How do you properly budget a successful rebrand and activation?

Eric Meerschaert

Eric Meerschaert

Executive Director of Strategy

Eric has a deep background of marketing leadership at Global 500 software companies, and was President of Click Commerce. His strategy roots grow from McKinsey & Co, where he learned that analytics, not instincts, drive the best corporate and market strategies.
When budgets are tight, many companies cut their awareness budgets first and return to them last.

A recent article in Forbes points out that companies “cut quickly and repent at leisure because the brand awareness challenges you have which ultimately drive preference and loyalty can unfold over a longer period of time.” That means CMOs need to work harder at fighting to get their budgets back because it might not be “quite as simple as they think it will be.”

Marketing Budgets Continue To Get Slashed, Even As Companies Look To CMOs For Growth

Branding and rebranding often fall under the “awareness” umbrella, so even though they’re essential to a brand’s success they’re often executed under tight budget constraints. If that describes your organization, how do you properly allocate a budget for a successful rebranding?

Frustrated at the lack of guidance on branding budgets?

I did some research over the last several weeks to find best practices in budgeting for a new brand. I found articles that told people how to do it for $40k—a dream we may have all had. When I dug into those ideas, however, I found their definition of “branding” was a logo and a style guide. A true branding campaign is far deeper, more extensive and more impactful.

Can anyone fully define, create and activate a brand for $40k? It seems unlikely.

I then looked for budgets for brand activation. After all, what good is a new brand if you can’t activate it and change your perception in the marketplace? But I didn’t find anything helpful. I found out how to set my overall marketing budget. I found activities and ideas for activating a brand (and a frighteningly long list of experiential marketing ideas). But nothing on budgeting for brand activation.

If you’re as frustrated as I am, here are some ideas I’d look forward to exploring with you. In this point of view, I’ll share some ideas for getting a “real” brand budget—ideas that cover the full range of creating and activating a brand that you’ll love.

Set budgets based on the value of a standout a brand.

Standout brands generate measurable return on investment, with benefits stemming from incremental market growth.

Companies with solid products and market execution should be able to grow at market growth rates. A rising tide lifts all boats. (If, of course, your boat does not have a leak. Check for leaks first and fix them.) But companies who wish to grow faster than market rates require a standout brand. So, the benefits of a new brand can often be calculated as incremental growth beyond the current market growth rate.

For example:

Brand Incremental Growth Table

In this example, a $100 million company is growing at the market growth rate (7%). They are seeking 15% annual compounded growth. The 8% difference in revenues between market growth rate and their targeted growth rate can be used to determine their appropriate investment in branding. In this case, their investment in the brand can be as much as $2.75M and still achieve a very high ROI.

Note that we have not included shareholder value in our calculation (ask your CFO for help here). In my experience, a standout brand contributes not just to earnings but also to increased shareholder equity. Marketers will unlock the true value of brand creation and activation in this more complete view of ROI.

What about the division of the budget between creation and activation? Let’s take a pragmatic point of view on the breakdown:

1.

Set top-down guidance with your teamWe suggest as a starting point using 20% of the budget for brand creation and 80% of the budget for activation. There certainly are complex house-of-brands situations that demand more in brand creation.

2.

Build the brand budgets from the bottom up. Use 80% of the branding budget for awareness. These budgets should include events, more typical awareness building, and other online and offline investments. Once again, use the budget as your upper boundary. Well planned, some of these events will and should also create leads, but let your awareness/brand launch budget stay focused on awareness.

3.

Validate the budget and ROI. Validate with sales and executive management if the organization is prepared to rise into the new level of bookings your new brand will create. Also, validate that the organization is ready for a robust internal brand activation program. Without the commitment and readiness to the brand launch, results won’t happen.

Jail Break Your Brand

Don’t jailbreak your brand under the darkness of night.

You need more than a 2-to-3-hour session to plan an effective brand activation, and it requires a lot more than just an updated website, new collateral and a digital awareness campaign. We call this minimal approach “jailbreaking” a brand—and we’ve seen it produce minimal results.

Instead, we suggest launching a robust brand activation program across all key customer touchpoints. If you include this approach in your ROI calculations, you will find adequate budgets for BOTH creating and activating a brand you will love—a truly standout brand.

Eric Meerschaert

Eric Meerschaert

Executive Director of Strategy

Eric has a deep background of marketing leadership at Global 500 software companies, and was President of Click Commerce. His strategy roots grow from McKinsey & Co, where he learned that analytics, not instincts, drive the best corporate and market strategies.
Want to learn more?

Want to learn more?

Let’s have a conversation, not a sales call. Reach out to Doug Duty at info@studionorth.com.
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