Should you spend all your marketing budgets and resources on performance marketing campaigns that will yield immediate results? OR should you spend the budget on brand building campaigns that will help in the long term?
This question has puzzled many a marketer, not just vegan brand marketers.
What is performance marketing?
Performance marketing is result oriented marketing. I think of it as the Maggi noodles of marketing: 2 mins and its ready! #Justkidding
It mainly applies to digital marketing where we can pay only for those marketing campaigns that meet the campaign objectives. E.g. pay per click or pay per download.
You can read more in this beginner’s guide to performance marketing.
What is brand building?
Brand building is when, not just your TG, but even others outside of that group are aware of you and have a perception about your brand. It is using emotional brand campaigns to build awareness.
You have got to read this article by Samuel Scott to understand more about brand building vs digital advertising.
Another unmissable resource: This old podcast episode by my favorite Bob Hoffman. “I finally understand why online advertising doesn’t build brands”
The 60:40 rule
Research on marketing effectiveness says that a 60:40 split (or higher) between brand building and performance marketing is more effective. Performance marketing gives you business growth and results in the short term. But it does nothing to build long-term brand equity.
With long-term brand equity, not only will you get better customer loyalty but those customers will also be less price sensitive. Isn’t that essential, especially for vegan brands that are anyways judged on pricing? This is even more important during recession and inflation.
“History has shown that companies that increase advertising initiatives during economic downturns can snag market share from more conservative competitors. That’s right: With businesses shrinking their marketing budgets across the board, brands that invest in brand awareness campaigns benefit from lower advertising costs. While this strategy may not immediately result in a sale, it will contribute to higher brand recognition when consumers are inevitably ready to spend again” – Forbes
Let me leave you with this quote from a Kantar study of 2020 that works even today:
“There is a wealth of empirical proof to suggest that increasing ad spend during a recession improves a company’s longer-term growth prospects. But, as Ritson notes, you need three things to pull this off:
- Your company must be financially able to fund an increase in spend
- Your management team must believe that marketing is a long-term investment, not a short-term cost
- You need the right strategy, content and media deployment (I assume this is what Ritson means by “you need to not be shit”).
Bottomline
If you want your vegan brand to become a legacy brand, that is not only alive but thriving for your next generation, you have to spend far more on brand building campaigns. Especially during recessions or when sales are down.
Question to think about : 💡
If brand building is more important for long term growth than performance marketing, should we spend more on traditional mass media like radio, print, TV, OOH, PR rather than digital?
Should you want to talk, you know I am just an email away, right?