Navigate the Now with Brand Performance Marketing
As marketers and advertisers, we are constantly on the lookout for ways to efficiently generate the demand needed for conversions to ultimately drive revenue. This endless search is the lynchpin of all we do. But there is no surefire way of consistently achieving that goal. That is why it is incumbent upon marketers to read both market and customer signals and adjust our plans accordingly to ultimately reach business goals. This is the way marketers across industries operate today despite the advertising industry’s metamorphosis over the last 30 years.
How did we get here?
Before we jump into the now, let’s take a step back in time to illustrate how we got here. Up until the late 80s — which we’ll call the pre-internet era of mass reach — advertisers were focused on reaching as many people as possible at the top of the funnel using the channels at hand: TV, radio, print, and out-of-home. Our job was to drive brand discovery and build brand awareness (until it was “top-of-mind awareness”), which then led to consideration, purchase, preference, brand loyalty, repurchase, and long-term customer value. Everything marketers did was focused on the top of the funnel because that is where we had the most control. If there was a performance or activation element, it still came in the form of mass reach tactics like direct mail or direct response television (DRTV).
When the World Wide Web became publicly available in 1991, marketers and advertisers found new opportunities to drive conversions quicker and more efficiently than ever before. And the digital land rush was on! Marketers saw the immensely lucrative opportunity to shift from top-of-funnel tactics to focus solely on performance channels and conversions. Why? The rationale was clear: why invest in awareness tactics when you could instead invest money in media to make money? The age of mass reach was replaced with the age of channel dominance, all at the bottom of the funnel. And since then, it has been an amazingly profitable ride.
Now, after a long and successful period of rapid and efficient conversions, marketers are waking up to the long-term, negative consequences of neglecting brand awareness and focusing solely on performance. Logically, it was bound to happen; it was only a matter of when the stagnation would occur. A period when rapid growth would slow as brands optimized themselves out of effectiveness by converting all the available demand. A period when it would become harder to keep pace as demand slowly exhausted and performance metrics started to decline. When the top of the funnel dries up without support, conversions get more difficult to sustain, and the cost of marginal conversions continues to climb.
A pending shift in the landscape
A turning point in advertising and marketing is upon us. Not only are marketers reaching a point of tension between brand and performance efforts, but we’re also dealing with a consumer landscape like never before due to the personal, social, political, and economic changes over the past few years. This has resulted in a seismic shift in the marketplace and a growing evolution toward a consumer-focused, holistic approach.
However: while brands are trying to put the customer first, consumer expectations are changing rapidly as many have come to expect brands to effortlessly meet their changing needs. Their priorities and needs continue to shift because of an upended world and continued disruption, which means marketers are stuck in an endless loop of mismanaged expectations. At the same time, we are also in the midst of economic uncertainty, living through an inflationary marketplace with the fear of recession looming in a world of amplified disruption. With all this disruption, the old rules don’t apply anymore.
So, how do marketers maintain agility and relevance in the marketplace to not just survive, but thrive?
The benefits of brand performance marketing
With a laser focus on the bottom of the funnel, many advertisers have forgotten a fundamental marketing truth: no one buys something unless they are familiar with your brand. In today’s day and age, knowing who you are as a brand isn’t enough anymore. It’s table stakes. Consumers want and need to trust your brand. They need to see themselves in your brand, and understand you are empathetic to their lives and are here to help. Consumers want brands to serve them and their needs, not the other way around. A new approach is required, one that builds positive brand perception by reaching a larger audience through a full-funnel approach, rather than through a bottom of the funnel, channel-dominant strategy alone.
A treasure trove of empirical data is now available that underscores (1) the benefits brands can reap when balancing brand and performance marketing efforts and (2) how this strategy continually builds brand demand for the future. In fact, with patience and dedication, this approach drives higher conversion outcomes than a performance (channel dominant) strategy alone. The strategy is called brand performance marketing. At its core, brand performance marketing balances the media equation between branding and activation. In Les Binet and Peter Field’s The Long and the Short of it: Balancing Short and Long-Term Marketing Strategies, they denote that a brand performance marketing strategy is about:
- Leveraging awareness channels (building brand equity and future demand)
- Alongside performance channels (reaping short-term conversion)
- And using both emotional and empathetic creative messaging to build positive brand connections that influence purchase behavior
Here’s the thing: this isn’t anything groundbreaking. Brand performance marketing is simply about rebalancing the advertising scale to meet consumers where they are in their journey. The key to success is using the right data to guide the process. The data you’re looking for?
- Data that allow marketers to be consumer-first
- Data that help define your existing customer base and provide details on how to effectively reach them
- Data that help marketers not only fuel brand discovery or optimize media plans, but that allow marketers to be channel neutral to meet consumers where they are seeking out content
How to get started
Brand performance marketing is not a silver bullet for advertising ills. There are a number of factors to consider before launching a brand performance marketing strategy:
- Align on goals and objectives. A conversation about how committed your organization is to this strategy and gaining buy-in from all key decision makers is a critical starting point. It takes time, effort, and patience to see the effects of adding brand-building messaging, especially if efforts to date have been exclusively focused on the lower funnel. In fact, effective branding over the long term may show no effects at all in the short term as it simply takes time to reach the awareness tipping point. But what have you got to lose? If you don’t act now to add branding to your performance mix, where will your brand sit when demand is exhausted and sales begin to fall? An investment will inevitably be made. Navigating the now means reading the signs and building for the future by implementing brand performance marketing. But it also means having patience to reap the benefits of filling the upper funnel and generating future demand as brand building takes time (think two or more years).
- Set key performance indicators (KPIs) and measurement benchmarks. There is a correlation between awareness metrics and performance outcomes. Measuring both will help marketers understand where media is driving value and adjust accordingly. Jeremy Miller, author of Sticky Branding, suggests that one way of assessing the effectiveness of brand performance marketing is through measuring the “The 3V’s of Brand Performance:” (1) volume: demand for your products and services, (2) velocity: the speed that a customer travels through the buying process, and (3) value: the ability to sell at a premium and avoid discounting. These “3V’s” can translate into clear, tangible business results for marketers via revenue, profit, and sustainability.
- Keep tabs on your competition. Understanding your brand’s competitive set and where it ranks in the marketplace is as important as understanding the price of purchased media. This will help level-set how aggressive your brand must be to effectively compete. Keeping tabs on the competition helps answer core questions (i.e., what is their investment level, awareness/performance mix, and share of voice? Are there areas of opportunity you can take advantage of?) that, in turn, will illuminate a clearer picture of what the brand is up against.
- Analyze media investment level to ensure all channels are funded appropriately. Don’t simply shift media dollars from performance to awareness channels for the sake of balancing the media mix. No matter the channel approach taken, due diligence is required to determine how to properly fund each channel. Overfunding channels is so rare that it’s not worth worrying about, but underfunding channels — and therefore wasting precious dollars on media that cannot perform well — is the biggest risk. It’s also incredibly rampant: Nielsen reviewed more than 150,000 media plans and found that over 50% of channels were underfunded. Finding the correct balance takes time, diligence, patience, and most of all, data. It’s essential to not only plan appropriate media levels to achieve short-term goals, but also to continue testing and measuring ongoing performance to optimize the media mix and ensure channels are funded appropriately in the long term.
- Examine the balance between your brand and performance media. Experts Les Binet and Peter Fields suggest the ideal balance is a 60/40 awareness/performance mix. If that is out of the question from a budgetary perspective, begin testing awareness channels in conjunction with performance channels and adjust your mix according to your business category. Remember: by adding awareness channels to balance a media mix, the goal is to be simultaneously focused on reaching a qualified audience as well as a larger pool of people who look similar to the target.
- Leverage empathetic and emotional messaging. Research shows that empathetic or emotional messaging creates stronger, longer lasting associated beliefs about a brand than rational messaging. Not only that, but this type of messaging grows stronger over time, enhancing the salability of the brand.
- Test, measure, and optimize. This mantra should be on repeat when marketers begin rebalancing their brand and performance media efforts. We know that only 36% of channels deliver for both revenue and brand metrics (Nielsen Marketing Mix). This means that assigning the right KPI to the right channel is essential to understand success and set appropriate performance expectations; for example, don’t assume an awareness channel will drive leads and then declare it a failure when it doesn’t deliver. Instead, implement specific tests and measurement methodologies to understand how various parts of your media plan contribute — both individually and together — to brand and sales metrics. Then, use that data to make the necessary adjustments to reap the short-term conversion rewards while building long-term demand and amplified performance results. Ignoring the opportunity to test, measure, and optimize is detrimental to the success of a brand performance marketing strategy.
What does this all mean?
In the world of marketing, the pace of change and disruption is doing everything but slowing down. This means we have three choices: we can shut down, we can continue with the status quo until we have no choice but to change, or we can take the opportunity to adjust now and work toward sustainable long-term success. And we are squarely in camp three. While there’s no silver bullet — no singular tactical solution or universal media plan — that will overcome today’s marketing challenges, embracing the change and stepping into a brand performance marketing strategy now will help marketers stay one step ahead.