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By: Darren Baines / July 5, 2024
Tags: Brand, Customer satisfaction, Digital

Brand Marketing or Performance Marketing? It shouldn’t be one or the other.

With access to so much real-time data from digital campaigns, it’s no wonder marketers and business owners have become hypersensitive to instant feedback loops. As Meta, Google, and other digital marketing platforms make it easier to track one interaction end-to-end, the visibility of reach, frequency, click-through, and, ultimately, sales are transparent for everyone to see.

This ease of access, alongside the need to be seen to instantly bring a return on investment of some kind, has, in my opinion, given Performance MarketingPerformance marketing is a form of advertising focused on specific, measurable outcomes, such as return-on-ad-spend, cost per click, or cost per conversion. Performance marketers are focused on immediate actions from their campaigns and typically determine their KPIs based on the objective of their campaign. Performance marketing is associated with data-driven mediums such as paid search, social, and Connected TV.
Source: https://mountain.com/blog/performance-marketing-vs-brand-marketing-whats-the-difference/
superior status in recent years. And that’s not a bad thing. For decades, marketing has been seen as a cost centre, or worse, the ‘Colouring In’ department. Thanks largely to Performance Marketing, our ability to demonstrate results that other business functions understand, has given us a little more gravitas.

On the other hand, Brand MarketingBrand marketing is the process of establishing and growing a relationship between a brand and consumers. Rather than highlighting an individual product or service, brand marketing promotes the entirety of the brand, using the products and services as proof points that support the brand's promise.
Source: https://advertising.amazon.com/library/guides/brand-marketing
appears to have been taking some extended leave. It has been demoted to defining visual identity if we’re lucky, but for some, simply having a logo is enough to accomplish their brand goals.

However, when you consider brands you instantly recognise, like Mercedes, Coca-Cola, Nike, or, more locally, Qantas, Kmart, or IGA, our perceptions of or feelings towards them haven’t been conjured through performance; that’s brand marketing playing the long game.

Having an audience that already knows you, likes what you do, and understands your brand can help swerve Performance Marketing completely. The challenge for business owners and marketing is that it takes time, consistency, and strategic direction for this to happen.

Businesses or agencies with a new client often don’t have the runway for brand perception to kick in. So, which approach is right for you?

The pros and cons of Performance Marketing

Most new businesses, products or services need results quickly. Even if those results show that there is no market for what you are trying to sell, validation and cash flow go hand in hand.

From an agency’s perspective, a new client possibly has a long-term vision in mind; however, in today’s economic climate, they are more likely to have shorter timeframes for results to kick in.
This is where Performance Marketing comes into its own. It helps us, marketers and business owners understand the impact of our marketing efforts. Fast.

It also forces you to understand what success looks like. Therefore, you are far more likely to have set some objectives or KPIs. With these objectives in place, you can adapt the campaign instantly to optimise and improve performance.

Some common KPIs that appear in Performance Marketing campaigns include:

  • Revenue – especially for ecommerce stores, connecting the dots between a marketing activity (such as Google Ads, or an EDM) to online sales, provides justification or commiseration. Sometimes, this is then used to calculate Return on Ad Spend (ROAS).
  • Conversion Rates – The percentage of users who completed a desired action (or Key Event). This can be an online sale, but it could also be booking an appointment, click to call, or submitting an online enquiry for example. When you measure this, you can benchmark any variations and see how they impact the percentage.
  • Click-through Rate (CTR) —The percentage of users who click on the ad after seeing it. This is useful to identify whether your message or creative is working hard enough to stand out and motivate action.
  • Cost Per Acquisition (CPA) – This will help you identify how much you have spent on ads to generate a new customer, helping you understand the campaign’s profitability. However, you need to understand the Customer’s Lifetime Value to really appreciate whether it’s been profitable or not.

Performance Marketing can also feed into your brand positioning for new brands, products, or services. If you can create profitable sales, reach new audiences, and gauge their feedback, you can build a picture of what customers like, why they like it, and their reactions to your product or service.

The problem or drawback with Performance Marketing is that you are trapped in a loop unless you develop a relationship or connection with users outside of Google, Meta, or other online tools. Your marketing budget will forever be cornered into running ads to compete and stay visible. When Performance Marketing is combined with Brand Marketing, businesses can then turn their advertising to focus on growth, not just achieving the status quo.

The pros and cons of Brand Marketing

When we talk about Brand Marketing, we consider much more than the visual identity (or logo), specifically, the brand’s positioning. We focus on defining the brand’s personality and on how that brand highlights its unique selling point or strengths and values.

If done well, a brand will establish an emotional connection with its audience. So, whenever that brand is mentioned, a picture or feeling toward that brand is instantly retrieved from the limbic brain. To do it exceptionally well, the brand is so embedded in our minds that whenever we have a need, we instantly gravitate towards them, without seeking alternatives or succumbing to Google or Meta ads.

Why is this important? It negates the need to rely on ads to generate repeat or new sales continuously and allows the brand to become a market leader. More often than not, a market leader commands a premium price, and with that comes higher margins.

But if that’s the case, why are businesses and marketers not actively seeking to strengthen their brand position?

In contrast to Performance Marketing, the KPIs or benchmarks don’t instantly relate to sales. CFOs and CEOs are probably less inclined to worry about brand metrics in the short term. However, if long-term success is in play, then measuring your progress in delving into your consumers’ hearts and minds is crucial.

Some common KPIs that appear in Brand Marketing include:

  • Brand Awareness – the degree to which your audience remembers you and your products or services. You can often use indicators such as social mentions, branded searches on Google, or brand recall in research, to help measure this.
  • Net Promoter Score – how likely are your customers going to recommend you. If you want to build a strong reputation, you need fans or advocates. Therefore, periodically monitoring how satisfied your customers are is vital.
  • Brand Satisfaction or Sentiment – does your target audience like you, and do your customers like the product or service you deliver? You can gather this information through satisfaction surveys, attrition, referral numbers and social listening.
  • Share of Voice – calculating how visible your brand is advertising, marketing channels, community discussions and forums, will give you an indication of whether your brand is recognised or not.

While advertising helps increase the share of voice, it’s often the content or creativity that carries the message. With this in mind, Brand Marketing tends to invest in building emotional connections through powerful ads, generating content or PR that is seen as helpful or educational to their target audience, or through the power of association often seen with celebrity or industry sponsorships and influencer marketing.

What should you focus on?

Depending on your business lifecycle, you may need to lean more one way or the other. However, we always recommend a balance between both within your marketing mix. Focusing too much on short-term results can expose you to competitors who are securing a leading market position. On the other hand, ignoring short-term results could often reduce the lifespan of the business altogether, so the brand either fails or fails to understand what its target audience is looking for.

Darren Baines

Marketing Specialist & Director

Darren is an experienced marketer, having worked both client and agency side to deliver digital and traditional campaigns.

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