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Branding vs. Performance Marketing: The Ultimate Guide

Most companies have two primary goals with their marketing activities – building brand awareness and generating sales. Brand marketing and performance marketing represent different approaches to achieving these goals.

While both are important for business growth, it’s crucial to understand the key differences to develop an effective overall marketing strategy.

Fast definition – what’s the difference?

Brand marketing builds awareness and emotional connections over time through broad messaging and brand exposure. Performance marketing drives immediate and measurable actions like sales through targeted, tactical campaigns. Brand marketing shapes perception, while performance marketing optimises conversion.

Here’s a working example:

Coca-Cola’s heartwarming holiday ads aim to build emotional connections and remind people of fond memories with friends and family. This brand marketing creates long-term affinity. Conversely, an email coupon for £1 off your next Coke targets existing customers to immediately drive sales. This performance marketing incentivises a purchase and tracks ROI.

What marketers think about branding vs. performance marketing

A report by Deloitte published in 2020 reveals a disconnect between what marketers believe and how they invest in marketing budgets.

Marketers recognise the importance of brand awareness campaigns for long-term equity, yet they focus on driving immediate purchases and conversions.

The study examined marketing approaches across 6 lifestyle categories – CPG, retail, fashion, beauty, auto, finance/tech/business. Key themes were the importance of brand values, trust, quality content, and cultural relevance.

The report found:

  • Departments are hyper-focused on ROI and short-term results, driven by pressure on CMOs to deliver tangible results quickly.
  • Marketing departments rely too heavily on performance marketing, which can lead to undifferentiated products, overemphasis on price, and risk to future revenues as brand equity diminishes.
  • Media partners that produce trusted, high-quality content can help bridge the gap between a brand’s message and consumers’ emotional response. The cultural relevance of content is critical.
  • To balance brand building and sales, marketers must quantify their brand value, rethink metrics beyond ROI, explore new tactics beyond traditional ads, and strategically choose media partners.

Simply put, branding and performance marketing are both essentials in marketing strategies that target the short and long term.

What is brand marketing? It’s all about affinity.

Brand marketing aims to create positive brand associations and an emotional connection with potential customers. It utilises messaging and imagery to shape audience perceptions of a company and establish its brand identity. Examples include TV commercials, print ads, and social media video/trend campaigns.

The focus of brand marketing is on influencing attitudes towards a brand. Rather than asking customers to act, these campaigns move customers down the sales funnel, which can ultimately lead to sales and conversions.

What is performance marketing? It’s all about conversions.

Performance marketing is all about driving specific actions and conversions. The primary objective is to acquire new leads and customers to achieve direct sales. Performance marketing leverages targeted ads, search ads, and other direct response tactics to attract those already interested in purchasing.

Rather than brand building, the emphasis is on generating quantifiable results and tracking straightforward returns on investment from marketing activities. This is all about optimising the bottom of the sales funnel, where action and conversions rule.

Brand marketing in more detail

Brand marketing shapes audience perceptions and establishes positive brand associations over time. Rather than pushing for immediate sales, brand marketing aims to build awareness, affinity, and loyalty among target customers.

A prime example is Proctor & Gamble’s Olympics sponsorship ad campaign focused on “Proud Sponsors of Moms.” By tying P&G’s brand to empowering mothers, the ad created an emotional connection beyond just promoting products.

Brand marketing often utilises broad-reach media like TV, radio and print to influence brand perception. Tactics focus on storytelling and highlighting brand values versus product attributes. The goal is establishing brand affinity, so customers want to buy a brand based on emotional factors like shared values.

Apple exemplifies using brand marketing to build loyalty beyond price. By associating itself with innovation and disruption, Apple has created devotees who will pay more for their products. Over 90% of iPhone users plan to stay loyal to Apple for their next phone, and this brand stickiness comes from marketing that emphasises Apple’s brand identity.

While more challenging to quantify, brand marketing lays the foundation for long-term business growth. Tracking brand perception, affinity, and awareness over time is crucial to optimise brand-building campaigns. Marketers must identify which messaging best resonates with target audiences to differentiate their brand.

Consistent brand marketing strengthens positioning in customers’ minds, leading to enduring competitive advantage and sales in the future.

Types of brand marketing

There are several key types of brand marketing, each with distinct goals and strategies:

Personal branding

Personal branding creates an identity for an individual or business to be easily recognised. Distinctive logos, names, and slogans differentiate from competitors. For businesses, personal branding establishes a human connection with consumers.

Service branding

Service branding develops an identity for a service offering. This involves naming the service, creating a logo and tagline, and advertising the unique features. Service branding can build loyalty by distinguishing a service in the marketplace.

Product branding

Product branding gives a product a unique identity through branding elements like names, logos, and packaging – ideal for e-commerce. It differentiates from competitors and makes the product more memorable.

Cultural branding

Cultural branding aligns a brand with specific values, traditions, or subcultures to resonate with a target audience. Partnerships, sponsorships, and other cultural associations help form an emotional bond between the brand and consumers.

Retail branding

Retail branding promotes products and services through in-store displays, signage, demos, and other elements. The goal is to engage customers at the POS.

Online branding

Online branding involves an engaging website, social media, content creation, and other digital promotions like logos and images.

Offline branding

Offline branding uses traditional marketing like TV, radio, newspapers and magazines, flyers, packaging, and hoardings.

Corporate branding

Corporate branding leverages a company’s visual identity across all marketing. The goal is to differentiate from competitors and increase brand recognition and loyalty.

Each branding type has unique aims, but together, they create a cohesive strategy to shape brand perception and drive revenue growth.

Tracking metric for brand marketing

When measuring the success of brand-building initiatives, there are several key metrics to measure:

  • Brand Preference: The number of consumers who prefer your brand over competitors.
  • Brand Loyalty: How likely consumers are to repurchase or choose other products from your brand.
  • Brand Awareness: How easily consumers recognise your brand when prompted (aided) or unprompted (unaided).
  • Brand Recall: How easily consumers can recall your brand from memory.
  • Brand Experience & Associations: Emotions, experiences and associations consumers have with your brand. This includes brand warmth, momentum, and other associations.
  • Brand Usage: How often consumers use your products.
  • Brand Purchases: What consumers last purchased from your brand.

Tracking these metrics over time provides insight into the impact of brand marketing efforts and how brand perception is evolving.

How to get the most from brand marketing

First and foremost, clearly define your brand identity and values from the outset. Tesla provides an excellent example of establishing a strong brand built around innovation, sustainability, and luxury right from the beginning. This premium positioning attracts high-value target customers seeking those brand values.

Another key is to consistently communicate your brand messaging across channels and touchpoints. PepsiCo aligns their fun, energetic, youthful branding in all marketing, from TV commercials to social media engagement to major events sponsorships. Maintaining cohesive messaging strengthens recognition of what your brand represents.

Leveraging emotional storytelling and making connections is also vital for impactful brand marketing. Tesla’s advertisements highlight how their vehicles enable exciting experiences, quality time with loved ones, and a feeling of a bigger mission.

Social media influencers can also organically highlight your brand. Pepsi has partnered with top musicians, athletes, and pop culture icons to seamlessly integrate their branding into content audiences are engaging with. This cultivates a cool factor and popularity.

Interacting directly with your audience across digital platforms shows commitment to your brand community. Tesla and Pepsi foster loyal, vocal followings online through social media engagement, high-quality content, and listening to feedback.

Finally, measuring metrics like brand awareness, perception, and equity over time provides insights to optimise messaging. Surveys, brand studies, and market research allow you to monitor your brand’s health and double down on what resonates.

Performance marketing in more detail

Performance marketing is focused on driving immediate, quantifiable actions and conversions versus shaping long-term perception. Key players include retailers/merchants, affiliates/publishers, and ad networks like Google PPC.

Retailers or merchants look to boost sales and acquire customers by partnering with affiliate publishers and ad networks that promote their products and services.

Publishers like influencers and bloggers act as marketing extensions of the brand, using their platform and audience to enhance performance. Affiliate networks facilitate these partnerships through tracking tools and payment processing. Affiliate managers oversee the relationships between merchants and publishers to optimise results.

Performance marketing offers trackable ROI in software; every action can be measured against KPIs. Pay per sale, pay per lead, pay per click, and pay per download are standard payment models based on conversions.

For instance, you can easily track PPC ROI.

The main benefits of performance marketing are increased brand exposure through publisher reach, transparent and measurable results to optimise spending and lower risk since payment is based on performance.

Marketers can track metrics like cost per acquisition, conversion rate, click-through rate, impressions, and lifetime customer value to gauge impact.

Testing and optimising for KPIs is critical to improve results over time. A firm offer and landing page help convert visitors, so marketers must audit user experience and update underperforming pages.

Performance marketing works best for those with an established online presence and proven conversion rates. Driving real-time sales and ROI in a trackable way is the central focus – basically, anything that generates revenue.

Types of performance marketing

We can categorise performance marketing campaigns based on their expected results and goals. There are two main types – action-based and goal-based campaigns.

  • Action-based campaigns reward customers for taking specific actions like clicking, signing up, or purchasing. The advertiser pays out based on the completion of the predefined action. Goal-based campaigns aim to achieve a set target, such as generating leads.
  • Within these categories, there are three types of activities performance marketing incentivises:

    • Acquisition campaigns attract new customers through paid search, banner ads, and social media. The focus is driving new leads and customer sign-ups.
    • Engagement campaigns encourage existing customers to interact more with the brand. Email, social media, and content marketing maintain mindshare.
    • Conversion campaigns motivate leads to convert into paying customers. For example, affiliate marketing and retargeting ads persuade visitors to complete transactions.

The distribution channel used also delineates performance marketing types. Paid search and affiliate marketing drive website actions. Social media marketing builds engagement on social platforms. Email marketing targets existing subscriber lists. Knowing your goals and channels helps select the optimal performance marketing strategies.

Tracking metrics for brand marketing

  • Cost Per Acquisition (CPA) – The cost to acquire a new customer through a conversion.
  • Return on Ad Spend (ROAS) – Revenue generated per pound spent.
  • Click-Through Rate (CTR) – The ratio of ad clicks to impressions.
  • Conversion Rate – The percentage of visitors that convert into customers.
  • Lifetime Value (LTV) – Total revenue generated from a customer over time.
  • Customer Acquisition Cost (CAC) – Acquiring a new customer.
  • Sales Volume – Total sales revenue driven by the campaign.
  • Lead Volume – Number of leads generated.
  • Bounce Rate – Percentage of visitors that leave the site after one page.
  • Page Views – Number of page views per visitor.
  • Time on Site – How long visitors engage with the site.
  • Repurchase Rate – Frequency at which existing customers make repeat purchases.
  • Referral Traffic – Volume of visitors referred from publishers.
  • Social Media Engagement – Likes, shares, and comments driven by the campaign.

Note that bounce rate, page views, and time on site are website metrics – we can use these to gauge the performance of ads by traffic type.  

How to get the most from performance marketing

Clearly define your target audience and what actions you want them to take. Performance marketing is about driving specific, measurable actions, so you need to know your goals, whether conversions, leads, or sales.

Second, optimise your website for conversions. Your landing page experience is crucial for converting visitors into customers. Ensure your pages load quickly, provide clear messaging, have easy calls-to-action, and are mobile-friendly

Additionally, continually A/B test elements on your site. Test headlines, images, copy, calls-to-action, page layouts, and more to determine what resonates best with your audience. Tracking engagement metrics helps refine conversion rate optimisation.

Furthermore, use compelling and benefit-focused creative across channels. Your ads and content should highlight the tangible value your products or services offer consumers. Speak directly to their needs and interests.

You also need to effectively target your campaigns to reach high-intent audiences. Performance marketing success depends on reaching users ready to act. Leverage tools for audience insights and demographic, interest, and search targeting.

Finally, have clear tracking and metrics in place to monitor performance. Obsess over your data to understand your ROI and optimise spend towards campaigns, channels, and partners driving real impact.

Following these best practices will enable you to serve relevant messaging to the right audiences and drive conversions across your performance marketing initiatives. Remember – focusing on measurable actions is critical for generating sales and growth.

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