step further to warn that brands only pumping marketing budgets into a series of short campaigns are damaging brand growth.

If you are looking for clues on how it works best in the real world, have a gander at respected retailers such as Bunnings and ALDI. Their everyday low-price business models make it easier to hold the course – they have done their homework on ensuring a good value exchange. These brands stick to the plan on a brand level. Guaranteed you’ve seen their long-running campaigns that drive home this message. Meanwhile, they continue to manoeuver on a weekly basis.

Elsewhere retailers such as Coles and Woolies pick specific categories as proxy brand battlegrounds whether that’s fresh fruit/veggies or meat.

So while you might be addicted to the adrenaline rush of retail like me, make sure you’re able to differentiate that from panic because panic-fueled marketing isn’t going to help you build a brand for the long term. It will only accelerate your race to the bottom, and that’s not one you want to win.

Craig Flanders is the CEO of full-service agency Spinach.