Overcoming ROAS Stagnation: Brand Building the Marketing 3.0 Way
To optimize marketing through brand building, a strategy needs to focus on creating a strong emotional connection between the brand and its customers while aligning with their values and beliefs. In Marketing 3.0, the emphasis shifts from merely satisfying customer needs to addressing their values and human aspirations, which requires a more human-centric approach.
“How can we optimize ROAS?” is a question frequently posed by clients. It reflects a collective concern shared by marketers, from small businesses to multinational corporations.
Faced with pressure from management and the allure of ad agency account managers, many marketers fall into a familiar trap: increasing budgets without a meaningful impact on ROAS.
The cycle is predictable—cutting budgets often leads to a sharp drop in sales because most activities focus solely on price promotions, which directly drive traffic but offer no long-term value. Sound familiar?
The answer to breaking free from this stagnation lies in brand building. By investing in a strong brand, businesses can achieve sustained growth, even during challenging times. Consider Airbnb: during the COVID-19 pandemic, the company slashed its marketing budget by half, yet its revenue reached 95% of pre-pandemic levels. This resilience was not due to excessive advertising but rather to the strength of its brand.
The Pillars of Brand Building
In Marketing 3.0 by Philip Kotler, Hermawan Kartajaya, and Iwan Setiawan, three marketing disciplines—Customer Management, Product Management, and Brand Management—are highlighted as essential for building a resilient and impactful brand.
1. Customer Management: Communitization
In a hyper-connected era, consumers naturally gravitate towards communities where they can share ideas and experiences. Brands that thrive today are those that integrate themselves into these communities.
How to Apply:
- Actively listen to your customers’ perceptions, needs, and expectations.
- Facilitate meaningful connections between your brand and its audience, as well as among the audience members themselves.
2. Product Management: Co-Creation
Differentiation is a perpetual challenge. Collaboration with stakeholders—customers, employees, or partners—enables brands to develop unique solutions that deliver both tangible value and shared values.
How to Apply:
- Engage stakeholders in the product development process to create offerings that resonate deeply.
- Use collaborative efforts to build products or services that reflect your brand’s authenticity and customer needs.
3. Brand Management: Character Building
Much like individuals, brands require a strong, authentic identity. Customers today are adept at discerning between genuinely good brands and those relying solely on surface-level branding.
How to Apply:
- Develop a brand DNA that is both original and realistic.
- Be transparent about your strengths and weaknesses to cultivate trust and credibility.
Reflective Questions for Your Brand
To evaluate whether your brand is successfully building its foundation, consider these questions:
- Are you actively investing in brand building?
- Does your brand have a strong presence in your customers’ communities?
- Is your brand valued for the solutions it provides, or solely for its price promotions?
- Does your brand possess a trusted and authentic character?
The Impact of Brand Building on ROAS
Brand building is not just a buzzword—it’s a strategy for long-term resilience. By focusing on building strong relationships, co-creating solutions, and establishing an authentic identity, businesses can free themselves from over-reliance on price promotions and create sustainable growth.
Instead of chasing short-term ROAS boosts through excessive ad spending, shift your focus to strengthening your brand. The payoff will be a more loyal customer base, better marketing efficiency, and the ability to weather challenges with confidence—just like Airbnb.
Now the question is: Are you ready to build your brand the Marketing 3.0 way?
