When companies prioritize sales goals, they may struggle to be remembered, reducing their ability to reach new audiences. Conversely, over-prioritizing brand goals can lead to significant costs in brand building while hindering growth. This article, referencing Kantar’s research, aims to provide a more nuanced perspective on this perennial issue.
When Prioritizing Sales Goals, Companies Risk Being Forgotten
In Summary: Is branding or focusing on numbers and growth more important?
The CEO expects Marketing to drive short-term sales, evidenced by the numerous internal meetings created solely to answer the question, “Why aren’t we generating sales?” “Marketing for sales” is essentially known as performance, sales, or activation marketing (for example, promotional programs) aimed at achieving revenue efficiency.
In 2023, due to the notable impacts of economic fluctuations, a company’s ability to see profits from every dollar spent on marketing has become a decisive factor in the short term. Facing tough conditions, up to 48% of the global Marketing teams surveyed by Kantar reported that they are investing in promotional activities to attract customers rather than in brand building or more abstract concepts like optimizing customer experience. This is very dangerous.
In essence, it cannot be denied that digital advertising has evolved significantly. Instead of simply introducing products, describing their uses, and persuading purchases, modern digital advertising has a greater mission: representing the voice of the brand. In other words, digital advertising—this potential media channel—can achieve more than just selling stories.
The Importance of Long-Term Brand Building
Branding has become part of daily life, the experience of the masses, and a component of culture. Building a brand is more closely related to the sales story. Most importantly, brand building must make the brand stand out compared to competitors and facilitate consumer choice.
A famous case study in long-term brand building is Airbnb. In recent years, Airbnb has made significant changes to its marketing strategy. Since 2019, the company has sought to rely less on search advertising, focusing instead on marketing forms that have good virality and emphasizing public relations to strengthen its brand. Airbnb has actively communicated news about its business operations and has run television ads. Brands like Airbnb have become stronger, broader, and capable of continuing to exist with us for many years to come.
Dissecting Global Marketer Perspectives
A serious study conducted by Kantar (2021) aimed to find the key answer: What is the most important factor in measuring ROI—performance marketing, brand building, or a combination of both?
While 86% of marketers believe that the combination of both is necessary, only 63% of them report that they ACTUALLY MEASURE the effectiveness of campaigns based on both types of data.
The perennial story: measuring digital marketing campaigns in organizations. In many companies, measurement simply involves counting clicks and checking if sales have increased. While an increase in clicks is a positive signal, this metric is too basic to ascertain whether the money spent on marketing is truly effective.
The lack of research in digital advertising activities and the reliance on surface-level metrics like click counts have caused digital advertising to evolve primarily as a tool for performance. Given its low cost and immediate visible returns, using digital advertising in this manner can lead to a lack of a holistic view and strategic vision.
Another issue arises from the average tenure of a marketer—typically 2 to 3 years—which has sparked debate in many companies about whether to invest in a permanent Chief Marketing Officer (CMO) position. With new and attractive job opportunities on platforms like LinkedIn, a marketing role often doesn’t stay long enough to see the results of long-term strategies. As a result, marketers feel the pressure to demonstrate their abilities through quick achievements or results before moving on to their next position.
Is it possible to achieve brand building and performance marketing objectives simultaneously?
Assuming the goal of an advertisement is to achieve both branding and performance objectives, what would the weighting of each outcome be? Looking at data collected by Kantar over the past five years, it indicates a strong correlation between brand building and performance marketing.
Two-thirds of advertisements perform similarly in both areas. Very few ads excel significantly in one aspect while performing poorly in the other.
Evidence shows that ads successful in the short term still perform well in the long term, and vice versa. The key lies in the brand’s focus on brand building when developing advertisements.
It is especially important to not lose sight of long-term objectives, even when producing ads aimed at short-term results.
What Would Advertising That Achieves Both Outcomes Look Like?
Analyzing a dataset of 50,000 ads targeted at consumers over the past five years, several potential factors have been identified that help digital ads perform effectively in both branding and performance aspects (Source: Kantar).
- Product or Brand Variations: Successful ads often showcase the product or brand in various forms. The top 5% of ads that excel in both branding and performance tend to provide more information about the product, including demonstrations of use, specific ingredients, or materials.
- Brand Placement: The brand should be introduced early in the first few seconds of the ad. This helps establish brand recognition and sets the stage for the audience.
- Wordplay: Incorporating humor through wordplay in ads increases engagement metrics and enhances the overall performance of the advertisement.
- Trendy Influencer Marketing: The effectiveness of using celebrity influencers is particularly noticeable when reputable or well-known personalities are featured in ads. Their presence can significantly boost the impact of the campaign.
Important: Focusing on Brand Building Increases ROMI
While performance-focused advertising can show direct increases in ROI, a stronger emphasis on brand building has been proven to enhance ROMI, which is a more direct metric in marketing discussions.
ROMI measures the revenue generated by a marketing campaign relative to the costs incurred to run that campaign. It is calculated using the formula:
ROMI = (Marketing Income – Cost of Goods – Marketing Spend)/Marketing Spend * 100
Solving Problems with AI Assistants
The future of advertising shows promising potential for ensuring both brand identity and performance flexibly.
Artificial Intelligence (AI) has the capability to create dynamic content, allowing for the adjustment of ads during their execution. This integration facilitates a seamless combination of branding and performance content while enabling effective measurement. The ability to modify an advertisement in real-time—such as adding or removing offers or changing messages targeted at users—will ensure that both aspects are effectively represented in a single ad.
A successful example of a campaign that builds brand identity while showcasing sales techniques is McDonald’s ‘Hungry Eyes’ campaign. This advertisement does not aggressively prompt customers with a call-to-action; instead, it subtly reminds viewers that, thanks to the McDonald’s app, their favorite meals can be delivered at any time. This clever approach effectively boosts sales.
Understanding the strengths and influencing factors of digital advertising enables marketing teams to optimize their communication and advertising strategies, aligning with the significance of both sales objectives and brand building.
