Editor’s Note: Marketers and market researchers have been debating for decades it seems about the relative merits of advertising versus promotion – how much of each/when/where/whom? The latest iteration of this debate has been around the roles of TV advertising versus digital advertising, with the view among some that longer-form TV ads are better suited for brand building, and digital ads better for call-to-action. Joel Rubinson has produced a really nice framework about how to think about the problem, that crystallizes the issues, and provides a solid path forward for marketers. This is a really important article to read and digest.
The marketing pendulum is swinging towards performance advertising because there is hard evidence it works. Brand marketers counter that too much emphasis on short term performance can mortgage brands’ futures.
Truth on both sides…how can marketers decide how to best allocate funds?
Ad Guidance Framework
I will describe an “Ad Guidance Framework” that will enable Marketers to dynamically shift ad spend allocations between performance and brand advertising in a fact-based way.
But first: why is such a framework needed? Doesn’t good advertising do both?
To some degree, yes, but, a particular advertising unit (creative plus media strategy) is unlikely to be optimal for both maximizing ROAS (return on ad spending) and building brands because, if done right, they need to be constructed differently. It’s like farming…you don’t use the same process for planting and for harvesting.
|Performance advertising (harvesting)||Brand advertising (planting)|
|Goal||Drive ROAS||Drive brand favorability|
|Mechanism||remind people of what they already know about your brand||lead people to think or feel something new about your brand|
|Theory||Recency theory as articulated by Erwin Ephron||Classic brand funnel; salience, memory structures|
|Measurement||focused on behavior…digital conversions and sales||focused on surveys that document brand lift (improved awareness, brand equity, consideration, etc.)|
|How||Target existing heavy and medium users: preferably when they are ACTIVE (i.e. ready to buy)||Reach needs to be broader than current users. The distinction between active and dormant consumers becomes irrelevant.|
|Drivers||Efficient CPMs and targeting are more important than creative.||Creative and brand narrative matter most. Plays to the strengths of video.|
|Evidence||targeting the right consumers with higher media weight levels can produce 20 TIMES the ROAS (e.g. vs. mass market), as documented in my white papers and case studies.||Conversion rates of brand favorables are 2-5 times higher than non-favorables but is this difference sustainable over time?|
Should you be emphasizing performance or brand advertising?
There isn’t one answer…it is a dynamic that depends on the stage in the life cycle and current performance.
Consider the product life cycle stages.
First, you plant. Invest to make your brand familiar to consumers. The good news is that consumers are open to new ideas! That is why advertising elasticity for new brands is 2-3 times greater than the elasticity for mature brands.
As trial and first repeat build, you now have a consumer franchise so you can harvest high ROAS performance using precision targeting.
Consumers now know your brand so brand advertising often hits a wall. Shift from trying to teach consumers something new to reminding people of what they already know…use a healthy dose of performance approaches to reinvigorate ROAS. You can even still use brand messaging in long form but in all cases, delivered via precision-targeting to users…harvesting.
As a brand’s performance softens, it is often restaged. Re-plant with brand advertising. Once familiarity with the brand refresh is built, you should shift back to performance marketing.
How would a marketer know when to shift money between brand and performance marketing?
Marketers would benefit from an ad guidance system that tracks performance in two areas:
- Brand intender score
- ROAS performance score
The stronger the brand intender score (a composite measure of digital upstream behaviors and survey-based brand favorability measures), the more latitude you have to shift towards performance marketing. As long as the brand intender score is high, you are not hurting the brand by harvesting super-high ROAS…and your CFO will love you for it!
If the brand intender score is declining, a continued focus on performance advertising can create a death spiral…you get a high ROAS from fewer and fewer consumers, so down you go.
Learning needed to create an ad guidance system
First, I bet marketers don’t even systematically quantify their ROAS. That needs to be done and is fairly straightforward. Then you can set year to year growth targets for marketing ROI.
The tougher problem is that the industry has yet to quantify the hard value of brand building…its effect on future conversion rate baselines. MTA models and lift studies are inherently short term.
Finally, each granular media tactic needs to be quantified in terms of its brand vs. ROAS impact. Think of it as each media tactic has an x and y coordinate. It is unlikely that the media tactics leaderboard is the same for driving both short term and long-term conversion rates.
This learning agenda…the quantification of brand vs, performance marketing and the mapping of media tactics to short and long-term conversion rates…form the basis of the “brand as performance” initiative I help spearhead for the Mobile Marketing Association. By quantifying the conversion value over an extended period of time of brand advertising, marketing will have, for the first time, a basis for optimizing brand vs. performance advertising not just for short term performance but for long term growth.
This article was originally posted on Joel Rubinson’s blog.