How brands grow up
Back in 2009, Jeff Bezos famously said, “Advertising is the price you pay for having an unremarkable product or service.”
Not to put too fine a point on it, but this is nonsense. Well, it’s mostly nonsense.
Oh, to be young again.
Let’s say you’re running a brand new start-up. And you’ve just launched a very remarkable product into the world. It’s one of those products that solves a problem people didn’t even know they had. Everything is coming up you.
Sure, your new company is so new it can’t eat solid food or hold its head up yet. It poops weird colors. It keeps you up at night. Yes, you worry about it and love it in equal measure. And you’re excited because …
You’ve got buzz. You’ve got momentum. You need sales.
At this stage, nearly all of your marketing dollars should be spent on short-term, sales tactics. Not all. Nearly all. Brand is important, but right now sales are more important.
A few years go by, and you notice that sales aren’t down … but they are slowing down. You also discover it’s becoming more and more expensive to acquire new customers. Prohibitively expensive.
You’ve hit a plateau. It’s perfectly normal. In fact, it’s not a plateau at all … it’s a milestone.
There are lots of milestones in the life of a brand.
Growth is better with brand ads.| Source
This is when you shift from more short-term sales tactics to more long-term brand advertising.
Why?
1. 95% of your potential customers are not in-market. And depending on your sales cycle, they won’t be for a long time.
That means they’re not thinking about you. They’re not on a journey to find you. They’re nowhere near a funnel.
You still need to build fame, feeling and fluency. You still need to reach this audience. Because at some point they will be ready to buy, and your brand needs to bubble to the top.
Les Binet and Peter Field recommend a 60/40 brand to performance split. That’s a guideline, not a rule. Your brand and category will be a little different.
Of course, you also need the right channel mix because not all reach is equal. Also, there’s no such thing as an easy button when it comes to media strategy.
2. Now you’re big enough for your competitors to pay attention.
If your plan is “scale to sale,” great. Having a stronger brand means the cost of your acquisition goes up.
If your plan is to take on category leaders and grow, great. Having a stronger brand helps you play defense while you go on offense.
Every time you hit a new milestone, it’s time to reassess your media strategy and your marketing spend if you want to keep growing.
If all goes well, your brand grows up healthy and happy. And because you’ve worked hard, listened to the market, done everything else mostly right and got a little lucky — you’re now a category leader.
At this point, you should be spending nearly 75% of your ad budget on long-term brand advertising.
Fifteen years after Bezos’ comment, Amazon is one of the biggest advertisers on the planet. They spend Carl Sagan amounts of money (billions and billions) on brand ads and activation tactics each year.
As a mature brand, they’re trying to drive growth and acquire new customers while holding off their competitors. And they have a lot of competitors.
In retail, there’s Target, Walmart, Best Buy, Costco and so on
For subscription services, there’s Netflix, Disney+, Apple and Google, etc.
In web services, there’s Oracle, Microsoft and IBM, to name a few
As an ad platform, they’re taking on Meta and Google.
They grow up so fast, don’t they?
We’ll see you next time!
Source!
As startups grow, so must their advertising and measurement sophistication