There are reams of case studies, meta-analysis, books and tedious PowerPoint presentations on best practice in advertising effectiveness. But there’s a yawning gap in practical and academic advice when it comes to effectiveness insights for scale-up companies.
I spent my formative years in mature businesses such as Unilever, Birds Eye and The AA, and learned my effectiveness trade from the masters, including Les Binet and Peter Field and the Ehrenberg-Bass Institute, with some hand-holding from industry bodies like the IPA and Warc. But as chief marketing officer and now chief executive of Eve Sleep, I’m leading the marketing efforts of a young brand where every penny’s impact is immediately felt and it just doesn’t seem so simple any more.
Eve is a scale-up that is rapidly growing up. Scale-ups are not start-ups, but businesses in their growth phase, seeking to grow quickly. Our challenge at Eve is navigating the path to sustainable growth. If you're a company looking at growth at all costs, your choices are relatively simple and you can "growth hack" to chase the dollar. At Eve, we’re on a path to profitability in a highly competitive, mature market and sustainable profitability .
Naively, I assumed that when it comes to advertising effectiveness, there would be little difference between large established businesses and scale-ups. But a growing scale-up is typically on a one- to three-year journey towards profitability and there’s no forgiving baseline brand equity upon which to rely.
At Eve, a huge amount of sales variance is driven by our advertising and wider marketing. That means if we get it a bit wrong, it goes very wrong, very quickly. But when we get it right, it goes very right. Exciting? Yep. But can I find any decent research, case studies or analysis of the effectiveness journey I need to follow? Nope. I joined the UK council of Effie Worldwide to help find a solution and drive the understanding of marketing effectiveness for scale-ups and fast-growth brands like Eve.
Case studies are so hard to come by in this brave new world of fast-growth ecommerce, because sustainable profitability hasn’t yet been widely achieved. The effectiveness conversation to date has relied on large-scale meta-analysis of IPA banks and long-term data – neither of which is directly relevant for scale-ups. Added to which, most scale-ups aren’t working with the sort of agencies that invest in unpicking effectiveness.
However, some agencies are starting to get a handle on scale-up communication effectiveness. Jonathan Trimble, founder and chief executive of And Rising, told me: "We’ve seen real success using a balanced scorecard. Pressure on last-click performance based on a single channel view is relaxed in favour of a focus on an overall channel mix, incorporating broadcast channels and ‘brand’ much earlier in the growth cycle."
At a scale-up, effectiveness must be achieved over the short term and it has to generate a multiplier effect rather than a steady cumulative impact on business performance. That means brand investment has to work hard from day one.
This is never more evident than in the current Covid-19 climate, where monetising short-term demand becomes a much more crucial objective. But we mustn’t be suckered into shifting spend to the short term without keeping an eye on the equity we’re building or we’ll fail in our task of building tomorrow’s sustainable brands in the fight for today’s scraps.
But how to do this? Is the winning combination of TV and digital effective over the short term for a scale-up with the need to generate profitable sales more quickly? What are the insights around what other channels bring to the mix? How important is brand-building in nascent categories and how should we balance the building of brand awareness with response-driving metrics when awareness is less than 20%?
If you took John Lewis & Partners' total investment from day one to today, at what point did it become profit ROI positive? I suspect the timescale is too long for your average scale-up to genuinely take lessons from this case. Where are the scale-up profitability heroes? Who is our John Lewis?
Increasingly, however, scale-ups are attracting more seasoned marketing talent to guide them through this difficult stage of their growth, with all the benefit of their experience and a well-trained gut instinct to draw on. As Andrew Gibson, chief strategy officer at Creature London, notes: "The client mix is changing in the scale-up sector and the biggest shift is towards a brand focus rather than a response focus."
As we face the multiple recessionary and lockdown scenarios we can all talk ourselves into and out of over the next two years, having the confidence in the role that softer metrics have in the long-term health of a business born from experience of more mature brands is key.
However, this old dog has learned a few lessons over the past year that should stand us in good stead regardless of how the post-Covid-19 story plays out.
Reach-based investment is vital for short- and long-term growth
There comes a point where you’ve plucked all the low-hanging fruit and you need to reach beyond in order to grow your business. We shifted from a strategy of performance TV to a more reach-based plan, and this move has paid off in terms of econometric ROIs, brand metrics and profitability.
Get the basics right
When your business is small, every interaction is a proportionally much bigger part of your brand experience and can have a much greater effect on brand consideration. As a smaller business, you are less able to cope with the inevitable volatility of growth, particularly in rapidly evolving markets, which is exacerbated in times of unpredictability in supply and demand – for example, during a global pandemic. So getting your experience, availability, SEO and searchability, web conversions and customer journey right should be the beating heart of the business.
Focus on the metrics
While some metrics are brilliant indicators of long-term performance, you need a different lens for short term. Long-term metrics don’t have to take long to get. There are immediate indicators of long-term effectiveness in small businesses and this is where search insight in particular comes into its own.
To some, advertising effectiveness for scale-ups may seem a niche concern. But as more senior marketers move from big corporates to high-growth smaller businesses, and as scale-ups' budgets represent an ever-growing part of the media and advertising spend in this country, best-practice insight is critical.
Cheryl Calverley is chief marketing officer at Eve Sleep, and will become chief executive from Monday 1 June. She is a UK council member of Effie Worldwide – a non-profit organization championing marketing effectiveness through awards and educational programs.