Ever been confused about the difference between performance marketing and brand marketing? You’re not the only one. These are two commonly used marketing terms that are easily confused, but differ in their approach and goals.
Harvard Business Review argues that, “Pitting brand building and performance marketing against each other in a competition for budget unnecessarily damages the effectiveness of both.” So, how can you best understand these two types of marketing to get the most out of each?
This blog will explore the similarities and differences between performance marketing and brand marketing, and why there is confusion around the two.
What is performance marketing and why is it important?
Performance marketing is a paid strategy that drives specific outcomes for a brand such as conversions, clicks, leads, or sales. Examples include:
- A Facebook ad campaign retargeting users who have recently searched for a specific product or service, with the goal of driving immediate sales.
- Email marketing that drives traffic to your website based on items someone’s recently viewed.
- Abandoned cart texts that encourage shoppers to complete their purchase.
- A Google AdWords campaign targeting users who are actively searching for a specific keyword, with the goal of driving immediate clicks and leads.
- Performance marketing channels such as Wunderkind that guarantee revenue.
What is brand marketing and why is it important?
Brand marketing focuses on building brand awareness and creating a positive association in the minds of consumers. Examples include:
- A Patagonia social media campaign that highlights the company’s commitment to environmental sustainability, with the goal of building brand loyalty and advocacy among environmentally-conscious consumers.
- A WunderKIND Ad that drives brand awareness, such as shoppable creative, video selectors, and tap-to-map ads.
- Dove’s recent Cost of Beauty campaign that highlights the damaging effects of social media on young women, driving brand affinity and awareness.
Performance Marketing vs Brand Marketing
Both performance and brand marketing share the same goal: to increase revenue and drive business growth. They aim to ultimately drive customers to make a purchase—and might even use some of the same platforms to do so, such as Google, Facebook, and email or text message marketing.
However, the difference lies in the approach taken to achieve this goal.
“Performance marketing is when you put money in and you get money out,” explains Greg Lawrence, Associate Director of Strategy Consulting at Wunderkind. “While with brand marketing there is no direct revenue attributed.”
Performance marketing is data-driven and easy to measure, as it focuses primarily on ROI (return on investment). These campaigns typically involve paid advertising, such as search engine marketing or paid social advertising. However, performance marketing can also be achieved through your owned channels—for example, using first-party data to target individuals through email or text to drive metrics like click-through-rate and conversion rate.
Brand marketing is harder to measure as it involves more creative elements such as brand recognition, storytelling, and emotional appeals. Brand marketing campaigns aim to create a long-term relationship between the brand and the consumer based on loyalty and aligned values. It may not have an immediate impact on revenue, but it can lead to increased customer lifetime value and brand evangelism over time.
Why do brand marketing and performance marketing get confused?
One of the reasons why there is confusion around performance marketing and brand marketing is that they are often used together in integrated marketing campaigns. For example, a company that uses performance marketing to drive immediate sales can simultaneously invest in brand marketing to build long-term customer loyalty.
“You can do as much performance marketing as you like, but if there’s no brand marketing as well, then after a certain point it just won’t sell,” explains Richard Jones, Chief Revenue Officer at Wunderkind.
Make performance marketing and brand marketing work together
Your top line (brand marketing) should ultimately help drive your bottom line (performance marketing). Some marketing channels, such as search engine marketing and paid ads, can serve both performance marketing and brand marketing purposes. For example, a paid ad promoting a brand’s top line (such as a Nike “Just Do It” ad) can drive to a landing page that encourages conversion.
The same is true for owned channels. Your website is the very definition of both brand marketing and performance marketing. It should capture and promote the essence of what your brand is and trigger an emotional reaction (whether it’s happiness, nostalgia, hope, etc.) while also being strategically designed to drive conversions.
You can also achieve this with channels like email marketing and text marketing. People will opt into your lists because they love your brand and want to hear from you, which should lead to you nurturing your audience down the funnel.
Performance marketing and brand marketing don’t have to compete. In fact, they can (and should) work hand in hand. An example of a brand that was able to effectively unite both types of marketing is Airbnb. CEO, Brian Chesky, said that Airbnb took the route of ‘education’ instead of ‘buying customers’ in their ‘Made Possible By Hosts’ campaign. The campaign put their hosts in the spotlight (brand marketing) while paying to drive traffic to their site (performance marketing). The company says this approach boosted its website traffic 20% in the fourth quarter of 2021.
“Through creating a larger top-of-funnel audience with brand marketing (via tactics such as video marketing), you then see effects further down the funnel in conversion-driving campaigns,” Lawrence says.
Build brand awareness and drive results
Brand marketing builds recognition and loyalty in the long term, while performance marketing drives immediate, measurable results. You need both.Wunderkind builds brand identity and storytelling through personalized emails, texts and ad campaigns, with a revenue guarantee. Learn more about Wunderkind today.