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Performance advertising or brand advertising. What’s most important?

A question that comes up a lot in conversations with clients is whether performance marketing or brand marketing is more important. If only the answer were straightforward, but here’s our take on it.

Why does performance marketing work?

Performance marketing has grown exponentially over the past 15 years. Today it accounts for a large proportion of the £16.5bn digital ad spend in the UK.

There are excellent reasons for this too. When combined with robust analytics, the accountability of data-driven digital advertising provides a clear insight into the performance of the advertising activity. Every pound spent can be tracked and monitored, following a customer’s journey from the very first digital impression through to purchase and beyond. With that level of detailed insight, every stage of the journey can be optimised such as the type of ad served, the most efficient time of day, the most effective colour for call-to-action buttons, and even the highest converting payment method.

The level of transparency and accountability it brings is not only loved by marketing professionals but also the c-suite and business-owning cheque payers, that rightly demand to see a return on every pound spent. Something that more traditional advertising has often fallen short of doing.

With endless targeting opportunities, particularly those offered by social media platforms such as Facebook, the rise of programmatic campaigns and attribution modelling, why would advertisers want to use any other form of messaging?

Saturation point?

There is evidence that we are beginning to reach a saturation point regarding the number of messages an individual is exposed to every day. Back in 2007, it was 5,000; today it could be as many as 10,000. That’s a lot of noise to cut through. Particularly when you are often limited to a few lines of text at worse, or more often than not, a display ad that’s no bigger than a postage stamp when viewed on a mobile device. Not much room for creativity or depth of messaging there. However, it’s a challenge performance advertising doesn’t have to face in isolation.

Brand advertising

The other side of the equation is brand advertising. The world of Madmen, TV campaigns and big budgets. Despite the mass awareness and social currency of the biggest campaigns, the criticism always levelled at this type of advertising was around performance measurement. Yes, there were tracking studies, econometric modelling and research, but the direct link between every pound spent and the return it delivered was often difficult to prove. Even more so with smaller budgets in niche media, they type more commonly used by B2B advertisers.  

The wariness around brand advertising continued to be evident during the pandemic, with the redeployment of spend to digital performance- led platforms, as cautious finance directors protected budgets by spending in the channels that delivered a short-term return. 

But as we reach a potential saturation point with performance marketing, perhaps brand marketing can work alongside, rather than lead, the messaging created.

A recent example of the power of brands is the increasing importance to consumers of brand purpose. Research from Deloitte Digital carried out in June 2020 found that one in five UK consumers has stopped using a brand due to their response to COVID-19, rising to 28% of those aged 16-24.

It’s not just covid driving this movement; brands that can prove their sustainability, environmental and diversity credentials are actively sought by consumers. Particularly as these concerns are under so much media scrutiny.  

Evolution of brand building

Another opportunity for brand advertising is the increasing options available to build a brand. The financial barriers have been removed, enabling brands to be built in many different ways. For example, it could be via a content-led strategy. Often used in the tech sector by brands such as HubSpot, content strategies build brands through SEO and domain authority.

Another relatively recent option is the influencer led strategy. Leveraging the power of influencers as their core tactic has enabled GymShark to build a brand worth over £1billon. Not bad for a company that started in a garage in Worcestershire less than ten years ago.

TV, the most significant brand builder of them all, is now available to advertisers armed with even the most modest budgets through addressable platforms like Sky’s Adsmart. To your target audience, you’ll be seen to be rubbing shoulders with the world’s biggest brands. But access to this platform only requiring a fraction of the spend. An attractive proposition not just for B2C challenger brands, but also B2B brands.

With these opportunities available, brand building messaging is well within the reach of most enterprises. Combined with performance advertising it provides a powerful tool-kit for businesses to use to communicate their brand attributes and then convert sales through performance advertising channels.

Full funnel

McKinsey have even created a term “Full Funnel” to describe how organisations should be approaching their advertising messaging with this combined strategy. The key recommendations from their report focus on the whole journey for the consumer. This takes the focus away on the bottom end of the sales funnel championed by performance advertising and requires an “understanding how each of the stages impacts the others for a complete customer experience”.

It needs a co-ordinated approach, an overarching strategy, measurement to track performance and a test to learn philosophy. That in itself could be a massive challenge to any business, let alone creating the communications pieces that deliver the right message at the right time to the right audience.

What’s right for your business?

So, when a client or prospect asks what is more important, we are confident enough to say neither. However, for your advertising to work, you can’t have one without the other, and a combined campaign will increase the ROI of your activity. Obviously, not all businesses are the same, and many already have elements of brand and performance in their mix. However, it’s clear there is a vital role for both, and the benefits of getting it right will deliver the maximum return. Need some advice on how to approach your “Full Funnel” strategy? Contact us here.



Posted on: 3 June, 2021 | UnderBranding, Marketing |