Performance marketing is incredibly important for many brands. It is often the commercial engine behind a company. However, if brands only focus on performance, they can lose their brand value and their funnel dries up. This is because branding is a long-term growth objective and because 95% of purchases are made based on emotion. Brand associations and the customer experience often have a much greater influence on the purchase decision than the financial aspect.
The digital transformation, where more and more automation occurs in digital advertising, shows that the emphasis is on performance. The explanation for this is simple. Performance is easily measurable. Through dashboards, attribution modeling, and data warehouses, we can collect, structure, and analyze data. We visualize data in such a way that marketing strategies can be traced and success becomes visible. We optimize our marketing tactics, work with predictive modeling, and refine our KPIs to achieve more success.
However, the emphasis on performance can lead to over-optimization and a short-term focus, causing brands to become unbalanced. Due to the rapid succession of digital developments, this leads to a misplaced emphasis on sales activation, resulting in brands losing their brand value. It is therefore important to find a balance between performance marketing and branding. By investing in brand value and the customer experience, brands can build long-term loyalty with their target audience, which leads to successful sales results in the long term. A second trend that emerges from this is the necessary shift towards more upper funnel marketing.
Binet and Field researched how brands can create value through brand building and sales activation. They concluded that effective brand building focuses on creating emotional bonds between the brand and the consumer, and that sales activation focuses on directly activating sales. They argue that both aspects are necessary for successfully creating value for a brand. Brands that only focus on sales activation may achieve short-term sales results but will not be able to create valuable bonds with their customers in the long term. On the other hand, brands that only focus on brand building will create valuable emotional bonds but may have disappointing sales results in the short term. The right balance between brand building and sales activation is therefore crucial for successfully creating value for a brand.
The digital revolution actually already necessitates a shift or breaking of this cycle. Due to digital development, activation efficiency is getting higher. If you want to buy a new coat, you can bet that you will have purchased it online within 5 steps. But in a capitalist society, competition is fierce, and how can you as a brand continue to stand out?
For this reason, you see more and more brands focusing on upper funnel campaigns, brand building. They break the cycle of performance marketing and invest in branding. An example of this is Nike, which temporarily changed its slogan from “Just Do It” to “Don’t Do It” as part of their brand value strategy. This was a strong statement, showing that Nike is not only concerned with selling products but also responds to social events. Through branding and marketing strategies that emphasize the emotional meaning of the brand, Nike has built strong brand value. This has led to long-term loyalty from their target audience.
Investing in branding is therefore necessary to achieve the long-term goal of a brand. Strong brands always win over weak brands because they have a greater influence on the consumer's decision-making process. While some brands are busy with a spot on Google, other brands are busy with a spot in the consumer's mind. It is important to find a balance between performance marketing and branding to remain successful in the long term.
If your brand/company also wants to benefit from the advantages of a good balance between branding and performance marketing, contact Follo. We can have your paid advertising assessed on how it contributes to building brand value and achieving successful sales results in the long term. Let us know what your goals are, and we will be happy to help you achieve them.
