Inception was in theaters. Kanye was making music videos like this. Facebook was a place to post stupid stuff with your friends. TikTok was just a song by Ke$ha.
Yeah, a lot’s changed.
Since then, I’ve been helping companies communicate with their customer base. This post contains my personal takeaways along with some aspects of the marketing world that worry me. The pandemic exposed flaws in the system and left some brands in the dust, but the conditions have been building up for years.
Most brands today advertise in a way that fails their customers and compromises their future growth.
3 particular factors created those conditions. If they sound familiar, it’s because they extend to our broader global situation. Advertising, an expression of our culture, also reflects many of the transformations (and flaws) of our culture.
Understanding the root problems of the system is the only way to fix it.
1. Barrier breakdown made production and omnipresence possible.
TV used to be the main barrier to getting customers’ attention. There were fewer options, only a structured schedule, and standardized formats.
Ads were a big part of pop culture. They also sold a lot of products and made trillions for businesses.
Most businesses couldn’t get past the TV barrier. Costs were high and businesses had to rely on a solid agency partner. But some of the most creative work from this time came from today’s most influential brands
Meanwhile, two things converged:
Production tools became cheaper and more available.
Automation and data made omnipresence and laser-targeted focus a lot easier.
When media consumption started to shift from TV to cyberspace, the barriers to entry were lowered.
What did this mean for brands and advertisers? Well, on one hand, it seemed great: fewer middlemen, lower costs, and more control. Many businesses started to handle marketing internally.
On the other hand, more competitors got their shot at advertising. New brands flooded and disrupted every sector. Getting in front of consumers was easier, but standing out became more difficult. When everybody has your attention, nobody does.
A crucial disconnect started to happen here.
2. Long-term thinking helped certain companies thrive.
Advertisements have two goals: sales (make people buy something) and brand-building (tell them why that thing matters).
Digital ecosystems made it easy to measure sales. They enabled real-time data monitoring, endless metrics, and total surveillance on customer behavior. Everything became trackable, automatable, and immediate.
Those conditions allowed a particular type of advertising to thrive: Direct response. This kind of advertising pushes you to act right here, right now. The more data on those actions, the more the algorithm learns who to show the ad to. The better the data, the better the results.
Many agencies shifted to this performance-based model. As the name suggests, performance marketing means the effectiveness of a campaign is boiled down to tangible metrics: sales, leads, impressions, etc.
Brand-building, on the other hand, deals with less tangible metrics: reputation, values, mind associations. These are much harder to measure and take more time to build. But they’re the biggest driver of customer preference and they account for most of the enterprise value.
On paper, performance marketing seemed great both for the agency (they could prove their effectiveness) and the client (they understood what they were paying for). But a system that only relies on performance is flawed: it’s biased toward the short term.
Short-term thinking has plagued both companies and agencies. Turnover in corporations steadily increased. New CMOs had different ideas and were eager to prove their worth. Agencies were incentivized to focus on short term goals. Clients had in-house departments and needed to win attention at a low cost and in large numbers. Fast turnarounds became the norm and everything was needed yesterday. Creativity became a luxury few could afford. Agencies were hired for the output (ads) instead of the outcome (solving a problem).
It's estimated that brand value alone makes up an average of 19.5% of enterprise value. Neglecting this means weaker and less resilient brands. It even happened to Adidas recently. In business terms, this neglect means losing future cash flows. Strong brands drive future cash flows by creating return customers, convincing people to pay more, securing distribution, etc.
This created the conditions for certain companies to establish monopolies.
Covid has only accelerated this process.
If customers don’t see or understand your brand, why would they choose you over another?
3. Polarizing dialogue has blinded big business.
The industry seems split between performance and brand marketing. The former focuses on short-term sales activation, the latter on long-term brand-building.
Performance marketers focus on rationality: we get you sales now, and here’s the precise ROI.
Brand marketers focus on emotionality: we make customers come back and make sure they see you as the top in the category.
Budget allocation shifted to the first group.
Brand marketers had a harder time proving their results, despite the research behind them.
This was also their own fault in some cases. Like many debates of our time, this was polarizing. Both sides became dogmatic about their beliefs.
Many performance marketers glorify sales and consider anything that isn’t sales-oriented to be “fluff.” Many brand marketers glorify "purpose" and openly despise any type of messaging aimed at selling. They shelter behind lofty ideals with the conviction that, one day, their viewers will wake up.
But in most cases, it was the fault of some corporate executive. Someone who thought a new ad campaign could solve racial inequality, toxic masculinity, or whatever topic was trending with their demographic that month.
Mark Ritson, brand consultant, and marketing professor puts it like this: “Brand purpose is mostly nonsense talk. There are a couple of brands, like Ben and Jerry’s…they were founded with purpose first. But for most of the brands in the room, the banks and telcos, these noble purposes that all sound the same – they are not differentiated, customers don’t give a shit.”
If anything, customers are waking up to the fact that they’re being bombarded with corporate propaganda.
To recap: short-term-focused performance marketing is bad, but so is excessively long-term brand marketing that doesn't sell. As Tom Roach puts it, “Short-termism and long-termism are both just wrong-termism.”
Both prevent you from seeing who’s in front of you: real people.
4. Prioritizing humanity improves advertising.
The solution lies in seeing the divide for what it really is: not an “either/or,” but an “&.” Businesses need sales and a brand. They need great in-house and out-of-house talent. Long term results shouldn’t come at the expense of short term achievements, and vice versa.
Short-term activation spikes bring in measurable ROI. Long-term brand building raises the ceiling for those spikes. The whole is more than the sum of its parts.
The connecting tissue between sales activation and brand-building? Creativity.
Creativity is key in making the complex simple. It helps your customers understand your value. Treat them like humans, not just aggregated data. Remix your messages in different ways.
I started Storyforma to help brands in the long-term as well as the short-term. I started it to show what creativity can do for enterprises.
That’s already happening. Smart brands are ditching generic, one-size-fits-all advertising in favor of much more identity-driven advertising. Take Nike and their three-minute film about being a Londoner, which became one of their most shared campaigns ever.
Look at Square and their project “For Every Kind of Dream.” It consists of a series of short, unforgettable documentaries. Each one centers on a different family and captures the ethos of Square’s brand. All while generating massive news and traction. Neither even mentions the product - that happens in other channels.
Take Shopify, for example. In partnership with Spoke Studios, Anonymous Content, and Saville Productions, Shopify Studios is producing feature documentaries and series. One of them, “I Quit”, is now airing on Discovery Channel (and even Reddit had positive words about it). Mailchimp has been doing something similar through its entertainment division Mailchimp Presents. They’ve been creating original series, films, and podcasts aimed at entrepreneurs and small-business owners. Look at Lyft and their provocative series about immigrant communities and Lyft drivers across America. Other examples include Typeform, Rapha, and Yeti. The list goes on (Jay Acunzo put together the most complete one).
Great marketing is about identity. The influential brands of tomorrow will be the ones that inspire belonging and connect with their customer base on a deeper level.