Brand Marketing vs Performance Marketing

Large corporations like Apple, Nike, McDonald’s and State Farm plow millions and millions of dollars every year into brand marketing to keep their company’s name top-of-mind, purely to prevent mindshare loss.

But ROI-driven performance marketers sometimes scoff at all the wasted spend on brand marketing, calling it unmeasureable. Smart arbitragers could make millions with direct response ads on Google, Meta, and even chum-bucket Taboola and Outbrain ads – and still do well in certain niche markets.

Brand vs Performance: Which is better?

Ask leading marketers which is better and they’ll tell you there is no right answer, it all depends on the context, situation, and goals of the company at that moment in time. Just like Google can tweak some ads settings to push their margin up a % for the quarter, it does look like performance advertising is more measureable in the short-run. But smart, experienced marketers know the best way to build long-term brand value is by investing in brand.

In fact, Sean Griffey of IndustryDive built his entire career off of performance marketing + media, but he acknowledges the importance of brand. IndustryDive is a premium subscription newsletter for certain industries, and is perhaps the best example of the power of newsletters and direct marketing, so that’s a strong recommendation coming from someone with his experience level:

He’s countering the note in The Rebooting newsletter about how performance marketers are doing a better job working their way up into the brand budgets, going up the funnel, than the other way around:

“I’ve long tracked the shift to performance marketing from top-of-the-funnel activities. This reminds me of covering advertising agencies when the brand agencies doing TV ads were the bee’s knees while the direct marketing shops were backwaters. That shifted, and agencies specializing in direct performance marketing ended up moving up into the brand work more successfully than vice versa.”

And that’s in reference to this, but perhaps the Taboola CEO is just talking up his performance-oriented chum bucket ads: “There is no more room for let’s spend and hope for the best. Let’s get a bottle of wine over dinner and do some RFP. Those days are just gone. You’re seeing advertisers of both sizes, you’re seeing teams dedicated to understand and measure value of spend.”

Where this is probably going is just a continuous evolution and understanding of the digital ads market and reality.

We’ve seen an evolution the last few years with retailers offering paid search ads on their platforms, with Amazon making a killing and dominating other ecommerce retailers. I’ve even seen ads in grocery store mobile order apps, which in a way is just a digital evolution of brands paying for placement in grocery store endcaps.

Future platforms like AR/VR platforms from Meta and Apple (and maybe Midjourney) will definitely change the conversation again in the next few years.

Can you Measure Brand Marketing?

According to Evan Lee, “branding is 100% measurable”:

Getting off the glucose drip of pure performance

If performance ads are performing, it makes a lot of sense to keep them going. However, smart CEOs and CMOs know they need to review their portfolio of channel strategies on an ongoing basis and allocate budget to the right buckets at the right time.

As we’ve seen over the last 10-20 years, a new platform can have very cheap ads that perform well for awhile – like $0.05 AdWords clicks in the early days, or cheap scalable Facebook ads. But as the word gets out and the corporate budgets get approved after a few years of proven performance by the platform, that’s when ad costs start to rise.

At some point in the life of an advertiser, they will need to diversify from the channel that has had such high ROI for so long. The law of shitty clickthroughs means all marketers ruin everything and will eventually find out.

So the options are:

• Constantly jump over to the latest and cheapest platform
• Start investing in brand, more and more, and use that to lower your performance customer acquisition costs, thus establishing a moat

Pairing Performance Channels with Owned Channels

Email marketing is often touted as having the highest ROI mainly because it’s an owned channel. They are leads, subscribers, and customers in your own orbit.

The play for those who are cranking on any performance channels is to capture that customer email address, and continue the relationship from there. In highly transactional areas, like lead generation for insurance, mortgage, financial services or personal injury law firm or other time-bound short-term but high value transactions, then yes, the majority of the value is found in the instantaneous transaction and then the contractual lock-in for 1-30 years.

But for those brands looking to solve problems for their customers, they should be incentivized to build that relationship with the customer over time. With the proliferation of advertising and offers everywhere all the time, customers have become ad-blind to traditional ads. You need to cover all the channels, get in front of them 70 times, and have 7 hours of content for them to consume.

The Zero Moment of Truth of them taking the first action is just the beginning.

More Questions to Answer Next Time

• Which industries do brand marketing the most
• Which industries do performance marketing the most
• How do you measure each
• How do you know the right time in the cycle to invest in each channel, and when should you stop