The long and the short of it
The "right" balance between brand advertising and performance marketing isn't a fixed formula. Considerations around the sector, market size, competition, existing brand equity, and commercial goals must be factored in to make the right choice when allocating budgets.
It's important to note that both are crucial for driving commercial success; however, they serve different objectives, and timelines are a key factor and consideration.
At a high level, they serve different objectives and are measured in different ways.
Brand advertising
Goals: Focus on building brand value and equity and fostering long-term brand awareness, recognition, trust, and customer loyalty.
Metrics: Measured through brand awareness surveys, brand sentiment analysis, net promoter scores (NPS), and customer lifetime value (CLTV). These metrics all show longer-term impacts and are used to benchmark progress over time.
Time horizon: Primarily focused on long-term growth and building brand equity over time.
Performance marketing
Goals: Driven by immediate, measurable results like leads, sales, and return on investment (ROI). It's about acquiring customers and driving revenue efficiently in the short term.
Metrics: Key performance indicators (KPIs) include click-through rates (CTR), conversion rates, cost per acquisition (CPA), return on ad spend (ROAS), and lead generation volume.
Time horizon: Focuses on short-term gains and optimising campaigns for immediate results.
How do you evaluate the right mix for your business?
Numerous reports and research indicate a 60/40 split toward brand and performance marketing, but taking this approach as gospel is fundamentally flawed.
In some scenarios, especially for early-stage businesses, an 80 /20 mix might be more appropriate. This is usually due to budget restrictions and the need to get an immediate return on investment for cash flow purposes. Performance marketing can often be the gateway to funding brand-building activities for SME businesses over time.
The answer is that each situation is unique, so be cautious with guidelines or following popular opinion. What's not debatable is that integrating activity aligned to specific commercial KPIs is the key to success, and activity can be shaped to reflect the age and stage of any organisation.
Measurement is key
Brand building and performance marketing integration are critical for long-term commercial success. It is key for business owners, Managers, and decision makers to highlight what success looks like and how it is measured.
For brand: Link brand performance with financial KPIs like increased customer lifetime value, increased market share, loyalty, and premium pricing advantages, etc.,
For performance marketing: Link performance marketing to an immediate return on ad spend, cost per lead, and acquisition numbers.
Ultimately, measuring success needs to be aligned with the goals and objectives agreed upon from the outset. Channel planning and budget allocation should be fluid and actively managed over time.
The long and the short of it is you need to plan out your goals, find a marketing partner to undertake market research and develop a strategy that aligns with your budget, timelines, and expectations.
