For years, brand and performance marketing were barely on speaking terms, let alone best friends. But the results of a new study by entertainment platform TikTok and brand tracking specialists, Tracksuit, suggest they can be friends after all!
So good riddance to the bad old days of being rivals, and hello to the new era of these two key components of marketing holding hands and frolicking in a field of flowers.
For years, performance marketing heavily relied on short-term metrics like sales, leads and clicks while brand building was less immediately quantifiable and more long-term, focusing on customer attitudes and behaviours.
So, of course they would be butting heads.
But Co-Founder of Tracksuit, James Hurman says it is no longer like this.
In the study “The Awareness Advantage” alongside TikTok and Tracksuit, Hurman says that “while performance and brand marketing have different and equally important roles to play, better business outcomes are achieved when they work together towards shared goals”.
There is a time and place for performance and brand marketing; it is just a matter of where to apply them.
While brand awareness doesn’t reflect in performance metrics, it can still strongly correlate to conversions, an ultimate goal of performance marketing.
So, when a brand has a catchy jingle or a super innovative and funny campaign, customers’ association to the brand goes up and the chance of this leading to a sale or a click is even higher.
“Brand is the foundation on which performance success is built: the stronger the brand, the stronger the foundation,” says Rory Dolan, Head of Marketing Science at TikTok AUNZ, JP and KR.
From an analysis of 147 brands that are customers of both Tracksuit and TikTok, results revealed that a brand with 40% prompted awareness is 43% more efficient in driving conversions, proving it’s a mutually beneficial relationship.
“Often when brands first start out, they’re doing lots of performance marketing, getting their first customers, but it tends to stop working at a certain point. And in order for it not to stop working and to continue working sustainably, as we increase our spend on platforms like TikTok, we need to also be doing that job of building brand awareness or creating future demand,” adds Hurman.
He adds that there are two types of demand in the market: existing demand (those who are ready to buy now) and future demand- those who aren’t in the market yet, but will come into it at some point.
Hurman brings up the analogy of buying a phone and says that a couple of people are in the process of buying a phone but in the next year or two, a lot more will consider buying a phone.
“At any point in time there’s a small number of people who are in the market wanting to buy from that category and a very large number who aren’t in the market but will come into it in the future,” he says.
And that is when brand building is the most important: building familiarity so that when those people come into the market, your brand will be front of mind.
How performance marketing can come into the mix is when a campaign is done to engage consumers, the metrics can support brand marketers to understand the health of the brand and work based on that.
Can marketers work to get more people aware of the brand, consider it and associate it with the right feelings?
Doing so successfully will drive behavioural changes and outcomes.
If the campaign works, stick with it. There is no need to change something that is not broken, and if the campaign wears out, just know that it has stuck with someone.
“There’s more evidence that campaigns wear in than wear out,” adds Hurman.
“The more we see it, the more we are likely for that to convert into behaviour change or sales.”
So now we know brand marketing and performance marketing can be friends, but what needs to be done to spark that friendship?
Hurman says that for mature brands, they should be spending more on brand building than performance marketing.
The study reveals that 60% of brands who spend on brand building make the brand familiar and make it more liked within the group.
For start-ups, the balance should be 70% performance marketing and 30% brand building. There are more early adopter customers in the marketing within the first year but after that, the shift should move to 50%.
To end the age-old debate, brand and performance marketing can be friends. It is just a matter of how they work together.
