Feb 2018

With the recent changes to Facebook’s algorithm and the platform essentially becoming a pay-to-play environment for marketers, the age of question how branding vs performance marketing has been a highly heated discussion among not only my clients but others in the digital industry once again. Here are my thoughts on the subject.

In the world of marketing, be it digital or traditional, the 2 largest groups of people you would find are either “Bob”, the performance marketers who believes results speak for themselves, or “Larry”, the marketers who builds entire campaigns around branding.

The main difference between branding and performance marketing is simple. Branding is focused on who you are, and marketing is about how you build awareness.

In more practical terms, branding is all about the strategy that Larry has put in place to ensure that people know the brand while marketing are the tactical goals and campaigns which Bob has planned to ensure that the targets are met.

To ensure that everyone is on the same page, here are the benefits of branding and performance marketing:

3 Advantages of Strong Branding:

  • Customer Recognition
    Having a strong recognition among consumers means that whenever a potential consumer is looking to purchase a product or service, they recall that the brand is one of the main players in the industry.
    Studies by Nielsen have shown that 60% of consumers are more like to buy a new product from a familiar brand rather than switching to a new brand.

  • Premium Pricing Advantage
    Numerous studies have shown that well recognized brands are able to charge significantly higher than other providers of the same product or services.
    A recent example of this is when Burberry announced in November 2017, that they would be increasing the pricing of their brand to make it more exclusive. This strategy has work for other brands like Apple, Rolex as it changes that iPhone or watch from a product into a status symbol.

  • Employee Recruitment & Retention
    As most brands are aware, getting to the 1st place in any industry or market is easier than staying there. To do so, brand need to attract the brightest talents in their fields and brand recognition helps in this process.
    Studies by Career Arc have shown that 75% of job seekers consider an employer’s brand before even applying for the job. Other studies by LinkedIn have also found that brands with strong recognition have 5X the number of applicants for each of their position and have a 28% lower turnaround when compared to a weaker brand.

3 Advantages of Performance Marketing:

  • Measurable Results
    The main difference between traditional marketing and performance marketing is the emphasis the latter places on measurable results, be it a click, generation of a lead or the completion of a sale.
    This emphasis on the ability to measure results also gives certainty to performance marketers on which aspects of their campaign had the largest impact, allowing the brand to make the changes necessary based on data.

  • Improved ROI
    As it is data-driven, performance marketer are able to look at key performance indicators and derive from the various metrics, what are the actions required to produce the desired results.
    This means that they are able to commit more resources into the performing campaigns much faster thanks to the constant influx of data, thus improving the ROI.
  • Scalability
    The main differentiator between performance marketing and branding boils down to its ability to scale. The focus on producing results at scale has the benefit of convincing stakeholder to invest in newer initiatives and marketing campaigns without having to make enormous budget commitments.
    As branding generally tends to be a large-scale exercise which requires enormous budgets, Coca-Cola spent $1billion in alone 2016 on media spending and brand-building initiatives, it is much harder for most brands to engage in full-fledged branding campaigns on an annual basis.

The truth of the matter is that marketers need to eliminate this difference if the brands which they are working for, is to continue growing in this digital age.

Many of us have come across brand-heavy websites which are gorgeous but nearly impossible to use. By the same coin, there are plenty of performance-focused websites which undermine the position of the brand by using terms such as “cheap” and “discounted” when the brand is supposed to be 1 that offers premium products or services.

Even if we were to ignore the serious cost of a single school of though dominating a brand, are we as marketers willing to allow the brands which we represent to be disrupted just because we keep missing opportunities that comes from striking a balance between branding and performance?

If you are keen in finding the balance for your brand, here are some areas which I would suggest you should consider first:

  • Better Communication Between Branding & Marketing Teams
    Even though branding-focused teams have been using marketing channels to accomplish their goals, in today’s landscape, marketers need to understand that the communication channels are no longer go in a single direction.

    This means that consumers have to be presented with a single front and receive a consistent message from the brand. In practical terms, promotions and branding messages needs to be planned in a manner which does not confuse the consumer and maximizes the retention rate.

  • Having A Common Benchmark For Assessment
    Regardless if you are focused on branding or performance, if your brand does not get into a consumer’s consideration set, it is impossible to grow the market share. This is especially true for brand in competitive categories such as automobiles and luxury goods which have a long sales cycle.

    The issue for most companies is that there are no common benchmark to determine if a campaign worked. Being overly focused on value-proposition in such a market could backfire as it takes away prestige and status the brand represents.

    Great campaigns are only possible when the brand spends the time to determine the metrics and key performance indicators for the brand as a whole rather than approaching it on a campaign basis. Not only does this reduce the conflict between the 2 older approaches, it also allows for the brand to justify investment of crucial branding dollars.

  • Slow Is Smooth, Smooth Is Fast
    The phrase above has its origins in the military community and the context that is that moving fast is reckless and could be potentially fatal. While some may take offence that the message justifies that is okay to be slow, that is not the real message that it is trying to convey.

    What this saying is trying to ingrain into the listener is simple, one needs to slow down so as to allow the proper development and understanding of the skill which they are trying to acquire. Only when one has a full understanding, can the most efficient result be produced.

    This is especially true in today’s environment where digital marketing has essentially multiplied the markets in which brands have access to. The danger here for any marketer is to succumb to the pressure of producing results and ending up with a partial understanding of what digital marketing can do, thus limiting the results that they are able to produce in the longer run.

While I am by training, a performance-focused digital marketer, I am able to understand the importance that branding has on the marketing activities. It frustrates me to no end that such clear distinctions are being drawn at a time by large brands when an integrated approach is required to ensure that the brand continues to stay relevant in an age when words “industry is being disrupted” is heard at practically every forum and discussion.

The honest answer is that while there is no simple solution to find that ideal balance between performance and branding activities, it is possible to do so through the following steps:

  • Determine what constitutes as success for them
  • Define the actions required to achieve that success
  • Identify the skills required to take those actions
  • Ensure that the team is equipped with those skills
  • Evaluate the results produced
  • Repeat it consistently

The real question is are we willing to do so and ensure that we stay relevant! 

Terrence Quah