Not so long ago, this was called digital marketing. Now, it's performance marketing. It has its place and, when done well, can be very seductive. You give money to Google. Boom, you got sales.
Performance marketing also makes it easier to tie your marketing spend to outcomes. This route to market is compelling; you can prove that the marketing team is a revenue generator rather than being seen as a budget drain. It promotes you from the fluffy drawing department to a lead gen powerhouse.
But all this is wrapped around a key phrase: "In theory". Going all-in on performance marketing will take a toll on the business. The cornerstone of performance marketing is that it tries to align the customer's intent with your offering. This means that you need to be at the right place (usually Google) at the right time. Over indexing in performance misses out on a vital part of growing your business; brand building. Brand building means that you're not just selling now but building a relationship with your future customers.
Let's be clear about what we mean by "relationship"; it's one of those overused terms in the world of brand. The definition of relationship here is not to place a brand at the same level as your partner, parents, or children. The relationship we're talking about here is more akin to knowing a great plumber (all my examples have to do with plumbers). When you have a problem, when the water's pishing all over your kitchen, you know who to call—that plumber's knowledgeable, reliable, quick and at a fair price; it's a relationship of convenience and trust.
Building this awareness is where brand building comes into its own. It reaches out to those who may not be in-market right now for your service, but you can start to prove yourself to be helpful so that when this large group of people are ready, they're coming to you first.
It can be hard to balance performance and brand building-even for experts. But it's worth the effort because each has its strengths to offer your company. So, where to start?
Where you start depends on the lifecycle of your business or product. If you're a new start, it may be that you're spending more money on performance to gain some traction. You need to make sure that you can afford your growth, so sales matter. Brand building may focus on the post-sales experience. How can you be useful after sales to help influence the next sale?
A slightly more mature business will use the customer advocacy created in the early stage to introduce new customers into the brand. Understanding how your brand has helped your customers persuade those new to you to try you.
I could go on all day about ways to build the brand, push your values to the fore, and help grow your business more sustainably than just using performance techniques. It's a balance; one should complement the other. A strong brand helps build the perceived value of what you're selling. Performance marketing can get it in front of people when they need it.
We get the next question: how should you split your resources to accommodate brand and performance? Again, this will depend on a case-by-case basis. Startups? Look at performance to start building up sales and as you mature, shift more and more into promoting your brand over time. If there is such a thing as conventional wisdom in this space, you're looking at a 60/40 budget split in performance to brand.
We rarely see companies use that split. The pressure to get sales, and the ability to get an almost instant dopamine hit on your activity, make performance marketing addictive. The challenge for supporting budget allocation to brand marketing is that it's seen as being difficult to measure. We've got some ways to look at the impact.
From a topline point of view, we think you should look at:
- Coverage from key target titles and inﬂuencers/direct traffic
- Direct Trafﬁc
- Brand searches
- Site sessions via brand channels
- Engagement metrics for content & community
The other metric to keep an eye on, and one that can be a good trend indicator month on month, is looking at your Share of Search metrics. We've written about Share of Search before and still find it an exciting metric that is ideally suited for measuring brand performance online.
Over time, and it will take time, investing in your brand marketing will help make your performance marketing more effective. The time it takes to convert can be reduced as you've already done the intro to your brand and the benefits of working with you much earlier in the funnel. It all adds up.
Everyone loves a bit of performance. And it is undoubtedly an important component of marketing your brand. But it ends up costing you the ability to use your brand as a lever to increase market share or increase your margins. If you're a commodity product business, pure-play performance marketing may well be what you need. Balancing your performance marketing activity with long-term brand building for other companies will produce outsized results. It's not going to happen overnight, but it will have an impact over time.