By Anne von Loebbecke / February 2023
BRAND MARKETING VS PERFORMANCE MARKETING
The last 2.5 years have made a fundamental impact on the marketing & advertising industry. Consumer behaviours changed quickly & digital consumption increased with rapid speed. Something Brands had to consider in their Marketing proposition & had to adopt to. When Brands focused their investments into brand building & consumer relationship building before, now they started to switch their focus on short-term opportunities that seemed more profitable with over-investments in Performance Marketing. However, while integrating Performance Marketing is vital, it has come to the great expense to long-term brand building & started to create a significant imbalance.
According to global reports & studies, brands are reaching for cost-efficient & effective methods to gain immediate return & insights on the consumer behaviour. Furthermore the majority of marketing professionals revealed that their budgets cuts are affecting brand advertising, while Performance Marketing budgets are remaining.
There is no doubt, that short-term investments in Performance Marketing are crucial, but we can’t divest from long-term investments to build strong brand equity, awareness & perception that translates to consumer relationships which we would lose, if we wouldn’t keep investing in this area.
“REALLY SMART MARKETERS BUILD THE BRAND LONG-TERM & ACTIVATE EFFECTIVELY”
Les Binet
THE BALANCING ACT
It’s not a binary choice, it’s a mix of both marketing types within the marketing strategy to be able to drive short-term wins, while building a lasting consumer brand.
I personally like to look at it as a racing championship. To become the world champion, you need to outpace your competitors with as many points as possible, which doesn’t mean you need to win every race, but you need to own the short-term opportunities, while not forgetting about the long-term goal & aspiration.
Translating it back to marketing, it means you require Brand Marketing to build long-term brand equity, awareness, loyalty, consumer engagement & relationships & gaining as much as market shares as possible with no immediate & only retrospective measures. At the same time, you need to leverage Performance Marketing to acquire new consumers, generate conversion & sales growth with instant measures.
Even though you can’t relay either on Brand Marketing or Performance Marketing, a lot of Brands / Companies falling into the trap of only looking into the short-term opportunities through Performance Marketing, and do believe it’s enough to build a lasting brand. Specifically Start-ups focus their investments into Performance Marketing for simple reasons - Brand Marketing is expensive, and mostly Start-up brand budgets are limited & Performance Marketing provides instant return & feedback. And it’s ok, to first build a solid Performance foundation as long as you don’t keep driving a one marketing methods proposition.
How you focus both methods differs depending on your overall situation & target. It’s a balancing act to drive a successful brand. A good rational that has been developed by Les Binet & Peter Field is the 60% vs 40% rational. 60% of your marketing spends should focus on the long-term brand building while only 40% should be assigned to the short-term Performance Marketing activations. Even if it seems so easy, it’s not as now a days a lot of activations & campaigns can’t be fully assigned to one of the methods. the reason therefore sits in the fact that Brand Marketing activations always consider direct response components while Performance Marketing activations & campaigns need to fuel the overall marketing strategy & targets.
Brand Marketing & Performance Marketing differences in a nutshell
PERFORMANCE MARKETING
Target: long term - brand building & market share focus
Tracking: retrospectively measurable
Metrics: brand awareness, brand recognition, brand image, brand strengths, brand search share, brand traffic share
Channel examples: brand TV, (D)OOH, print, video Ad, events, editorials, blogs, owned social media, organic social, influencer marketing
BRAND MARKETING
Target: short term - acquisition & return focus
Tracking: instantly measurable
Metrics: clicks, visits, conversion, cost per acquisition (CPA), cost per lead, cost per click (CPC)
Channel examples: email marketing, paid social, paid search (SEO/SEA), affiliate marketing, referrals, influencer marketing, addressable TV
SUMMARY
Brand needs Performance & vice versa.
Drive a healthy & balanced marketing proposition - you don’t win the long run with only one method
Make both Methods - Brand Marketing & Performance Marketing measurable - you need to have aligned KPIs & tracking mechanisms in place
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