Brand Marketing Outperforms Performance Marketing 80% of the Time

Brand marketing is an absolutely essential part of any marketing mix. Channelling budget away from brand marketing and messaging to performance marketing and messaging will negatively impact both the short and long-term success of your business.

Performance marketing, with its perception of easily tracked results, is appealing and reflects a broader instinct to focus on immediate, short-term results. During difficult economic conditions, this is amplified by an even stronger need than usual to identify and quantify whatever impact can be provided immediately. However, by its nature, performance marketing has only a very short-term effect which is almost always over-emphasised and overstated. Metrics such as last click and simplistic attribution models, usually used to measure the outcome of performance marketing, are very binary tools that don’t take the impact of other marketing and non-marketing factors into account. In fact, the concept of incrementality isn’t factored in at all in these cases.

Instead, there’s a common assumption that any increase in clicks or search during a performance marketing campaign reflects simple cause and effect, encouraging marketers to celebrate performance marketing as a sales driver.

The reality is very different. Our research shows that 30% of paid search for example is driven by, and directly attributable to, other forms of brand and upper funnel marketing, with another 30-60% driven by non-marketing factors such as seasonality, loyalty, or category trends. This means that last click and simplistic attribution metrics overstate the role of clickable activities by 2-10x, on average, and understate the role of non-clickable or non-user-level activities (e.g. video) by just as much or more.

Which means spikes in clicks and conversions may be the result of specific performance marketing campaigns, but these are impacting the timing of a purchase, not the core decision-making and have much less of an incremental effect on a brand’s success. Correlation between performance marketing and purchase may be high, but it is in fact other factors that are driving the commitment to purchase.

A recent example of the impact of increased brand spend

Outperforming 80% of the time in terms of sales and ROI, brand marketing is hugely powerful. What makes it so effective? It’s the consummate high-achieving multi-tasker – a good brand campaign is multi-pronged, driving greater new customer acquisition and stronger sustained behaviors. Most notably, it works across products and services and leads customers to purchase or onboard products or services they may not otherwise have chosen (or searched for, or be retargeted from).

It does this by enhancing the awareness, visibility and desirability of brands. Brand marketing’s strength is in communicating what the brand stands for, and when executed well, creates emotional engagement that initiates a relationship with the customer of loyalty, connection and advocacy, ultimately changing behavior – search activity, word of mouth, consideration and, finally, conversion. As a result, brands that reduce their investment in brand marketing see an overall reduction in marketing ROI across all metrics.

A recent example of the impact of reduced brand spend

Brand marketing tends to be focused on upper funnel tactics and channels (vs performance marketing which tends to be focused more on lower funnel tactics), making it more difficult to measure. But, across customer types, geographies and market conditions, upper funnel tactics are 60% more effective over the long term than lower funnel tactics and only 25% less effective in the short term. The key is really to leverage both to balance success this week, this month and beyond by delivering stronger repeat purchase and sustained behaviors that are built from a position of strength.

The long term impact of short termism

Between 2020-2022, the impact of brand marketing and its outperformance vs performance marketing remained consistent, notwithstanding the challenging market environment. In fact, brand marketing performs consistently higher than performance marketing, with digital tactics naturally performing well and also benefiting from increased consumer demand as a result of brand investment.

How some brands are adjusting their spend