The answer is $.60 on brand, $.40 on direct response.

Why?

Because, as the curve below shows, that  60:40 split produces the optimum long-term benefit. The most financially beneficial, long-term effects are about growth, defined as profit and market share, not volume growth which is often a short-term activity delivering little to no improvement in margin or share.

If you want to improve your mission, do more brand building.  These recommendations, on whole, apply to the nonprofit sector.  Let me repeat that, this cannot (or shouldn’t) be discounted or ignored as commercial sector only.

But, before some of those brand-building bandwagon folks beat their drum too loudly, the brand building that actually matters is that which increases name awareness and salience (i.e. prominence or importance).

Cute, clever, funny, emotional, witty, brilliant…only matters if the person remembers the ad and associates it with your brand.  The vast majority of brand build advertising falls woefully short of this aim as only about 20% of campaigns are remembered and correctly associated a day after exposure.

This report, The Long and Short of It, has some other, very clear findings based on a very large dataset, the IPA Databank.  This dataset represents 30 years of data, 700 brands in over 80 categories and 996 campaigns.  And it includes commercial sector and nonprofits and while there are a few, minor differences it didn’t bear breaking out in the report as the short-term/long-term effects are too similar.

I’ve listed (and paraphrased) a few here but it’s well worth reading the report.

• A single, brand-building campaign run over a year is much better for long-term growth than a series of short-term, response-focused campaigns. Long-term campaigns aimed at share and profit always produce short-term effects, the reverse is not true.
  • Implication: How many charitable appeals are built out to deliver a year-long strategy? We could probably post-rationalize that all or most are but that seems very different from intentional focus on doing this.  I’ve sat in (or skipped as the case may be) way too many one-off campaign (singular) planning sessions to not wonder if we need a re-think.
• As Peter Drucker said way back in 1993, “Long term results cannot be achieved by piling short-term results on short-term results.”
  • Implication: If your charity is small or medium size it cannot grow (market share and profit, very different from volume) without building the name awareness and salience of the brand.  Big brands didn’t start that way.  But most big brands got that way by spending a lot of money on communication, including direct response but far, far from exclusively.
• Volume growth is easy but pricing power and profit take longer and activity designed to maximize the short-term tends to reduce long-term effectiveness.
  • Implication: At first blush, this feels like a commercial sector-only finding as price means discounting and other promotional give-aways that make consumers price sensitive, a sure sign of undermining tomorrow to win today.   But, how many charities elect to have a really low ask amount on acquisition and double down on that volume growth plan with freemiums and premiums?
• Reducing price sensitivity is more profitable than increasing volume.
  • Implication: Low ask amounts at acquisition and premiums are creating price sensitivity.  Your existing donors have a powerful mental anchor that determines their giving amount – their past behavior.  And not their highest previous or most recent, but rather their giving average.  That average is set, in part, by the initial ask amount.

Ask yourself, how much of your direct response campaign is designed to increase brand preference for your organization?  I’d wager little to none if only because I’ve yet to see that listed or reported as a campaign metric.  And what gets measured gets managed.

But the question is begged (and partially answered in the report), can a single communication do both – build the long-term metrics (market share and profit) and the short-term (cash and volume)?

In a word, yes. But it seems highly unlikely this can be pulled off if not done purposefully. Even then, it ain’t easy or everybody would do it.  Instead, about 30% of the campaigns in the dataset are what the authors dub, ‘brand-response’.  They are the have-your-cake-and-eat-it-too panacea; delivering short term with very little sacrifice on long-term.

There is a strong, social science argument for these communications being the option that best matches how consumers feel, think and behave.  Said differently, the funnel of brand building on top and activation (direct response) only after you’ve built the brand salience is to ignore human decision making and processing.

Our brains are the world’s most powerful, parallel processors taking in brand-building messaging and sales promotion simultaneously.  This means we are almost surely leaving money on the table by not including some activation message in the ‘brand-building’ communication.   DRTV is probably the most obvious example, when done well.  But, the effectiveness needn’t just live on the tv screen..  Consider how F2F, for example, is capable of building brand while driving sales.  Or any medium for that matter.

But again, unless you are explicitly talking about how your campaign is going to build brand salience and preference, it probably won’t.  And, unless that becomes an overarching, multi-year goal the profit and market share growth will be elusive.

Kevin