In advertising, what comes first: the MEDIA choice or the CREATIVE idea?

Of course the consumer always comes first. However, as you begin the advertising process, Brand Leaders need to figure out whether the creative determines the media choice you make or the media choice helps frame the creative. When I started in marketing, way back in the mid 90s, life was a little simpler because the media and the creative were both under one agency roof. The meetings were simple: you’d see your various TV script options, give some feedback and then the room would go silent and the account person would say “now let’s look at the media plan” and the media person would take you through a 15 page presentation on where else the idea of your TV script could go. You would see some magazine, OOH and even some sampling idea. Back then, there was no internet advertising yet.

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Then one day, our media folks from our agency were spun off, had a new name, moved offices and had a new President. It now just meant we had two presentations and the Brand Leader now had to make sense of things and try to piece it together. About a year into that new relationship, I was sitting there confused and asked the question: “So what comes first, the media choice or the creative idea?” The room went silent for about 5 minutes. Then of course both sides talked over each other, both saying it was them that came first.  

All Marketing Execution has to do something to the brand–getting the consumer to think, act or feel differently about your brand. Media is an investment against your strategy and creative is an expression of your strategy. Both media and creative are only useful if they connect with consumers. Great advertising must connect through very insightful creative that expresses the brand’s positioning and told in a way that matters to those who care the most. Great advertising must be placed within the consumers’ life where it will capture their attention and motivate them in the expressed desired way to meet the strategy. So really, the consumer comes first and strategy comes second. Media and creative need to work to jointly capture the consumer and deliver the strategy.  

With separate agencies, the problem now rests with Brand Leaders to figure it out. While one could theoretically argue that if the Creative Idea of the advertising is so big, it should work in every medium. That’s just not always true in reality. Some ideas just work better in certain mediums. Yet the media people could also theoretically argue that if you go for the most efficient and effective media option, the media will do the work for you. That’s also not true. The best overall advertising should work focus on what has the most impact and what has the highest efficiency.  

Here’s a solution for Brand Leaders 

The three questions you always need to keep in your head at all times: 1) where is your consumer 2) where is your brand and 3) how does the creative idea work? 

1.  Where is your consumer?

You should really understand who your consumer is, and who they are not. You need to make sure you understand the insights about them, because it’s those insights within your creative that allow you to connect with them. They’ll say “they get me”. You should always be mapping out a day in the life of your consumer. Get in their shoes and say “what does my consumer’s day look like and how will my message fit or interrupt their life?” Take a “be where they are approach” to your media. 

2.  Where is the Brand?

First thing you have to do is consider where your brand is on the Brand Love Curve where brands go from Indifferent to Like It to Love It and all the way to Beloved. At INDIFFERENT, it’s about announcement style such as mass media, LIKE IT becomes about separating yourself from the competition while LOVE IT and BELOVED you’ll start to see the growing importance of event marketing to core users or social media as a badge of honor to share with others.

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3.  How does the Creative work? (The ABC’S)

The best advertising should draw ATTENTION, be about the BRAND, COMMUNICATE the main message and STICK in the consumers head long beyond the ad.

  • Attention: You have to get noticed in a crowded world of advertising. Consumers see 7,000 brand messages per day, and will likely only engage in a few. If your brand doesn’t draw attention naturally, then you’ll have to force it into the limelight.
  • Branding: Ads that tell the story of the relationship between the consumer and the brand will link best. Even more powerful are ads that are from the consumers view of the brand. It’s not how much branding there is, but how close the brand fits to the climax of the ad.
  • Communication: Tapping into the truths of the consumer and the brand, helps you to tell the brand’s life story. Keep your story easy to understand. Communication is not just about what you say, but how you say it—because that says just as much.
  • Stickiness: Sticky ads help to build a consistent brand/consumer experience over time. In the end, brands are really about “consistency” of the promise you want to own. Brands have exist in the minds of the consumer. 
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In the reality of advertising, not every ad execution will be able to do all four of the ABC’S.  When I’m in the creative room, I try to think about which of the two ABC’S are the most critical to my strategy. If it is a new product, I want all four, but I have to have: Attention and Communication. If the brand is in a competitive battle I have to have Brand and Communication.  If the brand is a leader and beloved, I need to make sure the advertising is about the Brand and that it Sticks.   

What I recommend you do:

In a sense, you have to work the creative and media together. But that’s impossible. So what I do is hold off on making any media decisions until you see the creative idea and how it is expressed in a few media options. With all the potential media options now available, I ask for 3 executions for each creative option:

        1. Video version
        2. Billboard 
        3. Long Copy Print

Sounds simple, but here’s the logic. With those 3, I can now imagine how the advertising might work across all possible media options. 

  • The “Video” allows me to imagine how the creative would work for traditional 30-second TV ad, a 60-second movie theatre ad, 2 or 3 minute viral video for sharing or even a video you could put on a website.
  • The “Billboard” allows me to imagine how it would work with traditional media options such as out-of-home billboard, bus shelter, in-store poster, packaging copy and the back cover of a magazine.  Or if we want to look at digital, it could be a digital billboard, Facebook photo, website cover.
  • The “Long Print” allows me to imagine what how it might work with a print ad, side panel of packaging, brochures, public relations story-line,  social media feed or even a blog on your website.  

With 3 simple asks against each creative idea, it covers off most of the traditional media options, even covering the digital media. So now as the Brand Leader goes to their Media Agency, they will know how the creative idea would work against any of their recommendations. 

Obviously, we always recommend that you focus. So we’ll likely recommend a lead traditional media and a lead digital and lead social option. You need to make the most out of your limited resources of dollars, time, people and partnerships. However, if we want a creative idea to last 5 years, seeing it work across this many media options gives me a comfort that should I need that option, I know the creative idea will work.

The media math from a client’s view

While the media agency owns the media math that blows your mind, here is some simple client side media math. As clients, we have to make the most of our budgets. 

  • Your production budget should be around 5-10% of your overall advertising plan. If you have small budgets, that may creep up to 20%, but that’s it. Every time you do a new piece of creative, the production dollars go up and the media dollars go down. I’d recommend you focus on one main traditional media and have only one secondary option. This keeps your spend focused. 
  • When it comes to social media, keep in mind there is no free media options. Instead of financial capital, you are now exhausting people capital. Just like the traditional options, I would recommend one lead social media and one secondary focus. Do not try to be all things to all people.  
  • The other reason to focus is to ensure you do great executions and not just “ok”.  Pick the media that maximizes the power of the creative. Don’t exhaust the team by spreading them against too many activities.   
  • Allow 80 to 90% of your media spend be on the highly effective highly efficient media plan. That means 10-20% of your media spend can now go against high IMPACT creative ideas that you know will break through.  

Work with both the creative and media at the same time, figuring out what gives the highest return on your investment

 

To see a training presentation on getting Better Marketing Execution: 

Beloved Brands: Who are we?

At Beloved Brands, we promise that we will make your brand stronger and your brand leaders smarter. We can help you come up with your brand’s Brand Positioning, Big Idea and Brand Concept. We also can help create Brand Plans that everyone in your organization can follow and helps to focus your Marketing Execution. We provide a new way to look at Brand Management, that uses a provocative approach to align your brand to the sound fundamentals of brand management.

We will make your team of Brand Leaders smarter so they can produce exceptional work that drives stronger brand results. We offer brand training on every subject in marketing, related to strategic thinking, analytics, brand planning, positioning, creative briefs, customer marketing and marketing execution.

To contact us, email us at graham@beloved-brands.com or call us at 416-885-3911. You can also find us on Twitter @belovedbrands.

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Making brand leaders better at running the brand financials

Great Brand Leaders, not only drive demand, they drive profitable demand.

Slide1A lot of marketers enter in marketing as a career because they weren’t into the numbers part of business. However, the reality is that to run a brand you have to be good at running the P&L. The only reason that brands exist is that you can create a bond, power and profit, beyond what the product itself could achieve. At Beloved Brands, we believe that passion matters because the more loved a brand is by consumers the more powerful and profitable that brand can be. So in everything you do as a brand leader, even as you are launching new products, creating new advertising or writing a great brand plan, you have to have profit front and center in everything you do. Yet, there are far too many Brand Leaders who can’t run the P&L. These Brand Leaders hit the mid-point of their career and then we realize that they aren’t very good with numbers and all of a sudden, a fast track career for the super star Brand Manager completely stalls. As you’re looking up to the director level jobs, challenge yourself to get better with finance.

Looking at the P&L

Here’s my Finance 101 that can help  simplify your role with the P&L. This is meant for the Brand Manager level who is aspiring to continuing to move up.  But regardless of level, if you secretly are weak in the P&L area, this might help you.  Slide1

While it’s important to learn every line of the P&L, where Brand Leaders can have the biggest impact is on the Net Sales, the Gross Margin and the Contribution Margin.  The Net Sales line is simply Gross Sales minus the Trade Spend. Some income statements have brought the trade spend up to the sales line, while others have left it down in the cost line. Check with your company’s or country’s way of doing it.  In many industries, the trade terms are dictated by the channels.  While I would want to say the more Beloved Brands have a power over the channels, many times they still aren’t able to turn that power into lowering the trade spend.  If the trade spend is out of your control, you should be working with sales to ensure you are maximizing the value in programs that you are getting for the trade spend.  

Net Sales is the Unit Sales times Net Price. For unit sales, you’ll have to either drive the market share or enter new markets. That’s where the marketing programs you leverage drive faster growth relative to the spend. And for price, you can increase price or get consumers to trade up to a premium price within your portfolio.  The overall brand image you drive will usually be one of the biggest impacts on price. The more love you create for the brand, the more inelastic the price. 

Gross Margin is Net Sales minus Cost of Goods.  Just like above this can be impacted by how high of a price premium you can drive for the brand, or whether you can lower your Cost of Goods without impacting the quality of the product.  As a Brand Manager, this becomes your primary focus for “profit” as you feel the below the line costs are out of you control, so you don’t pay much attention to them.   However, as you get up to the Director or VP level, you get involved in discussions about marketing spend, R&D and the goals for the bottom line contribution margin levels.  This is where your strength or weakness in running the P&L begins to really show up.  

The ways brand leaders can Drive the P&L

Looking at the above P&L lines, in a slightly different way you really have 8 different areas that you can impact the Profit:

    • With Price, you can increase/decrease the price or you can get consumers to trade up to a premium line or down to a value line.   
    • When looking at Costs, you’re either driving the product costs or the marketing costs. You’re trying to minimize the costs without impacting the brand or the impact on the brand.
    • Driving the Market Share is a focus on either stealing other users or getting your current users to use more. 
    • The Market Size is all about entering new categories or finding new uses for your current brand.  

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Using Price as a weapon to drive brand value.  It can be a price change, up or down, or it could be trying to get consumers to trade up or down.

  • Price Increase: You can do a price increase if the market or brand allows you. It likely has to be based on passing along cost increases. Factors that help are whether you are a healthy brand or it’s a healthy market as well as the power of your brand vs competition and channel.
  • Price Decrease: Used when fighting off competitor, if you need to react to a sluggish economy or channel pressure. Another reason to decrease price is if you have a competitive advantage around cost, whether that’s manufacturing, materials or distribution.

There are watch outs for price changes. It’s difficult to execute price changes especially if it has to go through retailers. You need to understand power relationships–how powerful are the retailers. Many times, price changes are scrutinized so badly by retailers that you must have proof of why you are doing it. Also, it’s quite likely your Competitors will (over) react. So your assumptions you used to go with the price increase will change right after. And finally, it’s not easy to change back.

  • Trading Up: If you have In a range of products, sometimes it can be beneficial to get consumers to trade up. Can you carve out a meaningful difference to create a second tier that goes beyond your current brand? Does your brand image/ratings allow it?
  • Trading Down: Risky, but you see unserved market, with minimal damage to image/reputation of the brand. In a tough economy, it might be better to create a value set of products rather than lower the price on your main products.

When looking at Price Increases, here’s a formula to help get you started on your analysis for gaining approval.  

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Beloved Brands seem more capable at driving profits through pricing, but they also are careful to ensure the premium does not become excessive to create backlash. There are a few watch outs around trying to trade up or down: Premium skus, can feel orphaned at retail world—on the shelf or missing ads or displays. Managing multiple price levels can be difficult—what to support, price differences etc. For all the effort you go to, make sure your margins stay consistently strong through the trading up or down. Be careful that you don’t lose focus on your core business. Can’t be all things to everyone. The final concern is what does it do your Brand’s image, especially risky when trading downward.

Managing cost as a weapon to enhance the Brand’s Value. It can be either your cost of goods or the potential selling costs.

  • Cost of Goods Decreases: You are able to use the power of your brand to drive power over your suppliers, you find cheaper potential raw materials, process improvement or find off-shore manufacturing.
  • Cost of Goods Increases: Make sure that you manage the COGs as they increase. Watch out for suppliers trying to pass along costs. But realize that with new technology, investing in brand’s improved image, going after premium markets, offering new benefit or a format change, that cost of good increases could be a reality.

The watch outs with managing costs: with cuts, make sure the product change is not significantly noticeable. You should understand any potential impact in the eyes of your consumer on your brand’s performance and image. Can the P&L cover these costs, either increased sales or efficiency elsewhere. Managing your margin % is crucial to the long-term success of your brand.

  • Selling Cost Decrease: To counter changes in the P&L (price, volume or cost), it’s very tempting to look to short-term P&L management or look at changes in go-to-market model. Where a brand stands on the product life cycle or how loved the brand is can really impact the selling costs. Even though we think that Beloved Brands have endless spending, they actually likely have a lower investment to sales ratio.
  • Selling Cost Increase: When you’re in Investment mode, defensive position trying to hold share against an aggressive competitor or when you see a proven payback in higher sales–with corresponding margins.

Here’s a simple margin calculation to get you going:Slide1

Always be in an ROI mindset: Manage your marketing costs as though every DOLLAR has to efficiently drive sales. Realize that short-term cuts can carry longer term impact. Competitive reaction can influence the impact of investment stance–like a price change, your competitor might over-react to your increases in spending.

Externally, the Share and volume game are traditional tools for brand. Either stealing other users or get current users to use more.

  • Offensive Share Gains: Use it when you have a significant Competitive Advantage or you see untapped needs in the market. Or opportunistic, use first mover advantage on new technology.
  • Defensive Share Stance: Hold the fort until you can catch up on technology, maintain profitability, loyal base of followers needs protecting.

Be careful when trying to gain share. A Beloved Brand has a drawing power where it does gain share without having to use attack modes. Attacking competitors can be difficult. It could just become a spend escalation with both brands just going at it. After a share war that’s not based on a substantive reasoning (eg. technology change), there might end up with no winners, just losers. Many times, the channel will try to play one competitor against another for their own gain. Watch out what consumers you target in a competitive battle: some may just come in because of the lower price and go back to their usual brand.

  • Get Current Users to Use More: When there is an opportunity to turn loyal users into creating a potential routine. Changing behaviours is more difficult than enticing trial. It’s a good strategy to use, when your there’s real benefit to your consumer using more. It’s hard to just get them to use more without a real reason.

There has to be a real benefit connected to using more or it might look hollow/shallow. Driving routines is a challenge. Even with “life saving” medicines, the biggest issue is compliance. Find something in their current life to help either ground it or latch onto. When I worked on Listerine, people only used mouthwash 20-30 times a year compared to 700+ brushing occasions. So we focused on connecting rinsing with Listerine to the twice daily brushing routine.

Increase the Size of the Market by Finding New Users or Creating New Uses.

  • Find New Users: When there is an untapped or under-served need. There could be a significant changing demographic that impacts your base. Or you are able to translate/transfer your reputation to a new user group. There should be something within your product/brand that helps fuel the brand post trial. Trial without repeat, means you’ll get the spike but then bust. Substantial investment required. Don’t let it distract from protecting the base loyal users.
  • Create New Uses: Format Line Extensions that take your experience or name elsewhere. Able to leverage same benefit in convenient “on the go” offering. Make sure current brand is in order before you divert attention, funding and focus on expansion area. Investment needed, could divert from spend on base business. Be careful because the legendary stories (Arm and Hammer) don’t come along as much as we hope.

As you look to either grow by share or new categories the two crucial calculations for you are Compound Annual Growth Rate (CAGR) and Return on Investment (ROI) 

For CAGR, here is a calculation tool:

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And for Return on Investment (ROI):

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Show Your Work:  Just like in grade school where you get extra points for showing your work, the same thing goes when taking senior leaders through your assumptions.  

There is only one reason we have brands: to make more money than if we just had products.

To view a copy of How to drive Profits into your Brand, click below:

We offer brand coaching, where we promise to make your brand better by listening to the issues, providing advice that challenges you, and coaching you along a strategic pathway to reaching your brand’s full potential. For our brand leader training, we promise to make your team of brand leaders better, by teaching sound marketing fundamentals and challenging to push for greatness so that they can unleash their full potential. Feel free to add me on Linked In, or follow me on Twitter at @belovedbrands If you need to contact me, email me at graham@beloved-brands.com or phone me at 416 885 3911

We make Brands better.

We make Brand Leaders better.™

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