Why Marketing and Finance need to be in sync
If we throw more money at it, our marketing will be better, right?
We’ll go viral, expand our reach, and get more leads.
This is the kind of blue-sky thinking that happens when Marketing and Finance aren’t having the same conversation.
Sophie Neary, Group Director at Facebook (Meta) for the UK and Ireland explained that social marketing and commerce has shifted massively in the past decade, and the two departments need to be in sync to stay ahead of the game.
Shifting behaviours
The way in which people shop has fundamentally changed. Instead of it being a routine and active, conscious decision, shopping is now embedded into everyday activities.
Instead of going shopping, consumers are now always shopping. When scrolling through social media, such as Instagram (although it is now almost any form of social media) users can easily see something they like and purchase it.
Not only is purchasing now a part of social media usage, but the curated nature of our algorithmic lifestyle means that the super-targeted products we see naturally increase the likelihood of seeing something we actually want to buy.
Author and marketing expert Les Binet remarked:
“How people make decisions hasn’t changed, but it’s the way we reach people and influence those decisions that’s shifted.”
The attention economy has shifted massively, and the trends suggest that it will continue to go even more mobile.
IPA Touchpoints 2014-2020 highlight this massive shift, above is the attention economy in 2014, below is today’s average user consumption.
Discovery is now far more likely to happen online, with 84% of online shoppers surveyed in a recent Facebook poll stating they discover new brands and products online.
An example Sophie used to highlight why all this matters was the money spent-to-reach ratio after the infamous Meghan Markle interview with Oprah.
At its peak, 12.3 million Brits tuned in to watch Harry and Meghan open up to Oprah on ITV. Advertisers paid in the region of £120,000 for a commercial during the breaks.
To achieve that kind of reach on Facebook and Instagram would cost closer to £36,000, roughly 70% less than the primetime TV slots.
So, are you investing your company’s market spend to meet your customers where they are? According to Sophie, being customer-first now means being mobile-first.
Short term gains vs long term growth
Research published by McKinsey in 2019 found that when companies look forward and manage over a long term horizon they outperform their industry counterparts on key financial measures.
Whilst using rational messaging tactics can bring about short term sales uplifts, the brand perception will remain unchanged.
This results in small rises and falls in sales in the short term, but does little to improve the longer term strength of the business.
Investing in methods such as emotional priming reinforces a strong brand image, and will lead to long term, albeit slower, sales growth.
The size of your business and where you are in the company’s lifespan will affect the budget split between brand focus and activation.
Consistent randomized testing will help establish what is working well for your brand and what needs addressing.
Sophie suggests shifting from annual planning to agile planning and intentional experimentation to streamline your budgetary spending and maximize growth.
Her six final takeaways we’ll leave you with are:
- Change breeds opportunity, grasp them
- Customer-first means mobile-first
- How people choose hasn’t changed, where they are has
- Are you driving short term sales at risk of long term profit
- Never stop testing
- Are you taking advantage of existing social and conversational commerce capabilities
