Earthquakes start with a rumble, then shake the earth until the ground settles a few inches from where it was before. The marketing world’s own seismic event is now following the same pattern.
The tectonic plates of the world’s biggest advertisers’ media budgets have been shifting all summer. In May, there were 20 major media accounts — including Procter & Gamble, L’Oreal, Johnson & Johnson, Sony, Coca-Cola, and Unilever — on the move, reaching a total of about $25 billion of global spend, according to estimates.
But we know how they will settle: remaining in paid media, landing within the roster, moving by a few degrees towards digital. The shaking is dramatic enough to wake agency executives; the resulting landscape barely changes.
Imagine a more dramatic scenario. Media mega-pitches reveal that brand owners are willing to stake billions of dollars to build their brands. What if those budgets really did start moving around, and brand owners were free to use that money in any way to build their brands? Not just between agencies and channels, but into anything that a customer could experience?
A review where everything was open to question in pursuit of growth would play out very differently. Because today’s most dynamic brands haven’t built their success on ad spend. They have built it on action. They use their brand story as a guide for what to do, more than what to say. They are famous for their innovations as much as their campaigns.
A brand that leads its marketing with action and innovation is a "story-doer" and now set the pace in most industries: Target in fashion retail, Disney in entertainment, Starbuck’s in restaurants, Amex in finance, Apple in electronics and JetBlue in air travel. And they are outperforming their ad-led storytelling competitors.
Many of this year’s pitches spring from the search for growth. Since 2007, these storydoing companies have enjoyed an average 9.6% revenue growth, while the storytellers have averaged 6.1%, according to our research.
All pitches will touch on earned media: 69% of story-doers’ social media sentiment is positive, compared to 58% for the storytellers. And the tougher spending reviews will aim to achieve more with less.
Story-doers achieve their growth and word of mouth with ad-to-sales ratios of about a third of their storytelling peers: typically 0.7% versus 2.5%. This suggests CMOs reviewing their budgets should start with an innovation roadmap before their media plan.
If story-doers succeed with one-third the media budget of an equivalent storyteller, imagine if brand owners now pitching their media budgets put the remaining money into innovation. What seismic change could these companies achieve with $25 billion of brand-inspired new products, pain-point fixes, and white-space business launches?
Citibank could build business around its mission to enable growth and progress with a chunk of its $435 million global media budget. How many cities could it revitalize with its bike scheme? How many customers could it win with a combined checking, savings and credit account to give lower-income families a shot at financial stability?
Sony, which reportedly spends $2.7 billion on media globally, could finance a studio for filmmakers who come up through social media instead of film school.
Part of BMW’s reported $750 million global budget could launch an electronic vehicle rental business, earning revenue and promoting the i3.
The opportunity isn’t moving money between channels, it’s moving marketing budgets from telling stories to doing them. The billions now in play could bankroll a shift into innovation that would be truly seismic for brands and their customers.
Tom Morton is director of strategy at Co:Collective.