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Performance or brand Marketing: Which promises the greatest success?

Performance or brand Marketing: Which promises the greatest success?

Kai Geertsema, director DACH at Analytic Partners debates the qualities of performance and brand marketing and looks at where they should fit in the marketing mix

In many companies, a point of “conflict” often occurs between supporters of more modern performance marketing and proponents of more traditional brand marketing.

The first group are the sprinters or tacticians who want to get to their goal quickly – often using a Multi Touch Attribution (MTA) tool for the seemingly short-term optimisation of marketing efficiency.

An advantage of performance marketing is the demonstrably direct connection between marketing campaigns and sales. But the downside is that they mostly ignore the long-term effects of their actions.

The second group – the brand marketing advocates – is more long-haul and strategic.

In many companies it has still not reached the stage of providing hard evidence of profitability but does help by showing increases in indirect KPIs such as brand awareness, determined through surveys. So there if often pressure to justify brand campaign investment, especially if the connections between the indirect KPIs and sales cannot be known or precisely proven.

A balance between the two disciplines reconciles the short and the long haul and the balance between performance and brand marketing can be determined with the right analyses.

What’s behind performance marketing?

Performance marketing focuses on sales and conversion numbers and targets customers to secure a purchase.

Performance marketing goals tend to be short-term. They steer the customer, for example with the rapid sale of certain products or ranges to meet monthly or quarterly targets.

As performance marketing is digital, cause and effect can be more easily analysed. But it instils an impatience – why deal with long-term strategies when MTA can prove short, quick successes?

The crux of the matter, however, is that the MTA only provides this evidence for individual digital channels while leaving out the big picture. If certain touch-points are ignored, the customer journey will be misinterpreted because important points of contact with the brand or the product are neglected, despite these being essential for the purchase decision.

As a result, the effectiveness is often overestimated, and successes are incorrectly attributed solely to performance marketing – while other marketing activities are overlooked.

The risk is that marketing budgets are shifted to performance marketing and cut elsewhere – with long-term negative effects.

What’s behind brand marketing?

The aim of this form of marketing is to build emotions in consumers, to provoke their curiosity about the brand in the short-term and to strengthen their trust in the brand in the long-term.

In an ideal brand world, this involves developing and expanding USPs and promoting brand value and the positive emotions around the product or service experience.

All of this should pave the way toward the brand purchase decision and when it succeeds, it’s more likely that the consumer will automatically choose the brand without making extensive price or product comparisons beforehand. The trust and preference have already been established.

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Admittedly, reaching this stage is a complex and lengthy process, which – if done correctly –has lasting effects and long-term success.

Brand marketing is often accused of failing to provide evidence of measurable benefits for sales or profit. Many companies still mainly use qualitative market analyses or surveys to determine how the customer relationship with the brand is developing over time, without hard business metrics. So, it’s no wonder that many companies are turning to performance marketing, especially in the wake of the ever-increasing ecommerce.

Either or both?

However, the success of brand marketing is measurable and can be compared to performance marketing. Here, meta-analysis shows, for example, that brand messaging scores 80% better overall than performance messaging and performs consistently well at the same time, although it depends on factors such as the perceived value of the promotion, the communication and how much of the brand message permeates consumers.

Other analysis show that brand marketing has a long-term ROI that can be two or more times greater than the short-term ROI.

Looking at both marketing disciplines, it becomes clear that performance marketing usually only works for a short time and then quickly subsides.

In contrast, brand building ensures a steady but slow upward trend, which usually has an impact across all channels.

Ultimately, however, all modern marketing needs both and – to be successful – requires the right mix of channels and tools.

Invariably, emotional brand building – often in the form of TV advertising – forms the grounding with digital activation through performance measures, then used to trigger emotions and generate more reach. Social media is often used to support both goals.

Brand and performance marketing can clearly benefit each other, but the question remains of what their respective share in the marketing mix should be?

According to Les Binet, group head of effectiveness at adam&eveDDB, the starting point is the 60-40 model – brand development makes up the 60% share, with the remaining spent on supporting performance measures that generate short-term sales and accelerate growth.

Conclusion

Performance marketing does not harm the long-term success of the brand, but it does require close cooperation with brand marketing.

Understanding both marketing approaches helps to resolve the conflict within marketing, to break down silos and to work together on successful marketing strategy.

For this however, performance marketing must be integrated as part of an overarching, long-term strategy together with brand marketing.

The best strategy will differ depending on the brand and company and on market developments or unforeseeable events such as the coronavirus pandemic.

That means repeatedly questioning and optimising strategies to secure the long-term success of your own company and brand.

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