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Short-termism is short-sightedness

 

Toby Harrison

Chief Strategy Officer

Ogilvy, Sydney
Toby.Harrison@ogilvy.com.au

 

Short-termism is short-sightedness

As a child, I was obsessed with Bruce Lee. At first it was because of his extraordinary Kung Fu skills. However, as with any obsession, my infatuation with him evolved; from marvelling at his super-human skills, to marvelling at his Eastern wisdom. To this day, I still find Bruce Lee one of the greatest philosophical minds of the 20th century.

 

In 1973, Enter the Dragon not only launched the Martial Arts film genre, but it also gave us marketeers a golden nugget of Bruce Lee wisdom. As Bruce talks with his student Lao about the journey that is learning Kung Fu, he tells him:

 

It is like a finger pointing up at the moon. But don’t concentrate on the finger, or you will miss all that heavenly glory!”

 

As it is with Kung Fu, so it is with Marketing. Since the global financial crisis, there has been a steady rise in short-term marketing activation. Sadly, this obsession with “short-termism” means that too many of us are focused only on the finger.  

 

So why are we willing to miss all that heavenly glory? Most analysts would claim it is the demands of shareholders that is driving the need to prioritize quick wins over long-term gains. If you have a toddler and you offer them the choice between one sweet now, or two sweets in 15 minutes, you’ll probably have some sympathy. However, as adults, waiting 15 minutes for a 200% return is a pretty worthwhile investment. Behavioural science explains this phenomenon as ‘hyperbolic discounting’, but truthfully it is nothing more than a lack of patience.

 

We are all told that patience is a ‘virtue’, because as the story goes it leads to better things. However, since 2012 the IPA has reported a two-fold increase in the number of short-term marketing campaigns, whilst over the same period, effectiveness has fallen by almost 25%. For many organizations, the long-term plan is simply to fund more short-term initiatives. Sadly, when it comes to brands, a succession of small wins just doesn’t add up.

 

Over time, investment in short-term activation actually erodes brand awareness and brand value. What this means is your marketing materials condition the consumer to only think of your brand when you stimulate them, resulting in less mental availability for your brand. Ultimately, this means your brand isn’t the first to mind, nor is it in the race for consideration, and therefore you aren’t in position to be preferred. The net result is that your marketing then has to work even harder the next time. It is by very definition, the law of diminishing returns.

 

This may seem like doom and gloom, but it doesn’t have to be. With over 30 years of evidence and the data to validate the strategy, long-term brand building activity is the one bet that always pays off. Best of all, it doesn’t just grow volume or share, it improves a brand’s ability to increase margins.

 

Whether Kung Fu or Marketing, let’s not concentrate on the finger.

Heavenly glory seems a far better option.