With marketers under extreme pressure to meet revenue goals, top-of-funnel marketing efforts have taken a back seat. Yet the need to build brand awareness has never been greater for brands, as consumers have greater access and choice and less exposure to logos on shelves and window displays. Nielsen’s latest report makes the case for adopting a balanced marketing strategy that combines the right message and the right mix of channels to create long-term growth.
The sales impact of low-funnel marketing strategies materializes faster, but Nielsen’s analysis suggests that branding efforts are leveraged to drive sales. By measuring the effectiveness of a financial services company’s marketing efforts to generate sales in approximately 20 markets, Nielsen found that the correlation between upper funnel brand metrics and marketing effectiveness was significantly strong – 0 .73. So, building brand equity not only benefits direct sales, but also improves the effectiveness of your activation efforts.
Marketing accounts for 10-35% of a brand’s equity, according to Nielsen. Since equity also comes from visibility, taking non-marketing sources of equity, such as regular use of a product and seeing a product on the shelf, for granted is a mistake. For one thing, fewer shoppers are driving to stores, which eliminates the risk of them seeing logos. Additionally, consumers have access to an endless selection of brands online, making it difficult for unique brands to stand out. Finally, supply disruptions related to COVID-19 have affected product availability, forcing consumers to try alternatives.
This last point is highlighted by the differences in brand retention and trial rates between traditional and digital channels. For example, data from Nielsen Commspoint revealed that in the US consumer packaged goods market, shoppers report that 4.3% of their physical purchases involve a brand they have never purchased before. For online purchases, this figure increases to 12.2%. This metric increases from 83% of physical GIC purchases to 72% of online GIC purchases.
Nielsen cautions against assuming you can directly apply benchmarks around which channel is best for building your brand equity. Channel effectiveness across campaigns can be highly diverse, as Nielsen found when measuring the impact of messaging strategy marketing for an electronics brand and an automotive brand in the short and long term. term. Upper funnel messages about the automotive brand were 5% less effective than overall media at driving short-term sales and 18% more effective than overall media at driving long-term sales. To deploy the most effective messaging and measure your share of voice in each message strategy, brands can reduce their competitive ad data through upper and lower funnel builds.
Looking at the same comparison from the perspective of specific channels, Nielsen found that along with upper funnel messaging, video and offline media are very effective at driving both short-term and long-term sales. With low-funnel messages, non-video and online media are more effective at generating short-term sales than they are at generating long-term sales.
If single-purpose optimization were a viable option, Nielsen notes, there would be no cases of brands like Gap and TripAdvisor admitting to missteps by abandoning brand development in the name of one. increased focus on activation.
To optimize both short-term and long-term goals, brands should consider optimizing their marketing mix for total sales if they have already measured short-term and long-term ROI. If a brand doesn’t have the full impact on sales, marketers can perform sequential optimization and then weigh those boost results together to create a hybrid plan and set goals for what that plan will accomplish. .
If the Institute of Practitioners in Advertising’s 2013 study is any indication, long-term efforts are real long-term business drivers. The company suggests that the optimal balance between long-term and short-term efforts is 60-40.
The bottom line: Marketers need to determine what the minimum short-term business requirements are and whether their business has the flexibility to expect longer-term results.