Brand is a word often confined to a sub-discipline of marketing. At its most basic function, it serves as a bridge between the product and the customer. However, in the current climate, brand building can no longer be viewed as solely the preserve of brand managers, nor a tick-box exercise for chief marketing officers (CMOs).
Right now, marketers are contending with very low levels of consumer confidence and contractions in consumer spend, which are only being exasperated by an economic downturn. According to the International Monetary Fund (IMF), the global economy shrank by as much as 4.4% by the end of 2020, and despite rebounding to 5.9% at the end of 2021, it's expected to decline almost one percentage point in 2022 - from 4.4% to 3.6%. Inflation is another pressure point for marketers, as inflation has gone up, real average weekly earnings have fallen 4.5%, even while nominal earnings rose 4.8% in this period. Consumers appear more worried about their finances despite strong job growth.
To navigate this “new abnormal”, businesses must face these headwinds straight on. To do so, they must first acknowledge that building brand strength has the potential to transform a business and drive strategic and operational goals across an organization.
A starting point for marketers is to ensure their brand adds value to their bottom line by appealing to a generation of consumers in flux. Consumers are more likely than ever to pay a premium for brands they know, understand and trust. They’re also more inclined to select favored name brands more regularly without being seduced by competitors.
Companies with strong brands have the added bonus of a quicker bounce back in tough economic conditions. Data from branding consultancy Landor showed that during the 2008-9 financial crisis, the value of the world’s top 50 most valuable brands fell 15 percent less than their S&P 500 counterparts and their businesses also rebounded 33 percent faster the following year.
Supporting real-world sales data from GfK also demonstrates how investing during times of crisis can set course for a long-term successful brand performance, with the brands that do so enjoying a greater market share post-recession. For context, the indexed average market share of global brands that continued to advertise during the 2009 recession was 119 in the year afterwards, compared with a score of 71 for those that failed to do so.
CMOs must build and showcase brand value
Though it’s clear that building brand resiliency is the order of the day for smart businesses, there are still several pain points marketers need to overcome to truly harness the value of their brand to leverage growth and increase its contribution to their company’s bottom line.
First, CMOs must convince their peers that brand building is not a siloed function and showcase its value across the business.
This can be done by unlocking the untapped value of more collaboration between marketing and other departments, as well as reframing what brand success means to them. Underscored by data, CMOs and other senior marketers can use their brands to help shape business strategy and inform decision-making. Having systems in place to quantify what brand building delivers to the bottom line has the added bonus of empowering sales teams to plan ahead and allowing executives to prioritize business investment.
As a starting point, marketers need to demystify the abstract nature of brand, explains Gonzalo Garcia Villanueva, Global Chief Marketing Officer at GfK. “CMOs need to be armed with knowledge about how brands are contributing to sales and attracting customers."
“They must also question whether their products and communications are generating a brand premium and what is the optimal amount they should spend on brand building. Only then will they truly understand the economics of their brand and prove return on investment,” he says.
“This also has the bonus of unleashing the opportunity for profitable growth across the business, from planning promotions to investing in internal innovation."
Finally, as marketers grapple with ecommerce and a growing appetite from consumers to showcase their purpose, they must learn to transform with confidence and stay one step ahead to secure their future and stand out from competitors.
Learn how leading experts are unlocking the power of their brand, measuring value and improving business performance using trusted data and up-to-the-moment forecasts.