"We excel at performance marketing, but our brand is lacking. Performance marketing rules our budget, and brand narrative has slipped away."
The CEO of a tech company voiced these concerns during a discussion. Her concerns are far from unique. Across industries, marketers are grappling with the overshadowing presence of performance marketing, squeezing out brand-building. Companies face the formidable challenge of balancing the long-term vision of brand building with the short-term demands of performance marketing. Amid and post-pandemic, the focus and budget shifted from brand investment to performance marketing. From brand to activation. From gauging brand equity to bottom-funnel metrics. From long-term strategies to short-term tactics.
?While these choices may appear sensible during economic uncertainty, it's vital to grasp their long-term impact. Neglecting long-term brand building means a brand will fade from people's minds and hearts, opening doors for competitors to take its place.
However, companies don't need to sacrifice their brands' future for short-term gains.
I have led a combined brand, communications, and marketing function for over a decade and, hence, have had a front-row seat to the strategic relationship between brand building and performance marketing. Brand Building and Performance marketing are, in fact, complementary, not competitive.
Brand Building Meets Performance Marketing, a Powerful Fusion?
Here are a few ways brand and performance complement each other.
- Trust and Recognition Fuel Performance. A strong brand helps performance marketing efforts immensely. Customers are likelier to click on an ad, engage with a website, or purchase if they recognize and trust the brand. For instance, a user scrolling through their LinkedIn and Facebook feed is more likely to click on an ad from a brand they know, thanks to previous exposure to its messaging and image.
- Performance Data Informs Brand Decisions. Performance marketing generates a wealth of data and insights about customer behavior. Intelligent marketers leverage this data to refine their brand-building efforts. For instance, an e-commerce business can use performance data to identify which product categories resonate most with their audience, informing their long-term branding strategy.
- Measurable Outcomes Validate Brand Investments. Performance marketing provides clear metrics and ROI, which can justify brand-building investment. When a company sees a direct link between their branding efforts and increased conversions, they are more likely to allocate resources to strengthen their brand further.
Finding the Right Balance
Finding the right balance between brand building and performance marketing is the challenge. Allocate too much to one at the expense of the other, and your marketing efforts will falter. Here's how to strike that balance:
- Elevate Brand Success with Metrics. Start with brand positioning, encompassing purpose, emotional attributes, functional benefits, and experiential qualities. Connect this to activation levers using structural equations modeling
(SEM) for comprehensive measurement. Adobe combines brand and performance metrics, evaluating brand awareness, equity, and customer lifetime value alongside performance metrics like click-through rates and ROI.
- Power of Composite Brand Metrics. Brand equity is quantifiable through familiarity, regard, meaning, and uniqueness. Combine these into a precise composite measure, refreshing it to account for competitive moves and other variables. The Likert Scale
offers options for precise weighting.
- Performance Marketing Meets Brand Equity. Align performance marketing with brand-growth strategies and monitor its impact on brand equity. Analyze how campaigns affect your brand's strength.
- Brand Equity's Financial Impact. Measure brand-equity growth's financial influence on revenue, shareholder value, and ROI to ensure it's a driver of real financial success. Investopedia
offers ways to quantify a brand's financial outcome. The Harris Poll EquiTrend Brand Equity
Index shows how Home Depot and Lowe's compete based on their brand equity, driving revenues.
?Ensure Performance Marketing Accountability for the Brand
?Let's explore how performance marketers can transition into collaborative brand-building partners instead of competitors.
- Align Performance Marketing with Brand Strategy. Sync performance marketing with the brand's growth strategy, ensuring both teams focus on the same priorities for the same audience. Brand-friendly performance marketing yields superior returns compared to traditional ROI measurements.
- Accurate ROI Assessment in Performance Marketing. Traditional performance metrics may need to pay more attention to brand impact and long-term value, leading to misleading results. Measuring each campaign's impact on brand equity, revenue, and shareholder value aligns performance marketing with brand goals and yields higher returns.
?Hence, a brand-focused approach should be used to measure the impact of each performance-marketing campaign on brand equity, revenue, and shareholder value—brand-aligned performance marketing yields significantly higher returns than conventional ROI metrics suggest.
Future-proof your brand by a combination of short-term and long-term strategies.
- Reject the Short-term/Long-term Trade-off Fallacy. Don't see performance marketing and brand building as a trade-off—both impact short-term revenue and long-term value. Finding balance means achieving more of both, not less of one for more of the other.
- Brand Building Is Measurable: Brand building can be as financially measurable as performance marketing. Establish brand KPIs linked to financial performance to hold responsible parties accountable.
- Measuring the Right Metrics: Commonly used performance marketing metrics may misrepresent performance marketing results. Use a brand-focused approach that aligns brand building and performance marketing with a single metric for brand equity, connecting it to short-term and long-term financial goals.
Today, the imperative is evident: uniting brand building and performance marketing isn't optional – it's essential. This fusion forges a self-reinforcing loop, where a robust brand propels performance marketing, and marketing achievements fortify the brand. Those adept at combining both secure immediate gains and establish a bedrock for enduring success in an ever-changing market.
