Marketers are concerned with growth. Consumer-centric profitable growth for their organisation and their customers, ideally having a beneficial or at least neutral impact on society and the environment.
Within this broad framework, the question of protecting or bolstering investment in brands gets a lot of attention. It has been intensely under the spotlight for the last three years. Firstly during Covid, when many brands were forced to cut spend as demand collapsed and they had to worry about paying salaries and keeping the lights on, or indeed did not need to spend as demand outstripped their ability to supply the market. Subsequently, for almost two years now, inflation in raw materials, freight and overheads has put enormous pressure on marketing budgets as prices grow ahead of consumer spending power.
A more persuasive pitch will come from recognising how these system factors affect the decision maker.
The weight of empirical evidence for investing in brands is strong – from the extensive IPA database to the work of Les Binet and Peter Field, and more recently from Grace Kite, whose work is of great practical use to client-side practitioners. Despite this, marketers still find it challenging to get commitment from organisations to invest ‘the right amount’ in their brands using rational, fact-based arguments. What do you do when data does not make the case and it can seem as though organisations are irrational?
Often the spotlight falls on the critical relationship between marketer and finance director or managing director, but when marketers in my team are struggling to cut through, I ask them to think beyond relationships and interrogate the biases of the system they are in. My experience is that focusing here can create an argument more aligned to what motivates the decision maker, or at least it can pinpoint the most critical factors which will inhibit investment unless tackled.
So, what are the kind of things you should consider?
Vision and strategy
This is nothing more complex than understanding what the organisation is prioritising and deprioritising in order to grow, the sources of competitive advantage, and what success looks like. If brands and consumers are not at the heart of a strategy, marketing investment is likely to be a nice-to-have. Pay attention to whether strategic choices flow through into other elements of organisation design. If building brands is important, ensure it is properly wired into to these other elements and it is not just a top-down strategy to which lip service is paid.
What motivates your leaders and how are they rewarded? Is the focus primarily on output metrics alone, such as revenue, volume and profit over short-term horizons such as the next quarter and financial year? If reward does not include competitive metrics such as market share, and maintaining and growing strong brands, you may have an issue, as there are many more short-term paths to growth that may not require brand investment. More sophisticated organisations will recognise the importance of building the value of their most important assets – their brands – and therefore will ensure leaders are rewarded on a broader set of KPIs.
Structure and power
This is all about recognising the dynamics of decision making – is the organisation flat or multi-layered, centralised or decentralised? In organisations which are rigid, layered and authoritarian, decision making can be bureaucratic, whereas in those which are more fluid and dynamic, decision making can be spontaneous and democratic. There are pros and cons of both extremes – decisions in a fluid environment can be fast but reactive and lose sight of the bigger picture, whereas in a formal business it can feel slow. Understanding how decisions are made is critical to influencing investment and may be more nuanced than it seems.
Skills and capabilities
Do decision makers have the skill and mindset that will enable bold decisions around brand investment? What are their beliefs and values? What is their appetite for risk? What have they experienced in the past which may make them well or ill disposed? Are they confident in a broad range of growth levers, and do they understand how they can work together? In a high-inflation market, for example, pricing and pack price architecture may be more important to maintain profitability than a primary focus on media.
Are there sufficient processes in place to govern effective decisions around brand investment? These include clarity on the KPIs or action standards for investment governing the likely risks and returns, and appropriate evidence for different levels of spend. Are the effects of prior decisions reviewed without prejudice to create a learning culture in the business, focused on making batter future decisions?
Diagnosis of these drivers is essential to developing the pitch for investment. A more persuasive pitch will come from recognising how these system factors affect the decision maker – how their role links to strategy, on which KPIs they are rewarded, and elements such as their appetite for risk, their own personal motivations and how the system constrains or empowers them. It will also help you recognise where the conditions for getting an appropriate level of investment do not exist.
System-based thinking is brilliant for marketers wanting to be effective beyond making the case for investment. It can help drive greater productivity from your marketing department and identify opportunities for more effective ways of working. Too often, we focus in on individuals and their performance, but greater change can come from really understanding how the system creates the conditions for performance – either constraining or enabling individuals and bold actions.