The Balancing Act: Performance & Brand Marketing

In a world where performance marketing often steals the spotlight (and the budget), we can forget how important branding really is. 

But here’s the kicker: without a strong brand, performance marketing can end up being background noise. As marketers zero in on immediate revenue and measurable results, it’s crucial to remember that brand marketing is the bedrock of long-term success.

Let’s take Apple, for example. Their consistent brand messaging keeps them at the top of the game, even when lower-priced options come knocking. It’s not just about driving sales—this strong brand presence creates a loyal fanbase that genuinely connects with their values. Talk about winning hearts and minds.

Airbnb really showcases smart marketing in action as well. Over the past couple of years, they’ve honed in on brand marketing, while also fine-tuning their performance marketing to balance supply and demand like pros. This strategic pivot has paid off big time, with a 25% bump in bookings and a 29% rise in revenue year-over-year. Their renewed focus on branding helps them better educate users about exciting new features and services, boosting overall engagement. With this revamped strategy, Airbnb is set up for serious growth.

How Performance Marketing Took Centre Stage

When TV, out-of-home, print, and radio dominated advertising channels, creating a message that not only commanded attention but also inspired action was a driving force. Companies and agencies with deep pockets invested in compelling campaigns to stand out against their competition.

With the evolution of the internet and new digital channels—email, social media, blogs, and more—a shift began. Advertising budgets became fragmented, trying to accommodate these new channels, and goals shifted from the creativity of the message to where and how it was delivered.

Eventually, tracking individual sales instead of GRPs became the north star for teams to attribute their spending and impact to the bottom line. Eventually, this led many marketing departments to prioritize quick wins, pushing performance to the forefront while brand storytelling took a backseat.

Fast forward to today, and we’re seeing marketing budgets shifting to a 60:40 split in favour of performance marketing tactics, with some eCommerce brands favouring performance even higher at around 80:20. In a digital landscape ruled by giants like Google and Facebook, brands are competing fiercely for attention, but costs are climbing while returns seem to be slipping. With consumers bombarded by ads every day, it’s more important than ever for brands to have a clear identity and message to stand out. Re-enter brand marketing.

What’s The Difference?

Let’s level set. Performance marketing is focused on conversion-based results—think clicks, leads, and sales. It’s a tactic where you pay only when you achieve a specific action.

Brand marketing is about crafting a unique identity and connecting with customers emotionally through storytelling. Think of it as sharing your brand’s story and values at every turn, making your audience feel like they’re part of something special. When you deliver a thoughtfully crafted and memorable experience, you build trust and loyalty, keeping those customers returning for more.

While trust and loyalty are nowhere near as immediately measurable as clicks, they lay the groundwork for long-term success.

Why Make The Case For Both?

So, with finance teams and VPs of marketing loving the ability to attribute performance to marketing, how do we ensure that teams treat brand marketing as a co-pilot rather than a passenger?

Let’s chat about customer inertia—essentially, it’s the tendency to stick with what you know. It’s that cozy habit of buying a product or service without giving it much thought. While performance marketing grabs the attention of those actively shopping, many consumers are perfectly happy with their usual choices and aren’t in a headspace to be distracted by the attention grabbers. This is where branding gently nudges these folks out of their comfort zones and into your brand’s embrace.

From studies Sensible Marketer has seen in telecommunications and other industries, typically 70%-80%  of the market is inert. They don’t see a reason to switch from a competitor or need one heck of a reason to do so. Often, with conversion-based performance marketing, we’re tapping into the 20-30% that is actively at play. So we’re missing out on 70% of the opportunity.

With brand marketing, marketers are trying to create a bigger pool of clients, awakening them (so to speak) to something better. They’re not actively looking for a solution as they don’t recognize a problem with what they have. That’s where brand marketing comes in, to sway them to new opportunities.

Marketing In A Fragmented, AI Era

As new channels pop up and AI commands attention, the focus on creative, compelling messaging will continue to matter, perhaps even more so than ever before! Strong branding allows companies to stand out as things get noisier.

So, what’s the takeaway? 

It’s not about choosing between performance and brand marketing; it’s about finding the sweet spot between both. Sometimes, the balance will shift slightly, but remember that short-term growth needs long-term efforts to continue driving a healthy pipeline.

Sensible Marketer is a full-service marketing agency with experience growing your business or organization using brand and performance marketing. Contact us for a FREE consult today to help get your programs started or evaluate the ones you have running.

Sources

https://www.warc.com/content/feed/brand-marketing-pays-off-for-airbnb/en-GB/7437