Brand and performance marketing have historically been divided, but the pandemic and the growth of social media and ecommerce are encouraging new combinations
High-end perfumes and dog food don’t have much in common. However, they’re both benefiting from a new dawn in the historically divided worlds of brand and performance marketing.
If you’ve ever received a perfume sample in the post from beauty group L’Oréal or a hand gel from Unilever then you’re playing a part in this evolution, according to Jonny Grubin, founder and chief executive of product sampling platform SoPost. Something similar is happening at Mars Petcare and its new direct-to-consumer pet food brand James Wellbeloved.
Such campaigns help garner valuable and measurable data around the buying intent and demographics of potential new customers. Beyond this, they’re also building brand awareness.
“Getting a physical product sample to somebody helps drive performance by capturing data that can be fed into customer relationship management and other marketing activities,” Grubin explains. “But the sample also gives marketers the opportunity to improve brand engagement through the packaging, ‘how to use’ guides or sustainability messaging. It’s not just a message of buy, buy, buy; it’s a friendlier and softer approach.”
At Mars Petcare, the company’s brand and performance marketing teams have joined up to test different branding and images to drive the best customer conversion rate. This led to a reduction in cost per acquisition of 57%, according to a recent Marketing Week report.
Jordan James of Unlockd Marketing is not surprised by the result. He says when the brand and performance marketing disciplines combine, the effect can be exponential.
Performance marketing means campaigns that lead to a specific customer action like a lead, click or sale. In brand marketing, longer-term campaigns aim to boost recognition and reputation. While a combination of both sounds like a fairly obvious approach, historically they have been strangers.
Performance marketing works best when the consumer already has some knowledge of the business and its brand meaning, making them more prepared to buy, James says. This means less expense, a shorter time from ad spend to sale and a higher return on investment.
“It’s important to ensure that both activities align with each other for the best effect,” he adds. “You want potential consumers to recognise the branding from the basics such as logo, colours and tone of voice, to the more complex, such as purpose and values.”
The distance between the two disciplines is largely due to a cultural divide, with brand marketing considered more art than science and performance marketing more science than art. They tend to be conducted by different individuals and teams with different priorities and focuses.
Performance can be seen by brand marketers as analytical, cold and gritty: the pursuit of cost-per-click, customer acquisition cost and return on investment (ROI). Performance marketers, meanwhile, might see their counterparts as rigid, touchy-feely and too focused on the big picture.
“It can be a tall order to get them to meet in the middle and create a complementing campaign,” James says.
This divide has been deepened by the arrival of media platforms like Google and Facebook, which offer better targeting, tracking and measuring tools: perfect for performance marketing. It’s shiny and new and has attracted not just big brands but startups, perhaps backed by private equity or venture capital and eager to quickly grow sales and customer numbers.
“Everyone recognises that brand marketing is critically important. You might drive one sale with performance campaigns, but I would question the long-term value of that customer,” says Grubin. “The problem is that you can put a lot of money into brand marketing, but it is hard to measure its effectiveness. It’s like putting your finger up into the air and hoping for the best. With performance marketing it is easier to show it is working, that your invested dollar has turned into dollar ‘x’ in revenue.”
However, Grubin thinks the tide is turning, with the brand side regaining ground. One example of this, he says, is that many of those business-to-consumer (B2C) startups that grew off the back of performance marketing now realise that sustainable growth means looking more closely at brand marketing.
“They didn’t used to bother with brand building, they just sat back and watched the dollars from sales come in,” he says. “But customers now want more, which means if these companies want to become bigger, they need to focus on brand and service.”
More established companies are also reviving brand marketing. One example is hosting platform Airbnb, which decided in 2019 to reduce its marketing spend through search engines to focus on brand building.
Chief executive Brian Chesky has said Airbnb now looks at marketing’s role as one of “education”, not “to buy customers”. It launched a brand campaign called ‘Made Possible By Hosts’ in 2021, which the company says boosted website traffic by 20% in the fourth quarter of 2021.
New Apple operating restrictions around data privacy and tracking may also have led a shift to brand marketing. James says the pandemic has been another factor, with consumers eager for more “tactile, fuzzy-feeling” marketing.
Major brick-and-mortar retailers switching to ecommerce and direct-to-consumer services during lockdown have also upped their brand marketing, though they also relied more heavily on performance marketing online.
Despite the growing emphasis on brand, examples of major firms combining brand and performance marketing teams like Mars Petcare are thin on the ground to date.
“It’s all very nascent but it is happening. Performance marketers are increasingly seeing the value of brand marketing,” says Tom Roach, vice president of brand planning at digital consultancy Jellyfish.
He thinks platforms like Google and YouTube will be the key hunting ground for such combinations. “Whether you want to build your brand with someone so they think of you in the future, want to nudge someone who’s in the market now towards buying your brand, or need to connect your brand with someone who already knows they want it, the platforms have more influence on consumers than ever before. They are all on there,” he says. “The platforms are both sales drivers and brand builders for your marketing strategy.”
In the future, Roach expects to see more automated integration of brand building and sales activation in campaigns.
“When you click on something to trigger a sale in a search ad, it will have brand assets baked into it. These will include copy and graphics more aligned to the brand voice,” he says.
This will be enabled by brand marketers creating content that feels native to these platforms. Their work will be supported by their own use of Google and Instagram in their leisure time as consumers.
Michael Lorenzos is head of performance and growth at digital bank Silverbird. He says it will still be necessary to retrain both brand and performance marketers to move away from the current silo mentality. Marketers on both sides should be made accountable for the same metrics when launching campaigns.
“Don’t stress trying to work out if conversions were from brand or performance. Realise that performance is just another way of delivering the brand message,” he says. “Put your marketing plan on a single page and define priorities for every quarter. Also encourage synergies between the brand marketers and performance marketers and reward them for actually delivering on those synergies.”
For example, both disciplines could share key performance indicators (KPIs) around click-through rates and impressions in a combined campaign. Performance marketers could also be rewarded for highlighting new customers to brand marketers.
“Customers buy on trust and if they see a brand wrapped around a performance ad, they will be more likely to make the purchase,” he says. “These two different belief systems may finally be coming together.”