Dear Growth Hackers

Dear growth hackers,

Let’s make up and be friends.

Back in 2009 Jeff Bezos famously said: "Advertising is the price you pay for having an unremarkable product or service." It was in the hey days of programmatic advertising when every marketeer was intoxicated by the easiness of measuring CPC, CTR, CPA, ROAS and a lot of other tongue-twisting acronyms.?

The year after – in 2010 – the term “growth hacker” was coined by the entrepreneur Sean Ellis as a smarter and faster way to get customers than relying on advertising spend.?

Since then, there has been a divide in the world of marketing. A divide between the performance marketing mindset and the brand marketing mindset. And somewhere down the road we even started to believe that these different mindsets are incompatible. That you must choose a side.

The funny thing is, even though the two different mindsets represent two different approaches to marketing and target each their end of the customer funnel, it’s still the same funnel. Simply speaking, you need both.?

If you only work lower funnel, even if you’re the best of the best efficiently converting all available market demand with your smart tactics, at some point that demand is going to be exhausted and performance metrics will decline.?

Eventually you will need upper funnel activities to help accelerate growth and build a higher business performance growth ceiling over time. In essence, you need to build future demand, not only convert existing demand.?

Mark Ritson calls performance marketing “picking the fruit” and brand marketing “watering the tree”. You know you need to do both to maximize yield over time.??

That’s exactly what Binet & Field proved through the research published in “The Long and the Short of It” (2013). One of their main conclusions is that over time (on average after six months), brand investment becomes the primary growth driver. What they’re not saying is that it’s either-or. It’s both-and. And the 60/40 split is a good starting point for how to divide your investments.??

A recent study by LinkedIn highlighted that combining brand and acquisition investments increases conversion rates substantially (6X) vs. acquisition investment alone. But on top of that it also builds additional business equities for businesses beyond just short-term sales. Including pricing power and talent acquisition.?

As you might know, Jeff Bezos has since changed his mind about brand advertising, and today, Amazon is one of the?largest spenders?among U.S. advertisers.

In much the same way,?Adidas changed their marketing strategy a couple of years ago, stating that they had been over-investing in?performance and digital at the expense of brand building. One of the interesting findings from their internal analyses was that brand activity drove 65% of sales across wholesale, retail, and ecommerce.?

Converting existing demand and creating future demand are both critical to sustained growth. They’re compatible and should happen concurrently. But they require different marketing approaches and different skillsets – which often mean different people.

So, come on growth hackers. Let’s be friends. After all, we want the same thing: Business impact.

And a big thanks to Scott Symonds, Deanna Ho and Chad Hudson for being friends, nerding out with me on this topic, and making me smarter.?