Traditional marketing departments often suffer from self-imposed dichotomies:
Brand marketers focus on big picture advertising campaigns and experiential activations aimed at driving awareness and emotional connections. (Upper funnel activities)
Performance marketers operate separately, using targeted digital ads and promotions to generate conversions and sales. (Lower funnel activities)
According to McKinsey, many companies chronically underinvest in broad brand marketing activities like TV advertisements and over-index budgets on short-term performance marketing optimizations that are easily measured and show immediate results. Their data shows that this excessive focus on targeted performance campaigns often comes at the expense of building meaningful emotional affinity with customers in the long run.
This is a critical issue, as HBR finds
Emotions account for more than 90% of consumer decision-making.
The Undesired Consequence:
This divided marketing approach fails to account for consumers’ need and expectation of a holistic brand experience throughout their entire journey. Without an integrated approach, consumers may have disjointed brand interactions that limit visibility and feelings of connection early on.
Weak brand building efforts can result in lower long-term lifetime value even when tactical performance marketing is generating near term sales.
Adopt An Integrated Full-Funnel Approach:
In response, leading organizations are now bridging this divide by implementing full-funnel marketing strategies. This integrated model ties ongoing brand building and performance marketing efforts to shape the consumer’s perception, understanding, and emotional connection with a brand across all touchpoints in their journey.
For consumers, full-funnel marketing done well delivers consistent brand exposure and cohesive messaging from initial awareness to research and evaluation phases through to post-sales engagements where loyalty gets built. Sustained brand building activities make the brand visible and emotionally relatable during the initial awareness stage while performance marketing converts this affinity into sales and loyalty farther down the line.
Implement Robust Brand Equity Metrics:
To enable stronger linkage between brand building and performance marketing, we need a clear set of metrics—ones that capture the essence of branding while recognizing the significance of performance.
HBR’s article, "How Brand Building and Performance Marketing Can Work Together," (June 2023), guides us on four pivotal brand metrics to develop:
1. Create and Connect Brand-Positioning and Activation Metrics:
Positioning is the foundation of brand building, establishing a brand's competitive arena. But this isn't just about long-term visioning. Every aspect must be managed:
Purpose: Your commitment to broader values than just profits. This could be sustainability, inclusivity, or any cultural goal.
Emotional Attributes: The feelings you want consumers to associate with your brand - be it sophistication, trustworthiness, or vibrancy.
Functional Benefits: These are tangible features that represent your brand's quality, design, and variety.
Experiential Qualities: The intangible attributes of your brand that resonate with your audience – like reliability or innovation.
Activation Levers: These are means to bring your positioning to life. They encompass product, price, place, people, and promotion. A brand must measure perceptions across all these levers to truly gauge its positioning efficacy.
2. Create a Composite Metric of Brand Equity:
At the heart of brand-building is the objective of bolstering brand equity. Develop it through a weighted amalgamation of:
Familiarity: Beyond brand recognition, how deeply do consumers feel they know your brand?
Regard: It reflects the respect and affinity consumers hold for a brand.
Meaning: How relevant is your brand in the consumer's life?
Uniqueness: How distinctively do consumers view your brand in the market?
Measurement must be done in context of direct and indirect competitors, accounting for relative mindshare and consumer preference.
3. Make Brand Equity a KPI for Performance Marketers:
Brand metrics shouldn't be the sole concern of brand builders. Performance marketers need to marry conversion rates with shifts in brand equity. A rise in conversions but a dip in brand regard? It's time to reassess the content or mix of your performance marketing.
4. Establish Your Brand’s Link to Revenue and Shareholder Value:
It's essential to map your brand metrics with tangible financial metrics. Whether it's revenue, shareholder value, or ROI, this linkage quantifies the financial implications of brand-building endeavors and performance marketing efforts.
The Benefits: An Enhanced End-To-End Brand Experience
For consumers, end-to-end marketing strategies create a streamlined brand experience. They cultivate consistent brand exposure and unified messaging to build an emotional connection throughout the consumer journey, not just at the final transaction point.
Building brand equity has never been more critical to win consumers that exhibit paradoxical behaviors. Recent McKinsey research (Apr'23) reveals:
80 % of survey respondents said they're changing their shopping behavior by trading down, compared with 74% in July 2022.
At the same time, Consumers are willing to splurge, with 40% saying they're eager to spend in the coming year.
This duality is stark for Gen Z: 64% will splurge, even as 88% look for cheaper options.
Additionally, and importantly, full-funnel strategies empower marketing leaders that are continuously challenged on budgets. They gain integrated insights to inform better investment decisions and measurement of ROI tied to concrete business growth goals.
Assess your current marketing strategies against your end-to-end consumer-journey.
Contact us to learn how our consumer journey expertise can help you capture your consumers' hearts, minds, and dollars.
Articles referenced:
Harvard Business Review: How Brand Building and Performance Marketing Can Work Together, HBR Magazine (May–June 2023)
McKinsey: Why every business needs a full-funnel marketing strategy, February 12, 2021
McKinsey: US consumers send mixed signals in an uncertain economy, April 28, 2023