Why short-term sales don’t always mean long-term success – Nielsen

It’s not something anyone likes. It is human nature. And the fast-paced nature of our lives today, amplified by the speed facilitated by digital connectivity, increases the pressure to move faster – in all aspects of our daily lives. This is also true for business. Connectivity and digital technology, as well as high-speed communications, by their nature accelerate the pace of our work. Marketing is no exception. But depending on the goals of the brand, it may be time to make some adjustments.

Brands have hundreds of options to choose from when they consider their marketing technique, and they have relied heavily on these options in recent years. For a long time, conversion-focused advertising has been an industry favourite. This digital focus grew even more when the pandemic hit and brands scaled back media campaigns.

Strategies focused on digital growth, regardless of COVID-19, drive sales for the quarter. Most importantly, a focus on near-term sales — and the ability to measure the impact of transformational marketing — drives investments in these strategies. Marketers are quick to assert that they are steadily increasing their financial spending via conversion-oriented channels at rates much higher than traditional channels, such as television and line radio. The 2021 Annual Marketing Report revealed that marketers surveyed intend to allocate their highest spend to search engines, social media and mobile video.

Brands must have a comprehensive and balanced marketing strategy that defines their business objectives. However, conversion-oriented strategies will not succeed when customers are the main objectives of the business. This strategy is also in direct conflict with many academic studies that show that top-track market strategies are the most effective way to grow. Our latest report shows that marketers surveyed rank customer acquisition and brand awareness as top priorities. This directly contrasts with their higher spending.

The downside to our accelerated lifestyles is that it is easier (and faster) to increase sales than to create campaigns aimed at mass reach that will take longer to produce positive results. Long-term sales are hard to measure. Many marketers rate the effectiveness of traditional media as less than that of digital.

Our recent Advertising Trust Survey found that people trust traditional forms of media more than digital ones. Our most recent marketing report notes that brand marketers often face challenges in measuring the return on their investment in TV, radio and print media. However, our SMB experience database shows that a single point increase in brand metrics (such as awareness or thinking) results in sales growth of 1% on average. This means that a $100 million increase in brand sales will result in an additional $1 million.

The effectiveness of sales activations is also improved through top funnel activities. For example, SMEs recently measured the effectiveness of a financial services company’s marketing efforts in increasing sales across nearly 20 markets. Brand awareness and market consideration vary between markets. SMEs have discovered that there is a strong relationship (0.73) between marketing efficiency and brand metrics in the top conversion funnel. Therefore, equity may be feasible for brands to not only create direct sales benefits but also indirect benefits from improved activations.

Creating relationships with your customers is essential and the value of offering meaningful engagements to nurture them is not underestimated. Digital channels can be an important tool for strengthening relationships with consumers in an era of increasing choice and declining loyalty. To achieve true brand growth and long-term business viability, marketers need to balance their conversion efforts with initiatives that put their value proposition in front of consumers who are not yet familiar with it.

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