My work convinced IPA judges. But do I still agree?

There are few better ways to learn about yourself than to revisit old opinions, poke around for holes in previous arguments, consider why you might have gone wildly off-base, and enjoy a handful of moments where strong hunches turned out to be right.

Recently, I have spent time reflecting on The Hare & The Tortoise, my dissertation for the 2015 IPA Excellence Diploma which won the President’s Prize that year.

Its central thesis, summarised below, holds up well. But with the hindsight borne of 2023’s fragile, frenetic post-COVID economy, it is possible to see how the paper missed the critical connection between its recommendations and that decade’s unique economics of low interest rates and plentiful availability of cheap capital to invest in growing businesses. That missing connection reveals some lasting truths about effectiveness.

The case for the two-stage brand building model

At its core, The Hare & The Tortoise argued in favour of a two-stage brand building model with newer, smaller and vulnerable brands needing a set of ‘fast’ (Hare-like) marketing tactics, drawn from other brands with similar characteristics to them in order to grow. This was in place of advising these smaller brands to follow generalisations about the advantages of ‘slow’ brand building drawn from the experiences of older, bigger and less threatened (Tortoise-like) businesses seeking to profit in their maturity.

This proposition of two-stage brand building was mostly supported three years later by Binet & Field’s invaluable publication, Effectiveness in Context (IPA, 2018). The latter report pointed out that, yes, when you analyse effectiveness across the brand lifecycle, newer brands are indeed different.

Per Binet & Field, newer brands really were better off investing more into a performance marketing-led approach and prioritising short-term metrics. By contrast, the best effectiveness goals of mature brands (especially category leaders) were to maintain market share and boost pricing power. Prior to this insight, some marketers of newer, smaller brands were likely adopting those established, universal brand-building rules, generalised from a very different group of businesses, to potentially ill-effect.

Start narrow, then expand

Eight years ago, my essay also recommended that new brands should start with a narrow scope and deliberately focus on a fraction of the market that they could monopolise before going broader. I believe this argument has been validated by some notable corporate successes and failures in the years since.

Tesla, for example, has managed this journey spectacularly well. It built a cult following with high-priced, high-performance models before addressing the mass market with the launch of the Model 3.

Conversely, the co-working space company WeWork, showed the flaws of going broad quickly, disregarding the risks to its brand image from riskily flooding the world with cheap office space.

The precipitous decline of WeWork (which earlier this year reported ‘substantial doubt’ about its ability to continue in business) also showed the danger, warned about in my essay, of spending aggressively in a company’s early years. Unnaturally high initial investment can warp perceptions of customer appetite and create a model dependent on artificially high levels of promotion and customer incentives. A business built frugally and sustainably, its initial results not inflated by over-spending on promotion, is likely a business better equipped to identify the incremental value of marketing in the long-run.

Consistency alone is overrated

Some of the essay’s other observations have been helped by later evidence (or lack thereof). For example, consistency in brand building was – and is – lazily characterised as a magic wand, a way of turning water into wine. Yet System1 evidence has demonstrated that, whilst effective advertising remains effective over time, initially ineffective advertising appears little better when repeated; their data found the correlation between initial and subsequent performance of advertising was nearly perfect.

Brands need to be less worried about commitment and more focused on quality: find something great and commitment can follow. (Interestingly, confirmation of the broader point I was trying to make in my essay comes from recent research published in the Journal of Business Research which has suggested that young brands do have license to be inconsistent.)

Similarly, my essay’s argument that distinctive brand assets are often a product of the brand’s success - albeit one they must embrace in the long-term - rather than a cause, seems to chime with broad data and specific example. The best real-world effectiveness stories on distinctiveness that followed publication, such as the remarkable work of AMV BBDO on Guinness, invariably remain those of storied, recognisable leaders. Meanwhile, Kantar’s work on breakthrough brands suggests that they are defined not by distinctiveness but by their difference. 

Effectiveness is shaped by the surrounding economy

Yet, in hindsight, the gaps in my essay are also evident. First, what is most clearly missing is an acknowledgment that, at any given moment, our understanding of effectiveness remains invisibly shaped by the economic landscape in which we serve.

As investor Jason Calacanis noted last year, businesses such as Uber were once focused on rapid acquisition because until a few years ago that was simply the market’s expectation. Today, with interest rates up, making it more costly to raise funding, businesses are expected to focus on margin.

These two distinct eras of business, separated only by a few years, should remind us of two things. First, we should treat best practice imported from one era to another with reflexive scepticism; second, that marketing effectiveness often exists downstream of the business cycle. It was only last year, for example, that Engine won an IPA Effectiveness Silver for their work launching Cazoo – a brand that, post-COVID, saw its expansion plans falter. It can be possible Cazoo’s marketing was effective against its contemporary goals, but ill-suited to a business environment that it was not asked to anticipate.

Sometimes, the choice is: penetration or profit?

This introduces a second lesson. It is at our peril that marketers ignore unit economics (in most instances, the cost of acquiring each additional customer compared to the forecast revenues from that customer).

In stressing an acquire customers-at-all-costs approach, my original essay implicitly assumed that every business could build from an economic model shaped mostly by software companies and the typical margins in the software category. (This was ironic given that, overall, the essay was trying to reject the idea of universalised thinking, such as the belief that a single set of brand building rules apply to all types of brands). But not every business model is equally profitable, and, sometimes, not all customers are equally valuable.

If, like Uber recently had to, you want to increase your margins, then if you had previously made your brand ubiquitous in order to increase customer acquisition, that will be a hindrance to achieving higher margins. Sometimes, brands really do face a binary choice of prioritising either growing penetration or profit.

Consider what happened to the former Nissan CEO Carlos Ghosn, when he tried and failed to raise both Nissan’s market share and its margin. In making enough cars to grow its market share, Nissan left dealers with an oversupply that they could not reduce without cutting prices. Whilst pricing power can be grown, truly effective marketing must match a company’s economic model. 

This journey will never be finished

The third reflection is simply about difficulty. In striving to outline a new model of brand building, my 2015 essay presented effectiveness as a solved problem. Yet the experience of even successful, enduring brands, such as Square or Spotify, in the years since, shows I was being over-optimistic. Both brands did much to create their markets, leading with clear proprietary benefits. Yet both had to compete against legacy brands muscling in on their market share, turning potential monopolies into costly scraps.

We can still learn when best practice fails

To finish, some words of encouragement. Mostly, I remain proud of the essay not because I got some things right, but because I sought to explain those things that felt wrong, the cases that made little sense under the orthodox assumptions.

Whether the essay fully answers these problems is moot. Invariably, our firmest beliefs today will feel naïve in a few decades’ time, but the issues it foresaw illustrates how important it is for all of us to keep pulling at these stray threads.

What furthers the usefulness of our industry, I believe, is not seeking the comfort of existing theory, endlessly trapping ourselves in circular references, but spending time with the outliers and rule-breakers, challenging ourselves with the contexts and cases where best practice has seemingly failed.

That is, and will forever be, the task of the next generation of brand-builders.   

Charlie Ebdy is Chief Strategy Officer of OMD UK

The opinions expressed here are those of the authors and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.