Performance marketing vs Brand marketing

At the beginning of March 2021, Airbnb, announced a shift in its marketing strategy.

The shift was from Performance marketing to Brand marketing.

This move piqued the interests of many marketers, and many are monitoring the effects of this decision. Before delving deeper into the topic, let us first understand what the key deliverables of both forms of marketing are.

What is Performance Marketing? Performance marketing completely changed the way companies advertise and sell products. It has also impacted the way we measure the success of marketing campaigns: in the past, attribution was nearly impossible. While one of the key objectives of performance marketing is to drive sales, this form of marketing also brings about other benefits:

  • It is measurable and trackable
  • It is cheaper and you pay for results only: e.g. leads, conversions
  • ROI (Return on Investment) focussed

What is Brand Marketing? Brand marketing or branding focusses on communicating about the brand itself. The ultimate goal of brand marketing is to build a brand that is memorable and recognisable for its benefits and values. Some of the benefits are:

  • Building a loyal customer base that trusts your brand
  • These loyal customers are always eager to try your new products and innovations
  • They become high lifetime value customers and make repeated purchases
  • You can have product differentiation vs your competitors and even command a price premium
  • Build intangible benefits like goodwill

Understanding the overlap between the Performance and Brand Marketing. As marketers, we are all busy creating branding and performance marketing strategies with the most popular digital practices like keyword trends, out beating the most effective marketing efforts within the industry and competition. However, conversions will always be lower if the consumer is not connected to “YOUR” brand. Therefore, as marketers, we need to understand, plan, adapt and optimise the marketing strategy to never lose this “connection” with your consumers. We need to know when to make the shift between branding and performance marketing.

Going forward in 2021, marketers have a window of time to reassess how consumers will be engaging with brands, because as lockdown measures ease, borders reopen, economies recover and we move towards “a new normal”, new consumer habits are being formed and consumers can be persuaded to adopt those new habits. To reach the consumers, marketers can utilise the vast array of digital touchpoints. These touchpoints can be used across the consumer funnel and across both performance and brand marketing.

Now coming back to our case study of Airbnb. Given the current special circumstances, Airbnb’s decision might not come off as a surprise. The pandemic has resulted in travel restrictions and social distancing measures, which severely disrupted people’s lifestyles of travelling and interacting with the locals. For a platform that relies exactly on these lifestyles, the services offered have become expendables – something consumers have reduced their spending in. Since performance marketing drives traffic from prospecting consumers, to stay in the game Airbnb adapted, and has shifted spends and resources into building and strengthening its brand, so when travel becomes the norm again, it will benefit from a strong brand and that people will recognise it and this in turn will bring in more customers, on top of any potential performance marketing activities.

The most important question is still unanswered: what should you do for your brands? It depends on a variety of factors:

  • It depends on your industry/category/competition
  • The prevailing socio-economic scenario
  • The marketing and sales objectives
  • Marketing budgets

Once a marketer and its partner agency have this knowledge and understand where the brand in the consumer journey funnel is, they can create a marketing strategy to grow sales and the brand.

At JOLT Digital we assess what your marketing needs are: do you need more of brand marketing or performance marketing, or an equal amount of both?

We do not base our recommendations on just the knowledge we have gathered from our client and business partners, but do it scientifically with our proprietary technology, J-CAL.

  1. The starting point of J-CAL is it considers the current status of a brand in terms of the marketing stage it is in re: brand building or performance driven.
  2. We then classify the brand status as either a Leader, Challenger, or Newcomer. After establishing where the brand is, the key campaign parameters such as the country where the campaign is taking place, the category of brand, the channels chosen, and the overall budget are given as inputs.
  3. The tool then provides the media planner with an allocation of budgets across relevant digital channels as an output. It then predicts the ROAS (Return on Advertising Spend) for our client which is aligned to their marketing goals of performance or brand building.

This tool is greatly assisting digital media planners like myself at JOLT Digital, in making a more informed decision by putting science into media planning. We understand in these tighter times every buck of our clients’ digital marketing investment needs to work harder, perform, bring results, and grow the brand both in the short and long term. With this game-changing tool, we strive to help our clients in making the shift and realignment between performance marketing and brand marketing, moving forward in the post-COVID world.

Wanqing Yu
Digital Executive at JOLT Digital

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