Performance marketing seeks to divide, branding seeks to unite

By Nigel Hollis

Recently, I have spent a lot of time trying to understand the world of performance marketing. It has not been easy, in part because of my background in brand building. To me performance and branding are like chalk and cheese. They reflect very different marketing mindsets and practices.

Performance marketing

The digital marketing ecosystem is designed to divide people into discrete groups, the goal being to deliver personalized communication to an audience of one with the intention of conversion. Whether it is first, second, or third party, performance marketing is data-driven. Behavioral data defines which audiences are targeted, how, when, with what content, and how frequently. No data means there is no audience. Welcome to the world of performance marketing, where conversions are the endgame, and efficiency is the watch word.

Brand building

By contrast, rather than divide the audience, brand building seeks to unite people’s understanding of what a brand stands for. Brand building seeks to influence future buyers, the ones that do not need to buy your product category now, but likely will do so in time. As a result, brand building spreads its net wide. Data is used to refine campaign execution, but behavioral data is of limited value because the response to a brand campaign takes place in people’s heads. Instead of directly influencing behavior, effective brand campaigns create memorable impressions that build salience, trust, and confidence and prime people to choose the advertised brand.

Ships in the night

Given different goals, tools, and terminology, it is hardly surprising that performance and brand marketers sometimes look at each other with blank incomprehension. Like two ships passing at night in mid-ocean, communication is limited. Brief flickers of meaning cross the divide, as if both parties were limited to using old fashioned signal lamps.

Why waste money?

To many performance marketing practitioners, the description of brand building sounds incredibly woolly, more hope than strategy, and wasteful too.

If you know the audience and their needs why not target them?

When marketing a product or service that can be customized to meet people’s needs, it seems obvious that marketing communication should speak to those different needs, particularly when you have the data that allows you to do so. Why waste money building up an impression of the brand, why not focus on the specific need your brand can serve?

The answer is that right now, most potential buyers do not even know they will have a need. But if the brand marketer has done their job, when the time comes, future buyers will be primed to choose your brand. And when there is a shared understanding of what a brand stands for other benefits accrue to the brand. Familiar brands get talked about and recommended because people know what they stand for. Familiar B2B brands get the CEO’s head nodding in agreement, unfamiliar brands get a quizzical look.

Why reach a wide audience if many will never buy?

The idea that an advertiser might waste money advertising to people in the hope that they might one day buy seems crazy. Surely, it is far better to target the people whose profile and behavior clearly indicates proximity to purchase?
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​But that group represents a minority of people who will buy (and, if a competitor has done a good job of branding may not even consider your brand). If you limit reach, you will exclude some people who would buy otherwise and choke off the sales pipeline. To be effective, brand marketing must live with a degree of inefficiency. Obviously, there is little point in targeting people who patently have no need for your product, but that often leaves a large audience who might do so in future. The brand marketer does their best to ensure their investment in media and creative is likely to pay off ahead of deployment, rather than optimizing it on the fly.

Are you targeting data or people?

Equally, many brand marketers are perplexed by the practice of performance marketing. The marketing tech stack is complex, and the use of data appears to ignore the human who will make the ultimate purchase decision. Particularly in B2B marketing, with a wealth of data on customers and prospects, it seems that data defines the audience, irrespective of the fact that much of that data is inferential, inaccurate, and inappropriately used.

What really motivates people to buy?

The idea that an audience data profile alone can tell you enough to influence a purchase can be bemusing to a brand marketer. What about motivations? Brand marketers spend a lot of time trying to figure out what will best motivate people to buy their brand. They analyze behavior – this can be incredibly useful – but they also try to figure out why people buy (or not) by asking them. And the answer often has as much to do with emotion as it does the nature of the audience or product functionality.

Will that content earn attention?

Most people would acknowledge that even an uninvited sales pitch can earn attention, if delivered to the right person, at the right time, and in the right context. If someone is ready to buy and actively deliberating their choices, the right messaging can nudge them into making a purchase. Even so, while relevance is important, even business professionals want to read something interesting and inspiring. And all too often A/B testing simply reveals the best of a bad bunch and misses the fact that the campaign could have been ten times more effective with better creative. Brand marketers cannot help but wonder if optimization and efficiency are poor substitutes for effectiveness.

Lost growth potential

The sad thing is that to be most effective brand building and performance marketing should work in synergy. Brand marketing primes buyers to consider a brand for purchase when the need arises. Performance marketing takes identified buyers and then seeks to nudge them closer to a purchase. But it is a lot easier to make the sale happen if the buyer is already predisposed to choose the advertised brand. People who have visited your web site, downloaded a brochure, or attended a live event, are likely already predisposed to buy your brand. Digital calls to action, search results, and chatbots then act as signposts on the path to purchase.

There is a lot of evidence that brands need to find the optimal balance between brand building and activation, whether that is 60/40 for consumer brands or 50/50 for B2B. But even when spend is allocated appropriately, brand building and performance marketing often fail to mesh, sometimes failing at even the most basic level, like not giving their content a common look and feel to help prospects recognize and respond to the brand.

Influencing purchase probabilities

Whether it is designed to build brands or drive conversions, all marketing is a matter of influencing purchase probabilities. The impact of brand marketing may seem indirect and hard to measure, but by working against all potential buyers the effect on sales can be big, even if that effect is realized over time as people enter the market. By contrast, the impact of performance marketing may seem immediate and the response big (at least in percentage terms), even though that response depends in large part on the buyer’s history of brand experience and exposure not just the impact of the most recent touch points.

Move it an inch, move it a mile

When I was learning how to build dry stone walls – which necessarily involves moving heavy rocks – I came across this phrase,

“If you can move it an inch, you can move it a mile.”

I found the saying to be true. The right application of force, augmented by different tools like pry bars, rollers, and planks, can move even the heaviest stone. But apply that force incorrectly, or use the wrong tools, and the rock will not budge.

Settling for the inch, not the mile

Unfortunately, I think that too much of today’s marketing is settling for the inch, not the mile. Far too many companies do not understand how brands can facilitate sales and are applying their marketing tools incorrectly as a result. Too much attention is focused on optimization and efficiency and not enough on effectiveness, changing the game in favor of the advertised brand. As a result, while performance marketing may increase incremental sales in the short-term, the gain is not enough to grow the business long-term, because future buyers are not primed to choose the brand.

But what do you think? Any performance marketers want to set the brand guy right? Please share your thoughts.