Once rivals, these two disciplines are collaborating and finding new ways to drive revenue
By Thomas Anderson, Sarah Mier, David Novak and Mat Zucker
A new wave of détente is developing across corporate marketing departments. And those who are collaborating well are finding it a critical component to unlocking value and revenue growth.
Brand marketing and demand generation teams—faced with growing complexity of spending decisions—are working together more often and marketing executives are eager to have a more holistic conversation about them. The traditional tensions between them, which can undercut growth and harm performance, are easing as both look for new ways to engage customers and increase sales.
Change has always been a constant in marketing, but today’s industry feels different. Senior marketing leaders say the scope and speed of changes they confront each day make decisions more difficult. Given the pace of change, marketers are looking for ways to improve and optimize their campaign and media spending.
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Even though companies have oceans of data, insights and powerful personalization tools, customers are harder to attract and engage. The paths they follow to purchase are no longer linear as they move through an increasingly omnichannel world. And just as the external marketing rules are being rewritten—often in real time—internal guidance is shifting. There are more stakeholders with new demands.
The most successful marketers say that because their agile test-and-learn approaches help optimize results, they’ve taken a more disciplined approach to experimentation.
Marketers must make hard tradeoffs with finite resources and face pressure to do more with less, even as tried-and-true best practices fall by the wayside. With an urgent need to be more customer-centric, the classic “marketing funnel” concept, for instance, becomes more limited in its relevance.
Against this backdrop, brand marketing, which typically describes efforts to drive awareness and build equity, and demand marketing, which aims at getting audiences to take immediate action or conversion, are working together more closely, finding new and more efficient ways to reach customers.
The most successful marketing organizations actively try to bridge these divides. Indeed, as our research shows, in the most successful companies, these relationships are blossoming into a brand-demand love story. And these organizations offer practical lessons for all marketers.
Definitions are blurring as marketing technology and automation evolves to shift possibilities and expectations. “What is brand and what is demand?” asked Karla Davis, vice president of marketing, Ulta Beauty, a company actively integrating its marketing capabilities. “The answer seemed a little gray, but as we created opportunities to better operate cross-functionally within marketing, we’ve unlocked greater impact and influence internally and externally.”
What the Most Successful Marketers Have in Common
We at Prophet, an international brand management company, went directly to marketers to understand how they think about the relationship between brand and demand. We first explored the topic through interviews with over 10 senior marketing leaders. We then took our learnings and hypotheses from those conversations, fielded a survey with more than 500 global marketing and advertising professionals to further understand how they are thinking about the topic—and what separates those that are using brand and demand to successfully fuel business results.
The most successful marketing organizations are focused on three key characteristics.
Focus on fewer–and more meaningful–business objectives
Today’s marketers might gauge their success in dozens of ways. And you might expect that those in performance marketing would gravitate toward one set and brand leaders another. Not so. The most successful organizations say that customer lifetime value, improving brand loyalty and enhancing brand trust are the objectives that matter most.
Conversely, those working at organizations they consider less successful are more likely to prioritize creating a seamless customer experience, enhancing digital marketing support and coordination with channel partners as objectives.
Senior marketing executives believe in the value of connecting marketing’s investment to key business performance indicators. Reporting progress in terms of value versus oblique marketing metrics is a best practice. They’ve found corporate boards don’t want to hear about clicks.
“Your job as a marketer is explaining what the impact to the business will be if we shut down brand or demand marketing,” says Portia Mount, vice president of marketing at Trane Technologies. “Marketers can get spiritually exhausted explaining value to the business. We look at pipeline and shadow metrics to connect back to our business agenda.”
There may be a tendency to connect brand and demand marketing to specific channels. But there is also an opportunity to think more holistically, using the channel ecosystem to achieve key marketing objectives. Marketers also note an increase in cross-channel coordination aligned to customer segments and business objectives instead of teams focusing on channel-centered optimization.
Experiment. All the time.
It is clear that marketers can no longer follow last year’s playbook. Many companies believe they’ve instilled a test-and-learn mentality because they occasionally use pilot efforts. But the most successful marketers say that because their agile test-and-learn approaches help optimize results, they’ve taken a more disciplined approach to experimentation.
They describe the need to integrate their planning process to include both brand and demand functions as an essential way to make more thoughtful bets. “I like to think of my marketing investment like a financial portfolio,” says Marissa Jarratt, 7-Eleven’s chief marketing officer. “I make sure we are invested in bonds that will deliver returns in a predictable manner year-over-year. And then I think about how we can take on new risks. We should think of our spend as a portfolio of risk deployment.”
Some call this disciplined experimentation a “learning agenda.” An executive at one company with brand and demand goals, for example, routinely categorizes experimentation levers by spend allocation, channel mix, targeting and tracking, brand and creative and incentive and urgency.
To maximize learning, the most successful marketers combine both leading and lagging indicators. That allows them to predict both financial outcomes and consumer behaviors. This ensures they can make faster course corrections when a bet fizzles out.
Redefine customer centricity
Amid so much customer data, it’s easy for organizations to think they are customer-centric. But true customer centricity requires a constant commitment to deeper understanding. It’s what can help brands build relentless relevance, which our ongoing research shows is an essential ingredient for companies.
The most effective marketers make customer centricity a constant goal. Senior leaders stress the value of deeply knowing customers. Growing trends to increase that knowledge include building centralized teams to synthesize market insights, developing integrated go-to-market plans, creating or managing assets, and developing strategies for digital channels.
At the same time, they’re working to link enterprise or corporate teams, where brands are often managed, to the business and product teams that are accountable for demand.
“The transition our organization needs to make is from a siloed linear approach to more agile, ‘brains in room’ format,” says Tyrrell Schmidt, chief marketing officer of TD Bank, U.S. “We want to build a structure that puts the customer at the center.”
One of Jarratt’s favorite examples includes an ad campaign that grew out of social immersion. It identified a trend of customers posting photos of their cars in 7-Eleven parking lots, an insight that was infused into marketing campaigns and brand experience.
“Customers are telling us something that they believe about themselves and their relationship with 7-Eleven,” she says. “And those are the insights we need to drive the business forward.”
It’s Time to Rebuild the Marketing Function
Companies need the power of both brand and demand marketing to transform and become digitally converged enterprises. In the most successful organizations, the two disciplines are already closely linked. Focusing on taking the relationships to the next level can help companies achieve uncommon growth.
Even in organizations actively trying to bridge the divide between brand and demand marketing, that’s hard. Competitive tension still exists, with each striving to prove their efforts produce more substantial, measurable results. Typical marketing organizations exacerbate the problem by creating two teams that often plan and invest in silos.
“There are the performance people and then the brand people,” says Jennifer Warren, Indeed.com’s vice president of global brand marketing. “And that gets in the way of doing what we need to do.”
The biggest challenge continues to be creating balanced budgets and allocating investments equitably. Many marketing leaders confess to being “obsessed” with finding the right investment mix. There’s plenty of conventional wisdom: One common industry standard is the 60/40 rule, an investment recommendation proposed by Binet & Field’s 2013 study. The thesis calls for allocating 60% of the marketing budget to brand efforts and 40% to demand.
No matter how cherished your brand’s logo, package or product might be, product categories are evolving around you, and your brand has to evolve with it.
Such rules of thumb offer quick, evidence-based solutions. They also help defend brand investments. And many marketers feel compelled to do that, as they’ve watched e-commerce and digital gain the upper hand in budget battles over the last 15 years.
However, such rules aren’t good enough anymore. They may not fully account for the many variables of consumer behavior, broader market trends or the specific business contexts companies face. Modeling investment and measurement decisions using product lifecycle stages, such as product launches and mature offerings, can better track progress toward specific goals.
Sudden market shifts and disruptions mean it’s critical to develop more agile planning and budgeting processes. “It’s not about finding the perfect proportions to balance brand and demand,” says Ashley LaPorte, director at communications firm Rally, “but finding a flexible framework that understands how everything connects.”
To meld brand and demand in this new and future-focused way, there are four action steps marketers can take now. These can smooth the connections between brand and demand marketing, maximizing the value of each.
- Design: Build a marketing organization with the skills and capabilities for both brand and demand, with teams working together to support a shared purpose. Create and empower a marketing operations function to orchestrate and manage resources across shifting priorities, continually improve marketing processes, and measure performance against business objectives.
- Plan: Beginning with annual plans, integrate all marketing approaches. Marketing can guide this process for commercial and product lines. Consider using the customer journey as a canvas rather than the conventional channel approach. Build to support business objectives, not only marketing goals and prioritize initiatives and activities together.
- Experiment: The use of test-and-learn efforts need constant reinforcement. Write a specific learning agenda and provide an investment budget that can be opportunistic during the calendar year as well as tackle emerging channels and technologies.
- Measure: Track performance and progress with an integrated brand and demand view. Report to the C-suite as a unified marketing team with shared goals.
Ulta Beauty, the leading U.S. beauty retailer, is an example of how significant the impact is when creating a more collaborative marketing function. The company sought to recalibrate its marketing model and shift from product and category-focused operations to a more integrated approach, keeping customers at the center. The company aimed to balance brand-building with demand efforts for the many brands it sells to beauty lovers.
Ulta Beauty’s marketing operations team tracks, reports, prioritizes and redeploys resources to create more agility and importantly, to maintain focus on customer and business needs.
“We pushed to think differently about our structure and what would serve us best in the short- and long-term,” says Karla Davis, vice president of marketing at Ulta. “This effort led to greater synergy, efficiency and ultimately effectiveness across our growing marketing organization. And it did so in ways that benefit our teams, brand partners and ultimately our guests.”
Moving Toward Marketing Integration
Brand and demand marketing have much in common. Both are under intense pressure to make every dollar count. Both are asked to deliver more with less, even as customer journeys have grown more complex and less linear. And while new digital tools and tracking technologies have sharpened their efforts, an overabundance of data has slowed marketers down at a time when speed and agility are at a premium.
There’s no need to pick sides, choosing brand over demand or vice versa. Instead, innovative companies are clarifying how both tactics deliver on shared outcomes. They also have unique operating models and capabilities to maximize experimentation and keep their customers at the heart of their efforts. And they’re doing all this in service of achieving business objectives shared by the whole organization.
They know brand and demand-generating activation can no longer be viewed as competing functions. Instead, they are interdependent, reinforcing capabilities that comprise the core of the overall customer experience.
This change bears repeating: Brand and demand are writing a new love story. They’ve long been drawn to each other’s strengths. They can compensate for the other’s shortcomings. And it’s about how the ultimate power couple can help companies achieve uncommon growth.
Thomas Anderson is an engagement manager, digital at Prophet, the global consultancy. Based out of the Chicago office, he works with organizations to enhance customer acquisition and retention efforts across digital touchpoints.
Sarah Mier is a senior engagement manager out of the Prophet San Francisco office. She is focused on driving growth through customer empathy and rich market insight in fast-moving categories, including media, technology, and retail. Experience includes Google, Atlassian, Facebook, Autodesk, and recently launched cybersecurity brand, Trellix.
David Novak, a senior partner and co-leader of marketing & sales in Prophet’s New York office, is an expert in digital transformation strategy, with extensive experience in customer experience innovation, marketing/advertising technology rationalization, and performance marketing consulting.
Mat Zucker is a senior partner and digital marketing leader based in Prophet’s New York office. Co-leader of the firm’s global marketing & sales practice, Mat helps clients transform digitally, finding new areas of growth in marketing, content and communications.