Carolina Miodownik is a Global Digital Marketing Manager at JDE Peets. She is a digital marketing professional with over 10 years of experience across FMCG, consumer electronics, and the chemical industry. Prior to her position at JDE Peets, she held digital marketing managerial roles at Philips Lighting, Bose, and AkzoNobel.
KEY TAKEAWAYS
Jonathan Elliott: Why do you think focusing on brand building and long-term growth is the best strategy in an economic downturn?
Carolina Miodownik: All the research points in this direction: we have had at least five recessions in the last sixty years, which provided us with plenty of evidence on how to weather the storm.
The fact is, all recessions end, and when they do, consumers resume buying brands that are at top of their minds because they have stayed on their radar throughout. It's not just about keeping the lights on, but also having a good balance of brand building with promotional activation and resisting the urge to heavily discount.
And the research bears this out. Take a look at Macgraw-Hill [1] in the 80s, Milward Brown [2] in 2008, and Analytics Partners [3] in 2022, which all concluded that brands that advertised during a recession came on top and brands that went dark had significant decreases in brand image and revenue.
You can also look at the Kantar BrandZ research that shows how strong brands recovered faster during the 2008-2009 crisis and had more robust growth in the following years [4]; and also at what Professor Byron Sharp [5] has to say about the use of price discounts during a recession. Specifically, he recommends lowering growth targets while maintaining marketing support, avoiding price promotion, and treating news reports with some detachment.
JE: What is the evidence that brands that focus on the long term eventually become stronger?
CM: One of the most influential books on this topic in the last decade has been by Peter Field and Les Binet, "The Long And The Short Of It".
Their premise is simple: there needs to be a balance between long-term (brand-building) investments and short-term (sales activation) to ensure a brand's continued success. In other words, if you are only picking on the low-hanging fruit but don't water the tree, eventually, it will stop growing fruit.
They have provided plenty of evidence using decades of data across several industries. I have also seen some companies model their data to reach the same conclusions. They work directly with companies; you can hire them to grab your data and run it through their model to see what’s working, which is pretty interesting. But as simple as it sounds, making it happen is increasingly difficult.
Focusing on long-term growth requires a steady hand in continuously investing in your brand, and yet we see that the average tenure of a CMO decreases year on year (4.2 years as of 2022) [6].
The pressure on companies to deliver quarterly results has decreased marketing budgets. The World Federation of Advertisers (WFA) estimated a 36% decrease in 2023 and, with that, an increased focus on performance marketing – which connects investment with immediate sales results.
Whether a media investment should be considered "long" or "short" depends highly on the creative message it delivers. Accurately measuring this at scale is rather difficult for companies to implement since most media campaigns address the full funnel. So, getting that data at a granular level is hard.
JE: Why is the typical tenure duration of the CMO shortening?
CM: Short-termism. So, you can see big companies making adjustments throughout the year based on quarterly results. The cycles have become shorter and shorter, and if you have a CMO who is investing in long-term growth, you need time and patience.
You're going to invest in marketing and you're going to see the results in 2 or three years time. But you have a management team that is looking for immediate results with a message effectively saying "I gave you x amount of money, now where are my results?"
The message back is really: "Well, no, because that is not how brand growth works"? And you also have a lot of measurements that are detrimental to the conversation. It is very easy to go into Marketing Mix Modeling mode and say "We know that x amount of marketing investment is in performance marketing and sales promotion and this has given us this much sales, we can see that in the data, let’s just go with that and make that our results”.
But in doing this, you ignore the fact that the only reason that the money is performing is that you already have the investment in the brand. If you don't have brand awareness, your performance marketing will eventually run dry.
Regardless of the practicalities, the key take-away is that, as marketers, we must keep an eye on both horizons. Perhaps the most important word in Field & Binet's book is the "And" in the title! It’s not about doing one or the other, but doing both properly with the right balance.
JE: Many brands talk about purpose, but what are the characteristics of a "purposeful brand"? Here are some phrases picked from a quick Google search. To what extent do you agree with these, and what would you add (or remove) from your experience?
CM: Marketing with purpose means focusing on driving long-term value for all of the brand stakeholders, not only the consumers but quite a lot broader than that. It is core to brand building. There is a wealth of evidence showing that purposeful brands consistently outperform their peers. And I'd refer here to the work of the Institute for Real Growth, which has done a lot of research connecting purpose with financial results.
"Being purpose-driven means aligning governance, strategy, and organizational culture; and setting metrics to measure success."
I agree. Purposeful brands look into what value means to their stakeholders, incorporate this into their strategy and ensure the whole company – from marketing, to supply chain, to finance and HR - behave accordingly. To do this you need a very clear definition of purpose and how you measure up against it.
Conversely, when "purpose" is seen as a marketing tactic, it shows up as one-off campaigns or brands issuing opinions over the trendiest societal issues. And it backfires spectacularly; we have seen quite a few of those in the last few years!
"Brand purpose is a company's "why" – its reason for being and the things it stands for. This "why" is usually to do with the customers it serves and the market niche it seeks to fill."
I would replace the word "company" for "brand". Companies might have an overarching strategy but each individual brand within a company should have its own distinctive purpose which truly answers "why" the brand exists in the first place.
This is particularly true to companies that have a House of Brands (think Unilever or PepsiCo) where different brands will be competing with each other in the same category. A brand's purpose delivers value to consumers, but also to customers, employees and the community. It should go beyond a market niche. You have to ask what is the unique perspective of the brand.
"Purpose-led brands prioritize cultivating deep relationships and staying relevant by knowing that customers can act as powerful champions of brands they believe in and foils those they don't."
I tend to agree with Professor Byron Sharp’s view in "How Brands Grow" where he says brands can't rely on a small group of loyal customers and should aim for broad appeal rather than niche targeting.
A brand's purpose should be relevant enough to resonate with a large number of consumers. Some of whom will act as powerful champions for it. However, our focus as marketers should be on acquiring new customers. It is all about how you balance your long-term goals - market share growth - with short-term sales, for which loyalty programs can be a great tactic.
JE: So, from a consumer/market point of view, what is it about purposeful brands that encourage positive engagement?
CM: Consumers have evolved, and they no longer support companies that prosper at the expense of the broader community. This is particularly true for younger generations, who now look up to brands to address societal issues, from climate change to social justice. Millennials and Gen Z were the first generation to understand that they can change the world by changing their own consumption and they now look at value beyond product features, price or value for money. Purpose and other intangibles like authenticity, transparency and honesty now drive brand growth.
If you have the right definition of your brand's purpose, it will drive positive engagement because it will be meeting the consumer's needs and delivering value to them. The key role of marketing is to truly understand how that value is defined.
JE: What is the role played by digital specifically (as opposed to analog/offline) in driving brand strategy, and how can it convey purpose in a brand? Is it the case that companies still see digital as an optional add-on, an IT issue, and is this the pitfall they must avoid to stay relevant?
CM: The role of digital marketing is to deliver on your brand's communication objectives. Conveying purpose requires great storytelling; digital is a fantastic tool for adding depth. It's one thing to passively watch a 30 second TV ad and a very different one to click through to a landing page that contains immersive content, sign up for a newsletter or click through a shopping opportunity.
Digital is complementary to offline touchpoints: it offers more advanced possibilities for targeting and personalization and can therefore help you reach incremental audiences with a customized message. Most companies struggle to integrate digital to communication plans because it requires a different skillset.
Marketers need to be up to speed with ever-changing content requirements, understand data, and know how to operate tools such as a Web CMS (WCMS).
That's the reason why we still have dedicated digital marketing roles that know how to navigate the complexity and connect the IT strategy for the brand. It is a specialized job. If we did our job really well, we would render ourselves obsolete because I don't think we should have separate marketing and digital functions. Digital is marketing and ideally you should be fine with that expertise from somewhere else. However, the level of change and depth of expertise mean we have to have dedicated roles.
The name of the game here is integration and I might be the one of the few people in my role who will tell you I do not accept the phrase "digital strategy". There is no "digital strategy". There is a brand strategy and a communication plan to deliver on that and digital is one of the ways in which you are going to deliver.
JE: Why are digital touch points important and how can they affect brand engagement?
CM: Digital touchpoints aren't important; seamless communication across every touchpoint is. Every touchpoint, including digital ones, should have a clear role to play in that plan. Touchpoints such as social media or websites have greater capabilities to enable consumer engagement and have, therefore, a more important role to play. What you eventually want to have is a real clear ambition for your brand on what communication needs to deliver for the brand and then, eventually, which digital touchpoints are going to help you achieve that. Either because you're going to get that engagement right or you're going to reach incremental audiences, which is, for instance, one of the reasons why many brands go on social media. If you want to reach certain audiences, you might not find them on linear TV.
JE: What does the cookieless landscape look like for you, and how will it play out in 2024?
CM: So how you feel about cookieless and whether you're gloom and doom and panicking about it depends on the starting point on how dependent you are today on cookies. And that has everything to do with your strategy. But overall, the message is really, really clear. It's that consumers and legislation are catching up and making decisions on how much they want or not want to give you and on being empowered to block you from accessing the data. So that overuse of data that we have had in the last decades, where we felt that because we could, we should follow consumers around, was wrong and we are now taking corrective measures.
So if you put it in that context, then the question on cookieless is "What would deliver value for a consumer for them to want to give you their data willingly? What are you going to give them in exchange other than harassing them with messages that they maybe don't want to see?" and that should be the critical question of your strategy.
The second question is, "How do you look at audiences? Are you looking at broad audiences? Are you looking at super-targeted audiences? What is your audience framework? And do you really need the data to find the people that you're looking to talk to, or can you do it on a broader level without impacting their privacy?"
Honestly, as marketers, we should just take stock of it instead of trying to find ways to hijack it. There are a lot of existing models that are going to become very difficult because if you're looking only at the short term and you are looking at your website traffic - and then all of a sudden you have way less traffic - you cannot measure all the traffic. You cannot attribute every sale.
So it forces you to also look beyond and say, "OK, but was the value of what I was doing really the number of sessions on the website or the final sale? Or was there something else that this communication was supposed to do for me?"
