It’s easy to assume that all marketing strategies are alike. After all, you market and promote your products and services to build awareness and revenue, regardless of the strategies used.
However, there are a few ways to break these strategies down into specific types and categories. Performance marketing, as an example, focuses on tangible, short-term outcomes. It is increasingly popular, with 45% of marketers believing that it is growing in importance.
On the other hand, brand marketing focuses more on building awareness and buyer loyalty. Many companies focus on this strategy to drive up long-term custom – after all, up to 91% of consumers first click on brands they know when researching products.
WHAT IS PERFORMANCE MARKETING?
Performance marketing is all about investing in results. It involves using paid advertising and outreach for a specific outcome, with companies paying a certain amount per click/impression (paid search, paid social, affiliates, etc.) or publishing content, building partnerships, etc, all of which typically have the end goal of increasing sales/leads.
Performance marketing strategies are tangible compared to brand marketing strategies because you pay for a specific return on investment (ROI).
Popular performance marketing channels include:
- Pay-per-click advertising (PPC) – Google Ads, Microsoft Ads,
- Paid social media marketing – Meta/IG, TikTok
- Affiliate marketing – Awin, Clickbank
- Search engine marketing (SEM) – SEO/Organic
- Native advertising – Taboola, AdRoll
Many marketers focus on performance strategies because they are measurable and therefore easy to adjust over time. In fact, in the UK, search advertising spend alone grew to around £13bn in 2022
WHAT IS BRAND MARKETING?
Brand marketing is about investing money to build brand awareness, customer loyalty and long-term buying relationships.
Brand marketers focus on selling the whole brand, rather than individual services or goods. These are used to prove a brand’s worth and create a memorable identity for the business.
To that end, brand marketing is about investing in often intangible results and building up company value over a long period of time.
Popular brand marketing channels include:
- Influencer marketing (intrinsically linked to performance marketing, born from brand)
- Connected TV advertising (CTV)
- Out-of-home advertising (OOH)
- Radio advertising
- Email marketing (sits on the fence of performance and brand)
It’s easy for some companies to be tempted to focus on performance strategies because they drive tangible results. However, brand awareness drives future success and is not designed to drive instant results.
The majority of marketers agree that brand marketing is crucial. A LiveRamp and Censuswide survey found that 58% of professionals believe brand awareness to be the most important metric to focus on when advertising a business, a topic which has blown up in 2024 amidst the rising cost of acquiring new customers through paid channels.
WHY IS IT IMPORTANT TO BALANCE BOTH?
For a healthy return on marketing investment over time, balancing performance and brand marketing can help you to build a holistic approach to advertising your services, products and the wider company.
Although it’s tempting to invest heavily in performance marketing for immediate revenue, these types of returns can slowly diminish over time, meaning that you need a failsafe to keep awareness and engagement rolling into your business.
What’s more, paid media costs are increasing. According to a 2022 Insider report, the year-on-year cost per thousand (CPM) impressions on Meta platforms increased by 61%. This means that companies typically need to put more money into these campaigns to see results.
Keep in mind that performance marketing is also becoming increasingly saturated, and competition for ad space could lead to the strategy losing its effectiveness over time.
Beyond this, if you invest solely in a PPC campaign, for example, there’s no guarantee that those ad clicks will immediately result in paying customers. It’s essential that your business builds up organic traffic and interest simultaneously, both to counteract the money being paid into performance-related strategies, but also to ensure longer term success.
THE NECESSITY FOR LONG-TERM STRATEGY?
Building awareness through brand marketing can help businesses to grow, so there’s no need to rely on funnelling money solely into performance-based campaigns.
Statistics show that long-term branding strategies such as content marketing can offer an impressive return, with >40% of marketers measuring the success of their content strategy using sales and 50% planning on increasing their investment this year.
At the same time, it’s never wise to focus purely on brand marketing, especially if you’re running a growing company with limited capital to spend on long-term results.
Striking a healthy funding balance means that you get the best of both worlds – immediate, measurable engagement on one hand and long-term, slow-burn awareness and organic growth on the other.
HOW TO BUDGET BETWEEN PERFORMANCE AND BRAND MARKETING?
There are various schools of thought on effectively balancing your budget between performance and brand marketing strategies. Marketing experts Les Binet and Peter Field famously suggest splitting 60:40 – 60% on long-term branding and 40% on short-term ‘activation’.
However, in recent years, Binet has claimed that there’s some elasticity to the rule. In particular, he suggests that ‘premium’ brands (i.e., those aiming for a higher-paying consumer base) could pivot to a 70:30 model for long-term success.
Crucially, the way that you split the budget between performance and brand marketing depends largely on where you are in your business lifecycle.
For example, spending more on performance marketing in your formative years for a strong, initial boost is wise, before leaning more towards brand marketing as your company matures.
That way, as your company grows, you can focus more on funding passive engagement as it becomes easier to build awareness – and there’s less need to pay for instant gratification.
SUMMARY
Overall, there’s a growing reliance on brand marketing worldwide, particularly as economies remain unstable and buying behaviours continue to evolve.
However, you shouldn’t count out performance marketing completely. Up to 84% of brand and marketers report that PPC alone drives very strong results for their businesses/clients.
What’s more, performance marketing drives measurable ROI that stimulates immediate growth. It’s important to strike a balance between these two types of strategy for quick hits and long-term burns, or else you risk a feast-and-famine situation.
If you’re just starting out, consider leaning more into performance marketing first and, over the next few years, starting to pivot the other way. And, of course, it always pays to have digital marketing experts on your side.
