Mark Kennedy.
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Mark Kennedy, Managing Partner – Consulting, Kantar Australia
Tensions are growing. No s*#t Sherlock.
We have never had more market understanding or better marketing tools, but across industries, teams are under pressure and being asked to do more with less. And many brands are struggling to cut through and protect margin.
It is not what you’ve got, it is how you use it.
The truth is growth is found in uncomfortable places.
Australia is changing and changing fast. People’s attitudes and aspirations are shifting, demographics are changing. Like many countries, we are seeing a generational change.
For brands and businesses, past success is a poor predictor of future performance, and this is before AI really bites. But there are few key focus areas that I believe can really help.
What does good look like?
Without a proper understanding of market demand and opportunity, it can be hard or impossible to determine what good looks like. With phrases like ‘cost-of-living crisis’ and a general lack of confidence, businesses can lull themselves into thinking poor or moderate growth rates are a solid achievement.
The reality is that growth rates are incredibly inconsistent across markets. Some areas are flat, but some are booming and ‘settling’ for, so CAGR can be dangerous.
Is your CAGR great, ok, or awful?
Unless businesses fully understand the growth in market or are stuck judging success off ‘what we did last year’, you simply don’t know how efficient and effective your marketing and sales efforts are. You can be out-performing key competitors but still be nowhere near unlocking the growth potential in market. In many cases categories are out of step with market demand as it rapidly shifts.
So, it is critical to understand what good really looks like in fast changing markets.
A proper understanding of a market’s true commercial potential gives a clear measure to assess efficiency and performance against.
The long and the short of it.
The increasing fixation on short-term, bottom of the funnel performance we have seen in the years since COVID is now really starting to bite. Our own studies reveal that it is currently a race to the bottom in Australia where almost half of marketers find performance marketing makes it easy to communicate the returns (47%) and two in five say it drives more short-term returns than brand marketing (42%) and supports the pressure that they feel from the C-Suite to achieve targets (38%).
As brand equity is slowly eroded, as investment has been cut or shifted to performance marketing and COGS has crept up. Brands have simply lost the power to take price at the point that they are the most desperate to do it.
In essence, many brands have shifted equity value to the P&L. They are not really growing; they are just taking short-term gain for mid-term pain.
And thanks to lag effects, when the problem raises its head, it happens fast and can be very hard to turn around.
ROI should always be a double-edged sword, return to equity as well as a return to the P&L. Robbing Peter to pay Paul has been going on for a while now and this eventually leaves the marketer in the firing line.
So, it is critical to understand both the short-term and long-term ROI and how to balance trade-offs.
Measuring ROI to sales and equity gives a full understanding of the impact of action and demonstrates if ROI is real or just shifting returns from one place to another.
It is the VIBE(S) of the thing.
To quote Denis Denuto, that great legal mind from the classic movie The Castle, “In summing up, it’s the constitution, it’s Mabo, it’s justice, it’s law, it’s the vibe and aah no that’s it, it’s the vibe, I rest my case”.
At Kantar, VIBES is a momentum measure. Are you Visionary, Innovative, Bold, Expressive and Sustainable?
Are you more or less vibrant than the category you belong to and the expectations the market has of you?
If you can understand your vibrancy compared to the hopes and expectations that your end users have of you, then you can understand your momentum - am I moving fast enough or do I need to move faster?
So, it is critical to understand your cultural vibrancy and how fast you should be moving.
Momentum is directly correlated to growth. And growth depends on you exceeding market expectation not just outperforming those around you.
Creative wears in rather than wears out
In a noisy and shouty world, consistency is key, but consistency and sameness are very different things. Consistency is staying on message, staying on brand -a clear compelling idea consistently delivered.
In a world where measurement shows over 50% of communication has no effect at all - either positive or negative - brilliant creative built off a clear positioning, delivered consistently has never been more important or more effective.
Yes, there is a lot of noise out there, but most of it is being ignored. Great, consistent creative is a force multiplier of media spend but spend alone will not save you.
So, understand the power of your creative and media and then stick to your convictions.
Avoiding the flip flop when the pressure for instant impact is high can be hard, so arm yourself with the measures and evaluation techniques that are well and truly proven to build success.
A bias to action
The tsunami of data, analysis, martech tools and the promise of AI are brilliant and enormously exciting, but there is no replacement for action. What we now have access to is truly revolutionary, but it is not what we have that matters; it is how we use it to drive performance and grow the business in the short-term AND the long-term that matters.
Raising the floor is great but it is raising the ceiling that really matters.
It is not what you’ve got, it is how you use it.
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