Digital Horizons

Brand News: Avoiding Short-Termism in Modern Marketing Strategies

• James Walker & Brian Hastings

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Struggling to strike the perfect balance between brand-building and performance marketing? Uncover the nuanced challenges that modern marketers face as they navigate shrinking budgets and an increasing demand for immediate results. In this episode, we take a closer look at why many CMOs and marketing teams are drawn into a cycle of short-termism, often at the expense of long-term brand equity. By sharing insights from a compelling AdNews article, we highlight the critical yet often overlooked consequences of sidelining brand-building activities in favor of bottom-of-funnel lead capture campaigns. 

Join us as we explore the evidence showing that a heavy reliance on performance marketing can erode baseline sales, pushing brands into a “sea of sameness” and diminishing their unique value propositions. We offer a roadmap for marketing professionals to communicate better with finance decision-makers, ensuring both brand and demand generation find their rightful place in media plans. Whether you're a seasoned CMO or an aspiring marketing strategist, this episode equips you with actionable strategies to maintain a balanced approach—essential for sustainable growth even in the toughest economic climates.

The Digital Horizons Podcast is hosted by:

James Walker - Managing Director WHD
Brian Hastings - Managing Director Nous

Speaker 1:

brand news this week.

Speaker 2:

I'm ready back to brand news.

Speaker 2:

We've been really enjoying these, these segments I hope everyone else is um because it's helping us keep up to date as well with what's going on in our industries, which we probably should be doing anyway, being that we run our digital marketing agencies, but sometimes there's just so much happening throughout the week that it's good having this to force us to actually take action and learn a little bit more about what's happening in our industry. So today, an article in adnewscomau stating that and this is from a CMO who's been interviewed here some of the key challenges that continue to impact marketers are the need for instant results, resulting in a continual move to short-termism. Tightening marketing budgets that mean being brave and experimental is becoming riskier, and the subsequent lack of investment in brand building, resulting in a sea of sameness. So what we're seeing here is exactly what we've been talking about, where budgets have been shrinking. A lot of businesses are pulling back their advertising budgets and they're demanding more results, less budget, which means 100% of the budget is going into your bottom of funnel lead capture, demand capture campaigns.

Speaker 1:

Yeah, hard economic times lead to the finance teams of businesses and the CMOs looking for areas to cut costs. Yeah, and it's really difficult for CMOs and marketing people who are responsible for the budget to justify the brand component of their advertising spends.

Speaker 2:

Well, that's right. I mean, if you look into two campaigns side by side and you can say you've got 100,000 on each campaign, you'd never have a 50-50 split but say that was like for like and you're looking at, all right. Well, this one here has generated us X amount of inquiries that's led to X amount of reportable sales that we can see a clear correlation through. And the other campaign has had a whole bunch of impressions and likes and shares and comments. It had a couple of conversions. We know they've come through from it. But which one are you going to kill? Yeah, it's going to be, you're just going to go. All right, cool, we've got to cut the budget. That's going.

Speaker 1:

Yeah, right, and it would, I feel, for these CMO marketing people with these budgets, because it's only making their job harder. Two, three, four months down the track, when the benefit of the brand activity that they were running that's paused is no longer being experienced, then the screws start to turn on why the performance marketing isn't delivering as much because it's not being paired with the brand advertising. It's a slippery slope down to lower and lower performance.

Speaker 2:

Yeah, and I mean it's good that. No, it's not good that, but it's good we're reading it in these articles because it's something we're seeing all the time Like we've had strategy sessions with our clients planning for this financial year where there has been all right cool. This year we're going to invest this much more into brand, we're going to do all these kinds of things, and then we'll have a follow-up meeting and it'll all have shifted to no, actually, we're going to pull all that budget and it's all to go into a lead generation campaign, because our directive for this financial year is to generate as many leads as possible so we can sell as much as we possibly can, and so then all the brand campaigns are being cancelled, and this is a number of clients that we're going through this with. So what's the solution?

Speaker 1:

Yeah well, there's another comment here that says there is indisputable evidence that unbalanced brands struggle in the long term only focusing on performance. Global Kantar studies show that if brands consistently favor performance marketing, baseline sales will erode and this is leading to a decline in brand equity in Australia. So we know it, but it is still hard to communicate it. So what this article delves deeper into trying to explain is we need to start speaking the same language as the finance decision makers. In our business. The performance marketing does speak the same language as the finance decision makers in our business, the performance marketing does speak the same language.

Speaker 1:

It is seen as an investment. You put in X dollars and you get a return on ad spend of Y. Showing the value of brand and demand generation activity will be the only way to get it a place on your media schedule. But that's really difficult. The age-old challenge is showing the benefit of engaging creative, showing the benefit of long-term brand buy in media. But it can be done. You can do brand studies. You can have periods of campaign performance compared with and without brand campaign activity. But generally what's really difficult is you would have to risk turning it off to get that period of no brand activity and the long tail of your brand equity will slowly erode. So it will give a false negative.

Speaker 1:

It'll convince the finance people within your business that we turned it off and it had no impact and you'll be left saying no, but in five months it'll be too late. You'll see it then. So yeah, I think there needs to be a communication of the challenge that advertisers have with their finance team. To say it's really difficult without spending even more money on brand tracking studies, but sharing the knowledge that is within the industry what an effective split of brands to performance looks like for other businesses, based off tracked data and sharing those challenges of reporting with your finance team. To say, look, we know if we turn this off it's going to erode the performance capability. We know the market and from studies it shows a split of this is appropriate. How do we reduce the overall budget enough to meet your finance goals, but not enough to ruin our brand presence in market? Trying to get the communication between marketing and finance to a point where they see your challenge and they're not just making calls on what they cut themselves.

Speaker 2:

Yeah, and I guess it's probably going to be a learning experience. I think they'll probably cut it and then realize, hey shit, sales are down, everything's been, it's had that flow on effect. And then it's probably going to be a learning experience. I think they'll probably cut it and then realize, hey shit, so it's down. Yeah, everything's been, it's had that flow in effect. And then it's where they're going to realize well, we look back six months we killed the campaign.

Speaker 2:

Maybe we need to start bringing that back and maybe it's going to start going through a learning process and they'll, they'll go through this and then they.

Speaker 1:

Yeah. What I've seen in my experience, though, is the spotlight then shifts to the digital performance team and goes well, why aren't we getting the sales we used to get? We made a call to cut this brand stuff, and you were delivering. I'm used to seeing these results do better. Let's change agencies, let's do this, let's do that.

Speaker 2:

That's a good point, and I mean it's also going to be affecting your sales team, because your sales team's performance is going to be declining as well because they haven't got that brand recognition in the market and again, that's going to be a lagging effect. But you've got your brand campaigns off for six months, as people that they're talking to are going to be less familiar with the brand, they're not going to have a harder time to sell, so it's all going to have that flow on effect. So, bill, it's definitely as we said and we've talked about this before and it's showing up in the news now that brands and businesses just need to be paying more attention to how much they're focusing on the brand side of things, as opposed to solely focusing on lead generation and brand and demand capture.

Speaker 1:

Absolutely agree. So next up on brand news, nielsen Report, australian podcast listenership grows 16%. This is a good one for marketers and advertisers. We know the engagement rates on audio advertising, and specifically podcast content, has been growing in Australia and globally. But what's important about this information is it's not just media spend growing, it's listenership there's 16% more audience listening to podcasts than there were before.

Speaker 2:

Yeah, the categories don't make it too interesting for us, though, being that business podcasts are not even listed in the big percentages when they break it down by people what they're actually listening to I mean true crime is a big one.

Speaker 2:

I've never listened to a true crime podcast before. I feel like if I was going to and this is just myself. If I'm listening to something, I'm typically wanting it to be productive time. If I'm driving or at the gym or whatever main areas I'm listening to is always business, always self-help. It's something that I'm going to be able to feel a bit productive to adding to whatever I'm doing at the time. I don't know how. About yourself? What do you?

Speaker 1:

Yeah, I listen to things like Stuff. You Should Know. I do like those more longer form story podcasts like Shit Town, some news-based podcasts, business news podcasts that are just short and snappy, which is why we like the idea of brand news. But my wife listens to sort of chick podcasts every day and spends most of her time in the car listening to these podcasts. The interesting point I've found in this article is that a lot of the growth was in Australia's over 60 audience. Yeah, so I think over 60s of the past were probably, you know, listening to radio and now, being 60 now isn't as old as you think.

Speaker 2:

They're listening to podcasts. You say that because you're getting closer to it, right?

Speaker 1:

Yeah, it's cool, right, you're almost 40, so Correct, but they said here in 2023, there were 757,000 over 60 podcast listeners. In 2024, that jumped to 1.125 million. So 49% of the increase was in over 60s listeners. Yeah, this is just showing me that it's a high value quality marketing route or option to provide our clients. We have run multiple campaigns, both ads only or integrations with podcasts. We do find the best results is when there is some form of integration, ie having the podcaster do a live read or talk about the product or trial the product, at the very least pre-recording an ad with their voice, because you get that trust from the podcaster themselves carried over.

Speaker 2:

I listened to one this morning and it was a really good podcast, but it started with an ad, so with three ads that were all completely just what you'd watch on YouTube style ads.

Speaker 2:

Like it was one completely irrelevant really. I mean probably right target audience, but nothing aligned with the podcast or what it's talking about. It'd be like listen to an insurance ad at the beginning of a podcast, so of course you've got it's so easy to skip, so I just I just blast right past it. But yeah, definitely as you said needs to be that alignment with the brand and having the podcast is a massive benefit.

Speaker 1:

Yeah, absolutely. I do the same as you in the car.

Speaker 2:

There's a 15 seconds forward button, but if you're listening and the podcaster is aligning and you're actually like the content that they create, then you're going to start well. Maybe there's going to be something of value that this guy is going to talk about, as opposed to cutting toward just a random ad in the middle of the podcast.

Speaker 1:

I still remember when one of the Queensland-based universities advertised their MBA program via the Stuff you Should Know cast. They actually got the American guys from Stuff you Should Know who. To me I'm like. These guys are celebrities and they're reading about the University of Queensland's.

Speaker 2:

MBA program. I listened, I still remember it.

Speaker 1:

So, yeah, I think it's quite powerful and if you are going to have ads, try to get them in the middle gap or before the end, rather than the first one up. Yeah, I skip those.

Speaker 2:

Well, that's it for Brand News today. Thanks for listening. We'll be back again soon. Thanks, guys.