The central contradiction at the heart of brand marketing was thrashed out at length at last week’s Brands Summit, though a resolution remains far off, and may never be arrived at.
Delegates to the conference, which was organised by Marketing Week, were told that great brands require consistency and long-term investment, but they knew that, as marketers, they would always be judged on short-term results.
Sir Martin Sorrell, chief executive of WPP, summed up the problem when he told the conference: “One of the basic engines of progress in multinational corporations is continuous change – senior executives stay in their departments for two to three years, and standing still is a signal of a lack of success. This leads to a lack of consistency – chopping and changing doesn’t help at all.”
He pointed to successful brands that had stuck to their guns, for instance Stella Artois, which has had “the same singled-minded advertising message for 14 years”.
Some brand owners were accused of indulging in change just for the sake of it. Nestlé came under fire from design guru Richard Seymour of Seymour Powell – presenter of the Channel 4 series Better by Design – for the changes it has made to Kit Kat. The company has replaced the trademark silver foil – ritually opened by running the thumb nail down the foil before snapping off a chocolate-coated finger – with plastic wrapping, which has to be torn at the top.
Seymour raged: “What has happened to Kit Kat? Kit Kat is something you slit up the middle and split in half. When you put [it in] plastic wrapping, it breaks that promise. The action of opening it is as important as the action of opening a bottle of champagne.”
Nestlé director of marketing Andrew Harrison extolled the virtues of Kit Kat’s redesign in a session entitled Driving growth on established brands.
“Many people think there’s not a lot more you can do with Kit Kat,” he said. But he justified the change in packaging by saying it was catering for people who are eating “out of home” and said that eating a Kit Kat has become “less of a ritual”. The flow wrap is more appropriate for an outdoor snack, and while the change may seem trivial, he added, things like that do matter. He claimed Kit Kat volume sales had grown by 30 per cent in the past two years.
Even brands that had tried to make long-term changes to their positioning were criticised at the summit. Oil giant BP was panned by Greenpeace marketing director Cathy Anderson for failing to live up to its new environmental “Beyond Petroleum” slogan.
She said: “In 2000, BP rebranded as Beyond Petroleum. It claimed it was the biggest solar energy producer in the world. But it spent $26.5bn (&£18.9bn) acquiring Arco to increase its oil production. In 2001 it backtracked, spending more on rebranding than on solar energy. If BP had not overclaimed, it would not have been a problem. BP’s rebranding was not consistent with its activities.”
The problems of short-termism within corporations could be solved by a dose of harsh medicine, according to Reuters Kalends chief marketer Sholto Douglas-Home. He argued that corporations’ staff become less complacent in recessions, as they seek to escape possible job cuts, and that this leads them to use more imagination and ingenuity. They become more productive and are more likely to stay with their company.
There was no final answer to the paradox of marketing – where the need for short-term results is pitted against that for long-term investment and continuity – other than to keep hammering home to finance chiefs the importance of continued investment in marketing.
Dr Stephan Buck, a non-executive director of research company Taylor Nelson Sofres, revealed the results of a long-term study of 26 grocery categories between 1975 and 1997. It showed that almost three-quarters of the 1975 brand leaders had maintained their position in 1997. Of these, half increased their market share in spite of a doubling in own-label stakes over the period.
“There seems to be a clear relationship between the original size of the brand and the degree to which it withstood the inroads of private label goods,” said Buck. This was linked to the strength of brands’ ad spend over the period. Buck claims that, since 1997, the brands have cut their ad spend drastically, and that this has weakened their position in relation to other, smaller brands.
“Since the economic downturn in the UK has only begun recently (or, in the case of most retailing, has apparently not begun at all) it remains to be seen whether a real recession will lead to still heavier ad spending cuts by the leading brands, and, if it does, what effects this will have on their future market positions,” he said.
But Britvic category director Andrew Marsden put into perspective the falling value of the advertising pound. He calculated that: “For an equivalent effective advertising spend, a brand spending &£1.5m a year in 1975 would have to spend over &£75m a year today.”
Maintaining the value of marketing spending is one thing, but trying to increase it by 50 times over 25 years is beyond the power of even the most committed marketers – especially if they change jobs every three years.