Brand vs Performance Marketing: An explainer with examples

Remember this infamous quote?

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." - John Wanamaker.

Performance marketing has seemingly solved this difficulty, and as a result, over the past 20 years, it has become the dominant approach brands use to connect with consumers.

However, as marketers are now discovering, you can be great at performance marketing, and your brand sucks because you've lost sight of your brand narrative.

What is Brand Marketing?

Brand marketing encompasses brand-building activities to enhance customer awareness, attitudes and affinity for a brand.

Brand Marketing Examples:

• Brand awareness campaigns
• Public Relations
• Branded podcast
• Novel packaging
• New products
• Distinctive services
• Innovative distribution
• Loyalty programs

 Brand Awareness campaign example, Sirena Tuna.

Branded PR example, Zero Co

What is Performance Marketing?

Performance marketing can be defined as paying for results from marketing campaigns like clicks, leads and sales conducted through third-party channels such as websites, search engines, and social media sites. It enables companies to run highly targeted marketing campaigns that deliver a measurable return on investment.

Performance Marketing Examples:

• Display ads
• Google Ads
• Meta Ads
• LinkedIn ads
• Affiliate marketing

Programmatic display advertising example, Three Birds Renovations on SmartCompany.

LinkedIn sponsored post example, GWI.

Brand vs. Performance Marketing Tug of War

Brand building has been considered a long-term investment, while performance marketing can generate short-term results here and now.

However, as we are now discovering, these short-term results can come at the cost of long-term brand equity.

In August 2023, Airbnb's Chief Marketing Officer announced that the brand is ditching performance marketing in favour of big, bold campaigns. 

In an interview with The Drum, CMO Hiroki Asai commented: 

"As Airbnb was growing, pre-pandemic, it was losing its differentiation. There were a lot of competing options for travellers out there, and Airbnb was losing its uniqueness. It was losing its sense of brand and who it was." 

Airbnb's latest brand-centric campaign, "Get an Airbnb," aims to put the brand back in focus and communicate Airbnb's point of difference.

How should marketers manage the tension or trade-off between brand and performance marketing?

1. Start with brand marketing

I'm a brand marketer through and through. No one in the history of consumer goods will buy a private-label Vegemite alternative; that's the power of a brand.

Nike, Patagonia, Duolingo, Oatly, and LEGO favour brand marketing and all these examples are well on their way to being considered Lovemarks. Customers will (and do) pay significantly more for these brands. 

2. Like everything in marketing, it's not one or the other, but both.

The best marketers can deliver short-term sales while also thinking long-term. 

Enter brand-friendly performance marketing. 

This means that all activities must align with the overarching brand strategy. I've worked with performance marketers who wanted to try things that may have delivered great short-term results but would have diluted my brand. What are the golden rules that apply to your brand? Those should never be compromised.

A great example of brand-friendly performance marketing.

3. Make brand marketing efforts measurable.

Brand building is losing out more and more, mainly because performance marketing is considered to be more measurable.

Measuring brand affinity, equity, and awareness has always been challenging, but it's not impossible. Since investing in brand-building activities, we've noticed that an increasing number of people are searching 'Campaign Del Mar' in Google, and we can monitor this search volume.

Apart from metrics like website traffic, audience growth and subscribers to our database, we also experienced a significant uplift in podcast interview requests and guest masterclass invitations during our brand-building phases.

Does your industry make a difference when deciding on brand vs. performance marketing?

Yes and no. It's not everything, but it's something.

There is a myth that e-commerce brands should solely focus on performance marketing, and I'm afraid I have to disagree. It is far too easy for a competitor to create a lookalike product and undercut you. While e-commerce brands should invest in performance marketing, they should not overlook brand marketing.

Professional service brands have a longer buying cycle and rely on customer trust. As a result, brand marketing is more important for service-based businesses than performance marketing is.

However, the brands that enjoy the most success are the ones who question the 'rules' and write their rulebook. Why can't an e-commerce brand prioritise brand? Why can't a professional service firm try performance marketing?

Marketers are constantly looking to balance priorities. We can't do it all, so difficult decisions must be made. Instead of choosing between brand and performance marketing, marketers should look to create brand-friendly performance marketing and invest in building valuable brands.