Kraft Heinz shocked investors in February when it disclosed a $15 billion write-down on its most famous brands, one of several stories across the year that pointed to marketers focusing on short-term activation at the expense of long-term brand building.
The suggestions that a focus on cost-cutting at Kraft Heinz had meant neglecting brand investment and innovation was rejected by global brand officer Eduardo Luz. But by the end of the year new CEO Miguel Patricio acknowledged there had been problems and that 2020 would see the business “redirect dollars disproportionately towards support of our flagship brands”.
The boardroom appears hazy about the whole notion of brand building: a global study by the Financial Times, in partnership with the IPA, highlighted how business leaders and marketing chiefs are under-investing in building and maintaining their brands – even though they are convinced that strong brands generate commercial returns in the long run.
The same study found that over half of business leaders – including 30% of senior-level marketers – rate their knowledge of brand building as average to very poor.
One reason for this may be the lure of digital metrics that lead many marketers to focus on short-term activation where they can see instant results. But they’re wrong, according to Les Binet, head of effectiveness at agency adam&eveDDB. “Brand building is more important in a digital world than it is in the old economy,” he says.
What marketers should be doing “is making digital activation work efficiently by supporting it with broad-reach, emotional brand building.”
Sourced from WARC