“Half the money I spend on advertising is wasted; the trouble is I don't know which half,” said John Wanamaker, a pioneer in marketing.
But that’s a quote from early 20th century. This no longer fits the modern marketing philosophy. Every penny spent can be traced and accounted for. It’s crystal clear to see what’s working and bringing returns at least in the medium run. As a start up with stringent budgets or a marketing team in a large enterprise with pressure to show performance of investments, where do you place your bet? Is it on the top of the funnel, grandeur vision of brand marketing or very tactical and straightforward performance marketing? Which is the right strategy? And what is “waste”, exactly? Is it not telling your brand story in the long run or not generating leads in the short run?
Do you want to sell to our customer, or do you want your customer to fall in love with your story? Of course, one could lead to another but what’s the angle of your marketing materials and channels? It’s a bit of a catch-22 paradox. We have given this quite a bit of thoughtful time in AdRay’s meetings and coffee table conversations. Here’s my take on the dilemma.
It isn’t necessarily a binary choice. It’s a continuum where the spend can be skewed in favour of one over other. It all depends on if you treat marketing as an investment or a cost. If you treat it as cost, you are more likely to spend more on performance marketing. There’s nothing wrong about it but you need to keep spending money to bring in customers and it comes out more salesy than a brand conversation.
|Brand Marketing||Performance Marketing|
|Long term relationship is the key goal||Sales is the explicit goal|
|High Customer Acquisition Cost(CAC) and High Life Time Value (LTV)||Low CAC and low LTV|
|Customers love it||Customers might find it annoying (But it works like a charm when there’s a slight intent to buy)|
|Eg: Creating an integral style guide, experience design, loyalty programs, content marketing, event sponsorships||Eg: Webinars, Discounts/Promotions, Influencer/affiliate marketing, Search Engine Ads|
If you are lucky enough to be part of an organization or team with a vision, it’s critical to spend equally on both fronts to balance out the life time spend on marketing. Remember, we remember and love Amul girl, not because of their sales promotions. Here’s my favourite quote from a favourite marketer.
“There isn’t any significant difference between the various brands of whiskey, or cigarettes or beer. They are all about the same. And so are the cake mixes and the detergents, and the margarines… The manufacturer who dedicates his advertising to building the most sharply defined personality for his brand will get the largest share of the market at the highest profit.” – David Ogilvy
There’s no universal right answer but I hope this helps you realize where you are today and if that’s by deliberate choice. You can choose to invest in brand however small you can today for it’s a critical building block for tomorrow.
Talk to us for Brand Consulting that starts at $800 for start-ups! (See how we brought in the performance bit after brand 😊 )