When performance marketing agendas and brand marketing goals compete inside an organization, it can result in wasted ad budgets, lost sales opportunities, and demotivated industry professionals.
Both disciplines are vital, but as a marketing executive, how do you solve it… especially when today’s environment is putting pressure on shorter-term results?
Here are 10 Tips to Help Marketers Solve the Brand and Performance Equation in a COVID-19 World.
1 . Understand the promise of each discipline
Chances are you already understand one much better than the other.
Performance marketing is immediate, quantitative, modern, and efficient. Brand marketing is high minded, creative, long term, and value-creating.
They differ fundamentally on their deliverable: short term sales or longer-term profitability.
If your career in marketing is grounded in one of those camps, you may not have the same respect for – or trust in – the other. It’s hard to have a strong command of both, and there are too few people who do, which is why it causes so much friction.
Les Binet, the industry’s surrogate patriarchal figure of advertising effectiveness has said, “You can’t achieve long term growth by piling short term results on top of each other”. He’s written books that prove this with empirical data. Although he is arguing for the pendulum to swing back toward longer-term thinking, the point is they do very different things.
2 . Set expectations that make sense
A common issue emerges when performance marketing principles are applied to brand-level problems. (For example, attempting a brand repositioning among a narrowly defined, purchase-ready audience and ignoring the larger market the brand competes in).
The result is unrealistic expectations of certainty and immediacy. If a marketing tactic can’t deliver those, “then why are we even doing this?” is the response. Arguably, this is the most negative impact digital marketing has had on branding.
The flow-on of this is an artificially constrained media mix because it favors tactics with the best tracking and measurement, shielding brand exposure away from people who are perhaps not in the market today but who will be in the market tomorrow (and unless your category is in trouble, there are far more of the latter). It’s perilous because performance marketing narrowly targets the hotter prospects only, and is rewarded on action, not on widening appeal for the brand.
This environment has no appetite for breakthrough marketing tactics because by definition those things have no precedent, no benchmark, and usually no room for repetition or iteration. (You only get one shot at “This is a Tide ad”).
Among the many innovations from Silicon Valley is the software engineer or financial expert who inherits the marketing responsibilities. Since startups are not marketing-led organizations the way Coca-Cola, P&G, or Diageo are, marketing is at risk of being viewed as another algorithm to fail fast and re-generate. Acquiring customers becomes confused with building the brand. This skews toward short-term thinking and instills a ceiling on growth defined by the lowest-hanging fruit.
3. Avoid stepping on toes
In a different organization you might find brand marketers fumbling performance marketing.
Overlaying tried-and-tested awareness and consideration tactics on conversion tactics can hold back performance marketing. Like hiring a cinematographer for a Tik Tok video.
It hinders the rapid learning and short-term sales response that performance marketing offers, either by slowing down the process from days to months, water-logging hardworking ad copy with emotional narratives, not fully embracing the need for the multiplicity of iterations in order to effectively optimize, or by using media channels in a way that doesn’t play to their strengths.
The outcome is low performing performance marketing. Not good either.
4. Pay attention to brand and category maturity
A key variable in solving this is when.
When does it make sense to compete for those ready to buy, and when does it make sense to plant seeds for the future? And when should the balance shift?
Brand and category maturity play a role in this, specifically, how well ‘trained’ customers are in buying within your category, how easily brands come to mind for this kind of purchase, and how well your brand, in particular, is understood and favored. The answers to these will change the dynamics of your marketing.
5. Category leaders should use their advantage
Leaders have an advantage in any category because of their greater distribution and top of mind awareness. If people are buying your brand on autopilot, and you’re easy to find, you’re golden.
Brands that are fortunate enough to be in this position can ease up on performance marketing because consumers don’t reconsider brand choice at every purchase occasion.
6. Emerging brands should use performance marketing to generate a brand budget
The fledgling brands have different concerns.
Marketing fights more desperately for a share of the operating budget. The idea of investing in something intangible that likely pays off in the longer term is either bold or reckless when you’re just trying to make it through the next quarter.
For the startups with close to zero consumer understanding about what they sell, prioritizing manifestos and founder stories is extravagant and usually not a good idea. Being too high-minded, too soon, among too few people won’t drive enough business.
For as long as new customers can be won at an acceptable acquisition cost, it makes sense continuing to do so, until the business is big enough that marketing’s share of revenue leaves enough room to invest in the brand as well.
7. Mid-tier brands need to be awesome on both fronts
Let’s say you compete in a market that is considered ‘established’. Maybe you’re Wendy’s. Or Lyft. Or Reebok.
Reebok’s great comeback doesn’t rest on people who are buying sneakers today. The lower-funnel won’t solve that problem. They have a lot of work to do to regain cultural relevance and brand preference so they can gain share and eventually charge higher prices.
At the same time, sneakers are a $76 billion category in the US (source to Statista), so there’s a huge market to tap every day to keep the lights on.
In this situation, clearly, both disciplines are essential, but due to the challenges they face, they need executing with a huge measure of expertise. The middle is a hard place to be.
8. Be wary of generic benchmarks by factoring in your own situation
While rules-of-thumb are dangerously lazy in marketing, a good place to start based on empirical data is to allocate 60% of your marketing budget to support the brand and 40% to support conversion.
Or, for every dollar spent on generating a sale today, $1.50 is spent on future sales, which will also generate some sales today.
Importantly, one should note that this does change depending on the product category, along with other factors. Travel, for example, can skew more toward brand, because desire is key, and consumers are experienced at navigating the lower funnel.
Benchmarks are a helpful starting point more than they write the playbook. They merely represent averages, not outstanding performers.
9. Keep ambition alive, while you’re doing the other things
For the marketers and CEOs with enough ambition or flair, betting on ideas that find fame is a proven way to accelerate down the path of growth. It’s a circuit breaker from CPMs and incremental awareness points and it should remain an ambition.
Dollar Shave Club did it, Go Daddy did it, so did Cards Against Humanity, Swimsuits for All, and Everlane in their own ways.
Of course, finding fame takes skill and creativity, and getting there can make as many people uncomfortable in an organization as it inspires, but it’s the kind of marketing with limitless possibility.
10. Ensure marketing’s focus is fluid over time
Like many things today we’ve abandoned the middle ground. Marketing is somewhat of a belief system but arguing for the predictable and quantifiable every time is as risky as arguing for craftsmanship to solve every problem.
Orthodoxy, dogmatism, and myopia work against the competitive advantage that marketing is supposed to offer. The marketer you need to be is the perpetual student of marketing, not the professor – a shapeshifter, not a monument.