In today’s fast-paced digital world, marketers often face the temptation, or even pressure, to prioritize short-term gains over long-term strategy. Performance marketing, with its promise of measurable results and quick returns, can overshadow the less tangible, long-term benefits of brand marketing. However, striking the right balance between these two approaches is not just beneficial; it’s critical for sustainable business growth.
Understanding Performance Marketing
Performance marketing focuses on driving immediate actions such as clicks, leads, or sales. With clear metrics like cost per acquisition (CPA), return on ad spend (ROAS), and click-through rates (CTR), this approach is data-driven and ROI-focused.
It’s particularly effective for targeting specific audiences. Digital access allows us to use data to deliver personalized messages to the right people at the right time. Although this is an objective of many marketing programs, few are actually able to do it well.
It can drive short-term revenue, generating quick wins through campaigns designed to convert.
The downside can include alienating a large percentage of your primary audience. We have all seen those desperate attempts to close a sale frustrating or annoying your customers and prospects by stalking and spamming them. Over used, performance marketing quickly becomes repellent marketing, driving sales to your competitors and wasting your promotional investments.
Performance marketing can also be great for testing and optimization. Any effective marketing strategy should include continuous improvement through A/B testing and performance tracking. Marketers should be smart about this. Don’t turn your customers into a pin cushion by over doing the A/B testing.
Marketers should treat this as the low hanging fruit. There are unidentified in-market people who might buy as a direct result of a single message, but when you treat your entire audience as low hanging fruit, your brand is not long for this world.
“I don’t know who you are
I don’t care
I am busy
Leave me alone.”
The Role of Brand Marketing
Brand marketing, on the other hand, is about building awareness, trust, and emotional connections over time. It’s the foundation of how your audience perceives your business. While harder to measure, its benefits are undeniable:
Building Loyalty – Strong brands foster customer loyalty and repeat business. If you can achieve that status, your biggest fans may even tell their friends and family about you. Believe it or not, most people don’t spend very much time and energy on even their favourite brands, but when it comes time to buy you want to be top of mind. That’s hard to do if you are investing all of your marketing funds in performance marketing.
Differentiating from Competitors – A well-established brand identity sets you apart in a crowded market, and is this not the primary goal of any promotional activity? The global and connected world we live in, dramatically increases competition. Don’t assume your competitors are all local.
Increasing Lifetime Value – Customers who trust your brand are more likely to buy again and recommend you to others. The 95:5 Rule says that in any given quarter, only 5% of your audience will be looking to buy or renew, while the rest of them will not even be considering a purchase and so are “out-of-market”. Brand advertising/promotion keeps those embers warm so when they are in-market you are still on the short list. And make no mistake, that’s marketing’s job. The role of Sales is to follow up and close those who are ready to buy.
Why Balancing Both Matters
Focusing exclusively on either approach can lead to missed opportunities and inefficiencies, which are difficult or impossible for most marketers to track with any level of accuracy.
Marketers with an over-reliance on performance marketing often “hit the wall”, which means their marketing efforts often yield diminishing returns. All the tricks that used to drive clicks and conversions don’t work anymore, or at least work less. The platforms that converted best no longer perform like they used to. Consumers may click on your ad but hesitate to convert if they have never heard of, don’t trust, or recognize your brand.
“I don’t know who you are
I don’t care
I am busy
Leave me alone.”
On the flip side, investing solely in brand marketing can lead to the appearance of a lack of accountability. Without actionable data, it’s difficult to understand what’s working and what isn’t. Without question, the profits of a brand are THE ultimate meaning stick. We have all seen marketers hack away at their pricing, discounting regularly and training their target audience to wait for a really good deal. Sales volume is one thing. Profit is a whole other metric. Anyone can give product away. It takes solid branding to create the perception of value to your audience.
By balancing both strategies, businesses can:
Drive Immediate Results While Building for the Future – Performance marketing can provide short-term revenue, which aligns with most corporate objectives – improve this quarter’s shareholder report. Happy shareholders pay much higher Executive compensation packages, so most, if not all, C-suite individuals are big fans of performance marketing. That is until, it no longer performs at the levels it used to. Meanwhile, brand marketing continues to create brand relationships with many future buyers.
Maximize ROI Across Channels – A consistently strong brand enhances the effectiveness of performance campaigns, reducing customer acquisition costs. That is worth repeating. The more famous the brand, the better permanence marketing produces the desired result.
Adapt to Market Dynamics – Combining data-driven tactics (direct or performance marketing) with a solid and consistent brand narrative allows businesses to remain agile and relevant. Marketers cannot control consumer buying behaviour, but they can understand it in order to be on the short list when buyers are in-market. They can also build their brand such that buyers hardly think about it – they just reach for your brand, with little or no thought.
Practical Steps to Achieve Balance
First, define clear objectives for both short-term performance goals and long-term brand-building objectives, ensuring both are aligned with overall business priorities. Be sure to resist the over-use of performance marketing as there is often a hidden consumer cost. We encourage our clients to see their brand as a piggy bank. All we ever do is put a chip in, or take a chip out. Performance marketing is oftentimes taking a chip out, while branding is adding a chip. Choose when to use a chip wisely and don’t keep using all your brand chips you have accrued with your target audience.
Consider dividing your budget strategically. For instance, allocate 60-70% to brand marketing and 30-40% to performance marketing, depending on your business stage.
Use analytics not just to optimize performance campaigns but also to measure brand health through metrics like share of voice, sentiment analysis, and customer retention.
Ensure consistency in your brand’s tone and messaging across both performance and brand campaigns to avoid confusion and strengthen your market presence.
Experiment with different ratios of performance to brand spending, analyzing how changes impact both short-term and long-term results.
Balancing performance marketing with brand marketing is not a zero-sum game; it’s a complementary strategy that fuels sustainable growth. By investing in both, businesses can drive immediate results while laying the groundwork for long-term success. The key lies in understanding the unique value of each approach and integrating them into a cohesive marketing strategy that resonates with today’s consumers and tomorrow’s market leaders.
And make no mistake, being famous matters. All things being equal people buy what they are familiar with. And performance marketing seldom, if ever, makes a brand famous.
