The New Balance Between Performance Marketing and Brand Marketing

There is a debate going on in B2B marketing about performance marketing versus brand marketing. Regardless of how you feel about the terms ‘performance marketing’ and ‘brand marketing’, it’s clear that the former is under pressure. With only a small portion of potential clients being in-market at any given time and many of the interactions that influence the buyer’s decision taking place in the Dark Funnel, the cards seem to be stacking against performance marketing.

Some are therefore suggesting that we move away from performance marketing and focus primarily on brand campaigns, using fine-tuned Ideal Customer Profiles (ICPs) and supported by compelling content. That sounds interesting but is it the definitive answer?

The B2B Marketing Landscape is Changing

Over the last 25 years, performance marketing has established itself as the results-approach to digital marketing. With the launch of the first banner ads in 1994, the rise of Google and search engine advertising, and Facebook’s start of social media advertising, performance marketing promised marketers the precision in tracking and measurement that many were dreaming of. However, as the sector has matured, these early promises have proven to be somewhat overambitious.

So much so that in the last few years, you can see a clear shift happening within B2B marketing. A shift from a heavy focus on performance marketing – and budget allocation – to a renewed emphasis on brand campaigns. This shift is often referred to as the “B2B flippening“.

The limitations of performance marketing have been made clear in research done by LinkedIn and the Ehrenberg-Bass Institute which shows that roughly 95% of a company’s potential buyers are not ‘in-market’ to buy solutions at any given moment – and not knowing which portion of your audience is in-market severely limits the effectiveness of your performance marketing programs. When you add the complexities of the Dark Funnel and Dark Social, more stringent privacy legislation, and the end of 3rd party cookies, it’s clear to see that performance marketing is in difficult waters.

At the same time, research has shown that companies with strong brands have seen their total return to shareholders consistently outperform those that do not by a significant margin. The result is that companies are now shifting attention and putting more emphasis on brand marketing campaigns. Not only as a strategy to circumvent these obstacles but also to build that key connection with their audience to ensure that they will be the buyer’s consideration list for that time when they are in-market for the company’s solutions.

Getting Brand Marketing Right With ICPs and Content-Driven Campaigns

There is a lot to say to make the move and focus more on the brand:

  • Long-term value: By prioritizing brand in combination with a clearly defined target audience, you create long-term value that goes beyond more transactional interactions. It contributes to customer loyalty, can significantly impact customer lifetime value, and improve the odds that your brand will get short-listed when those potential buyers do enter the market in some future period. Keep in mind that 80% to 90% of potential buyers have a set of vendors in mind before they do any research. And 90% of them will ultimately choose a vendor from that initial list.
  • Quality over quantity: A laser-focus on ICPs enables businesses to finetune their solutions and attract the most aligned and valuable prospects, thereby ensuring a better use of resources and generating better opportunities. This connects with the advice that AirBnB’s Brian Chesky received: “Build something 100 people love, not something 1 million people kind of like.” People who really love a product or brand will make it go viral.
  • Differentiation: In crowded markets, brand strength and recognition can be your key differentiators. Engaging brand content campaigns that resonate with your target audience can offer you a great competitive edge – often more so than what performance marketing tactics alone can provide.

Keep the Wins: Valuing Performance Marketing's Contributions

While the shift in focus from “performance” to “brand” is clear to see, there are shades of grey that need to be considered:

  • The skills that Performance Marketing brought: We should not overlook the key benefits in skills and innovations that performance marketing has brought to the marketing practice. It has shaped the ability to test, learn, and iterate rapidly based on a wide range of data. Performance marketing clearly has its limitations, but is still able to provide important insights into customer behavior, preferences, and the effectiveness of different messages and channels.
  • Seeking synergy: Casting performance marketing aside in favor of brand marketing creates a gap where a bridge would be of better use. The most effective marketing strategies integrate both approaches, leveraging the strengths of each to achieve both short-term objectives and long-term goals.
  • Tailoring to market and product maturity: The question isn’t “either/or” but “when?” and “what?” — the sweet spot differs depending on your market and product life cycle stage. Newer or les complex products or markets might need more performance marketing to drive awareness and trial, while established or more complex products in mature markets will benefit more from brand-building and deepening customer relationships.

Shifting the Discussion

Instead of looking at selecting one approach over the other, marketing leaders should start by building a deep understanding of their audience and customer journey dynamics, market and product maturity, and the company objectives – and shape the marketing approach accordingly. Consider the following:

  1. Strategic alignment: Ensure that your marketing initiatives are in alignment with your overall company strategies and objectives. This might mean your emphasis may differ based on the maturity of the specific product and market, and your company’s growth.
  1. Customer journey mapping: Make sure you develop a good understanding of the customer journey. You can then identify where performance marketing tactics can be most effective and where brand-building and content marketing will have the greatest impact.
  1. Verify your organizational capabilities: Before you make a shift to a more brand and content-focused initiatives, consider your organizational capabilities and assess if you have the relevant skills, technology and processes in place.
  1. Embrace the power of storytelling: Use storytelling to build a connection between your brand and your audience, highlighting what makes your brand unique. Stories that resonate and reflect the experiences and challenges of your target audience build goodwill and trust. They can turn passive viewers into active participants and advocates for your brand.
  1. Analytics and measurement: Giving more attention to brand campaigns does not mean that you should focus less on measuring their impact. Developing your analytical capabilities to assess how your marketing activities impact brand perception, customer satisfaction, and loyalty.

Looking Forward

With this changing perspective between performance marketing and brand marketing, it is key that you find the right balance for you, your organization, and your market. Are you ready to find out how you can craft a marketing strategy that resonates with your goals and growth ambitions? Connect with us and let’s explore how we can help you!
Restless Marketing

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