Why Three UK's Marketing Chief Believes Performance Marketing Was a Misstep

The telecoms industry has faced challenges in recent years due to tough competition, lower profit margins, and customers keeping their devices longer in times of financial strain. During these challenging times, businesses may feel the urge to cut back on their marketing efforts.

The head of marketing and communications at Three UK, Chris Gough, shared that the bosses at the company recognize the significance of brand in today's competitive market. He mentioned this during a discussion at Oystercatchers' quarterly Club event last week (23 May).

He also emphasized that even when faced with challenges, the topic of cutting performance marketing has never come up in conversations at Three UK.

In Gough's opinion, the term "performance marketing" has had a significant negative effect on the industry. He expressed his strong disapproval, stating that it is one of the worst occurrences for the industry. According to him, it has quietly become prevalent in the past ten years and creates a misleading perception for the finance department.

"When speaking with the finance director, they might say, 'Oh, that's the thing that brings in results,' referring to the brand.

Despite this belief, he thinks marketers can still find ways to protect their brand budget."

Gough advises that it is important to speak the language of the board and confidently connect it to metrics and numbers. He also suggests that involving finance in econometrics can be beneficial for marketers. This helps in framing brand investment in terms of short-term and long-term performance. Gough highlights that brand marketing, like performance marketing, can yield returns on a weekly basis.

Gough emphasized the importance of being able to have conversations in different ways and forming alliances within the organization. It could involve connecting with a commercial analytics person who has influence with the board.

Taking a step back

Given the challenging environment and the fact competition is rife in the telecoms market, Gough said Three realised it needed to “take a step back and refocus”.

Four years ago, when he joined Three from Samsung in 2022, the business was facing challenges in growing. "We weren't seeing the expected increase in subscribers, so we needed to reassess the entire brand. It was not something that could be fixed overnight."

During this period, the company made changes by eliminating the Chief Marketing Officer position and introducing the role of Chief Commercial Officer.

Three was launched in 2003 and saw quick growth through advertising. However, with competition rising and industry norms changing, just advertising is not sufficient anymore. Initiatives like free roaming, which used to set Three apart, are now expected by customers.

The focus on younger audiences has also become ineffective. Three has reached its limit in targeting this demographic, as admitted by Gough.

In 2021, the company launched its brand platform called Life Needs a Big Network, which helped it to grow once again. Gough explained that this also enhanced its loyalty program by focusing on creating lasting connections with customers.

Gough emphasized that developing the brand platform was extremely important for the brand's growth.

Editor's P/S:

The telecoms industry is facing significant challenges, including intense competition and declining profit margins. In this environment, it is important for businesses to recognize the value of brand marketing and avoid cutting back on these efforts. Chris Gough, the head of marketing and communications at Three UK, emphasizes the importance of speaking the language of the board and connecting brand investment to metrics and numbers. He also suggests involving finance in econometrics to frame brand investment in terms of short-term and long-term performance.

Gough's insights are particularly relevant for businesses that are experiencing growth challenges. By taking a step back and reassessing their brand, companies can identify areas for improvement and develop strategies that will drive growth. Case in point, Three UK eliminated the Chief Marketing Officer position and introduced the role of Chief Commercial Officer to address its growth stagnation. They also launched a brand platform called Life Needs a Big Network, which helped to enhance its loyalty program and focus on creating lasting connections with customers. This platform has been instrumental in Three UK's renewed growth.