- Frayed nerves: the struggle for marketers to balance short-term reporting and long-term strategy, read the cover story here
- Read what the long-term aims are of big brand owners who were at the Festival of Media
- Millie’s Cookies marketing director Justine Noades tells us the how the brand manages its short and long-term plans
There is always a tension between delivering short-term financial performance and building brand equity. That includes investment in people, training and research and development, not just brand communications.
The stereotype in the marketing community is that finance people are sort of stupid and don’t understand anything beyond quarterly earnings. But that’s not the reality. Ultimately it is the chief executive, chairman and board who are accountable to the shareholders – all of whom understand that you reduce the value of the business if you make certain decisions purely in order to generate short-term numbers.
The onus is on marketers, new product development people and HR people or anyone who is asking for investment and a longer-term view to provide a convincing argument and some evidence.
The same is true when the chairman is facing institutional investors. He is trying to convince them that there is a strategy and that it is the right thing to do, even if it means short-term profits aren’t going to go up perhaps as much as the City would like.
The risk of focusing too much on the short-term is you underinvest on ‘hard’ and ‘soft’ assets and that includes brands. The job of marketing is the generation of short-term cash flow and the building up of intangible assets that lead to long-term cash flow.
There will always be a balancing act between those two.
The main drivers of brand equity in the long term are not marketing communications. For example, Apple is a great brand – it is brilliant at design and communications. But that is not why it is the most valuable company in the world – it is the products and customer experience, and that involves consistency of investment.
Those marketers and chief executives who want to invest in the business and take a long-term view of financial performance [will find that] the financial markets and the chief financial officer are willing to listen – but you’d better have a pretty good argument and have some evidence to support it.