What is performance marketing?
Performance marketing is a digital marketing strategy focused on achieving measurable and tangible objectives such as sales, generated leads, clicks and more.
Instead of aiming to build brand awareness and consumer relationships over the long term, performance marketing aims for immediate and concrete results that can be clearly tracked and attributed to the campaigns implemented.
Some examples of performance marketing activities include:
Pay-Per-Click (PPC) campaigns on search engines like Google and Bing
Campaigns by affiliation and partnership
Email marketing based on calls-to-action and lead generation
Remarketing campaigns to target users who have already interacted with the brand
Paid social campaigns aimed at specific objectives
Programmatic advertising via platforms such as Google Display Network
What about Direct Response Marketing?
In Italy, performance marketing is now equated with direct response or direct response marketing. This is obviously a very heavy and unnatural simplification
Direct Response refers, in the marketing discipline, solely to activities aimed at having super-measurability and super-narrowness of time between campaign and customer response. Let's think of a discount coupon provided via postcard or banner, a timed offer, flyering, a teleshopping promotion. It is used by professionals only in very few cases because today the scenario is too complex to abuse this tool. There is a risk of enormous costs and poor results, outside of a few privileged contexts.
Performance marketing is a much broader family than direct response marketing.
To find out more about direct response for small and medium-sized businesses, we recommend our study.
Advantages and disadvantages of performance marketing
The main advantages of performance marketing are absolutely clear and very easy to understand, to the point that real "religions" have recently been created according to which marketing is only "performance" (we will then see the risks and madness of this vision):
Measurability and attribution: It is possible to track exactly how many clicks, leads or sales each campaign generates, allowing you to identify and optimize the most effective activities.
Return on investment: since the results are clearly quantifiable, it is easy to calculate the ROI of the campaigns and determine the profit generated by each euro invested.
Speed: performance campaigns provide results very quickly, allowing you to test different messages and offers and understand what works best in a short time.
However, focusing only on performance marketing also has disadvantages:
Lack of brand equity: Focusing only on immediate leads and sales does not contribute to building awareness, consideration and loyalty to the brand in the long term.
Platform dependency: By relying heavily on channels like Google Ads and Facebook Ads, you are at the mercy of their ever-evolving policies and algorithms.
Cold messages and depositioning: Purely immediate conversion-oriented communications can be too aggressive and transactional for the consumer. In the long run, the brand that only acts "on performance" it is sterile, only oriented towards sales and therefore it becomes increasingly difficult to enhance and position it high.
No "leverage" effect: the profound meaning of marketing is to create a leverage effect over time, that is, for the same advertising investment, to obtain increasingly more sales and an increasingly higher margin. Leverage is built by the actions of a brand's creations in the "head" of people. Performance marketing does not contribute to this purpose, effectively resetting people's memories of the brand every day.
To balance these negative aspects, it is essential to integrate performance marketing with brand marketing activities aimed at creating solid and lasting relationships with the public.
What is Brand Marketing - brand communication
In an opposite but parallel way to performance, brand marketing focuses on strengthening positioning of the brand, its identity, its values and the experiences it offers to the consumer.
Typical brand marketing objectives include:
Increase awareness and familiarity with the brand
Communicate the values and mission of the brand
Humanize the brand and build an emotional connection with the audience
Differentiate the brand from the competition
Generate consideration and preference for the brand
Create loyalty and strengthen the bond over time
To achieve these objectives, brand marketing uses above all inspirational, engaging and emotional content through channels such as:
Large-scale video and graphic campaigns
Contents on blogs, online magazines and social media
Live events and experiences
Influencer marketing
Press advertising
Product placement
Sponsorships
Endorsement
Press office
Advertorials
Advantages and disadvantages of branding
The main benefits of brand marketing are:
Brand Awareness: Increase public awareness and familiarity with your brand.
Brand Loyalty: strengthens the consumer's emotional bond with your brand, driving repeat purchase choices.
Brand Equity: increases the perceived value of your brand, allowing you to potentially charge higher prices.
Differentiation: allows you to stand out from the competition, not competing only on price and promotions.
Humanization of the brand, which creates greater liking on the part of customers, a better disposition towards it and a general easier management of criticism.
Leverage effect: as mentioned above, the basis of brand marketing is to build leverage over time, so over the years increasingly robust memory structures are created in people's brains which make the brand familiar to more and more people. This increases their willingness to spend on the brand, lowers its price elasticity (i.e. it can be raised without ruining sales), increases margin, ad recall and overall satisfaction.
However, brand marketing alone also has limitations:
Poor measurability: Qualitative objectives such as awareness and consideration are complex to quantify. Many companies are simply not able to calculate the MER (Marketing Efficiency Ratio), i.e. the "mother" index to evaluate branding and performance. They limit themselves to ROAS, with serious problems. You can learn more with our article on the economic and evaluation issue of marketing.
Long-term return: continuous investments in brand building are needed before seeing concrete returns.
High budgets: Reaching audiences on a large scale through video, TV and other expensive means sometimes requires large investments.
The Importance of Integrating Brand and Performance Marketing
As seen, brand marketing and performance marketing have complementary but distinct objectives.
Performance focuses on stimulating immediate and measurable actions such as clicks, leads and purchases.
The brand instead aims at qualitative objectives such as increasing brand awareness, building long-term relationships and generating brand loyalty.
For a truly effective and complete marketing strategy, it is essential to integrate both components.
According to the experts Les Binet and Peter Field, the optimal budget distribution is:
60% Branding - to build brand equity and generate future demand
40% Performance - to monetize immediate demand and obtain ROI
Obviously the exact mix will depend on your market, the maturity of your business and other strategic factors.
But overall, combining brand and performance marketing in your marketing and communications efforts has numerous benefits:
1. Branding to capture attention, performance to convert
Brand marketing creates awareness, interest and desire through emotional and engaging content disseminated on a large scale. Performance marketing then takes this "prepared" audience and converts it with direct messages and strong calls-to-action.
2. Balance between short and long term goals
Performance marketing drives immediate results like sales and leads. Brand marketing builds equity and continuous demand over time.
3. Risk mitigation
Brand marketing creates preference and loyalty to the brand, making you less vulnerable to potential problems.
Performance marketing generates predictable and measurable returns in the short term.
4. Greater overall effectiveness
Studies show that integrating the two types of marketing leads to a significant increase in profits and sales over time.
5. Complete communication throughout the funnel
Branding messages inspire and inform early in the funnel.
Performance campaigns drive final conversion with strong offers and CTAs.
How to Integrate Brand and Performance Marketing
But in concrete terms, how can an integrated strategy between brand and performance marketing be created?
Here are some effective ways to combine the two approaches, deriving from our experience and according to the most solid evidence.
0. Build rock-solid brand assets
Before starting to do operational marketing, it makes no sense to spend a single euro if you don't have brand assets that are practically perfect and which will then be easily memorized by the public. We are talking about logo, slogan, positioning, website, graphics, stationery (business cards, layout, letterhead, email signature), colors, fonts, ready-made messages written by professionals. You shouldn't do marketing without a perfectly outlined set of brand assets.
Deep Marketing has supported clients in every market in the creation of these resources, contributing to extraordinary successes with logos, sites and brand assets of superior value to the competition. Contact us without obligation.
1. Large-scale campaigns + targeted remarketing
Use emotional videos and ads to increase awareness and interest on channels such as YouTube, Meta and, if possible, Spotify, on radio and TV. Then target this audience with dynamic remarketing ads to push them to convert or target a very similar audience if it is not possible to track it with a pixel.
2. Inspirational content + lead nurturing
Produce engaging content on blogs and social media to attract your ideal audience. Then use newsletters, social media and other means to nurture these leads over time.
3. Events and experiences + special offers
If your brand is consistent with offline communication, organize live events to bring your brand to life and form emotional bonds. Then, send exclusive offers and promotions to convert attendees into customers.
4. Social media engagement + social ads
On social media, aim first to create conversation and engagement with valuable content. Then leverage this active audience with targeted paid social campaigns.
5. Brand ambassador + affiliate
Engage relevant influencers to amplify your brand identity. Then offer affiliate programs to give them incentives to drive leads and sales. We have written a useful article on the endorsement and how to correctly choose a VIP or influencer.
6. Press + Google + Display campaigns
Continue to use print, radio and broad-reach media advertising to maximize reach and awareness. Then intercept your audience when they are online to push them into action with PPC or programmatic advertising.
As you can see, there are many opportunities to effectively integrate brand and performance marketing to capitalize on their mutual strengths.
The fundamental element is to ensure that the strategy includes both components, with messages, means and calls-to-action appropriately balanced between branding objectives and performance objectives.
Challenges in Integrating Brand and Performance
Despite its many benefits, combining brand and performance marketing also presents some challenges. Without relying on a full service agency capable of effectively covering the entire funnel, it can be practically impossible to be successful.
Difficult attribution
It can be complex to attribute specific conversions to brand building efforts, making it difficult to quantify ROI. A multi-touch attribution approach is needed.
We need to analyze the MER, rather than the ROAS. As we often repeat!
Conflicting objectives
Emotional messages that work for brand marketing may be too soft to convert in the very short term. And vice versa, aggressive performance-oriented copy can damage the brand image built over time and destroy the leverage effect.
Different channels
The channels used for brand marketing (video, social engagement) differ from the best performing ones for lead gen and sales (PPC, email, affiliate). This requires different skills and strategies.
Budget allocation
Determining the right proportion of budget to allocate between brand and performance is complicated and requires a lot of testing and optimization.
Short-term vision
Many managers are incentivized on short-term performance KPIs. As a result, they tend to underestimate the long-term investments needed for brand building. This is probably the biggest problem we've seen in too many companies for years.
Solutions?
These are not easy challenges, and as we have said, it is difficult to do good marketing along the entire funnel without a professional, full service agency, capable of following branding and performance (such as Deep Marketing)
But as a general guideline, brands must, first and foremost:
Adopt sophisticated multi-touch attribution models, and learn to evaluate MER and not simply ROAS
Brief agencies clearly on distinct objectives and tone of voice for brand and performance
Create teams with specialized skills dedicated to the two areas or make use of an agency that can provide different levels of professionalism
Set a guaranteed minimum budget baseline for branding activities
Educate internal management on the importance of a long-term vision
Takeaway
Performance marketing drives measurable and immediate results such as conversions and sales
Brand marketing builds equity and loyalty to the brand in the long term
For optimal results, the two components must be effectively integrated
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