Brand Marketing and Performance Marketing usually receive the most attention in a Marketing Plan, yet there are so many debates on how much budget to allocate for each of them. In this article, we share the considerations around budget allocation between the two disciplines.
A search on Google for “brand marketing and performance marketing” returns 944 million results so I am sure this article will gather a lot of comments and opinions from either side of the camps! Both camps have distinctive differences in the way their disciplines are executed and measured. Performance Marketing has a bigger emphasis on precise targeting and ROI measurement while Brand Marketing focuses largely on perception shaping/changing and having a longer-term impact on overall business performance. Both marketers are also trained very differently, resulting in different perspectives in looking at Marketing results. There is no doubt, that a lot of debates circle this topic yet I am compelled to discuss this at great length.
Both Brand Marketing and Performance Marketing have their strengths and play crucial roles in a marketing strategy. Let’s look at each:
| BRAND MARKETING | PERFORMANCE MARKETING | |
|---|---|---|
| FOCUS | Builds brand awareness, reputation, and long-term customer loyalty | Drives immediate, measurable actions, such as sales, lead generation, or website traffic |
| METHODS | Advertising campaigns, content marketing, social media presence, influencer partnerships, public relations, and events | Pay-per-click (PPC) advertising, affiliate marketing, email marketing, search engine optimization (SEO), and direct-response advertising |
| BENEFITS | Enhances brand recognition, fosters trust and credibility, and creates a strong emotional connection with your audience | Provides a clear ROI, allows for data-driven decision-making, and can quickly generate results |
| TIMEFRAME | Results may take longer to materialize but have a lasting impact | Offers more immediate results, but they may not have a long-term impact on brand equity |
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half” – Wanamaker, 1838-1922
The budget allocation between Brand Marketing and Performance Marketing depends on your marketing objectives and the current state of your brand. Some very important considerations are:
| Brand Stage | How famous and well-known is your brand right now? If it’s a new brand, you may need to invest more in Brand Marketing to establish credibility and recognition. Once the brand is established, you can then allocate a higher budget to Performance Marketing to drive conversions. This is what I term the “harvest season”. |
| Short-term VS long-term goals | If you have short-term revenue goals, Performance Marketing might be a higher priority. If you’re focusing on long-term brand building and customer loyalty, Brand Marketing is crucial. A balance is necessary for sustained success. |
| Industry and Audience | Some industries and audiences respond better to one approach over the other. For an FMCG or CPG company that does not have any eCommerce sale channel, brand marketing will be more impactful in driving business results while an eCommerce business will stand to gain more from strong Performance Marketing campaigns. |
| Customer Lifecycle | Different marketing stages cater to various points in the customer journey. While performance marketing might be more focused on immediate conversions, brand marketing is critical for long-term customer relationships and retention. |
| Measurement and Adjustments | Continuously monitor the performance of both Brand and Performance Marketing efforts and adjust your budget allocation based on what is delivering the best return on investment (ROI) |
Balance, Balance and Balance
Ultimately, it’s not a binary decision between both disciplines; the right balance of budget allocation between Brand Marketing and Performance Marketing depends on your unique circumstances and goals. It’s often a strategic decision that may evolve as your business grows and market conditions change.
Some of the top brands in the world today strike a good balance between both to stay competitive and relevant (e.g. Starbucks, Nike, IBM, Apple, and Visa) while some have ignored this delicate relationship, only to be relegated to the “minor league” (e.g. Nokia, Motorola, and HTC).
Avante Strategies has years of experience helping brands and businesses perform Marketing budget allocation over multiple markets to arrive at a high-quality Marketing strategy. Contact us for a complimentary 45-minute chat to explore more.
