In a moment where marketing effectiveness is under increased scrutiny, brands are weighing up where to focus investment and how the budget should be split.
For some marketers the decision is clear. Some 14.9% of the 1,610 brand-side marketers surveyed for Marketing Week’s exclusive Language of Effectiveness survey say their organisation focuses solely on brand marketing.
In contrast, 8.6% say their main focus is on performance marketing.
When it comes to finding the right balance, 27.6% of the sample blend both brand and performance, with a focus on brand marketing. Some 23.7% mix both, with a skew towards performance. A further 22.1% blend both brand and performance equally.
When explaining why they focus on brand marketing, marketers talk about the importance of mental availability and being top-of-mind in buying situations, as well as their understanding of the long-term benefits and ambitions to be “distinctive”.
For those marketers who skew towards performance marketing, the respondents identify the need to “justify marketing spending against generating sales income” and demonstrate campaign ROI to senior leaders in the business.
With performance marketing known for yielding shorter-term results and ticking ROI boxes, 34% say marketing spend and success is easier to justify and quantify when focusing on performance as its more “measurable”.
However, 21% of respondents say an awareness of the long-term benefits of brand health is their reason for focusing on brand.
Airbnb is one brand to have cut back on its performance marketing spend of late, with the company sharing last year it had cut its sales and marketing spend by 28% year on year to $229m (£163m).
Likewise, earlier this month Expedia signalled it was moving away from performance marketing in favour of building loyalty among its customers.
Moving towards “longer-lasting direct relationships with loyal high-lifetime value customers”, the travel booking company said its loyalty members had driven approximately three times the gross bookings per customer, more than twice the gross profit per standard customer and twice the repeat business when compared to non-members.
In contrast, last month Cazoo announced it was switching up its brand and performance marketing split, as the company undertakes a “business realignment”. The online car retailer plans to increase its performance marketing spend by two-thirds, while pulling back on brand investment.
“As we focus more on capital preservation, cash management, [and] moving towards profitability, performance will be a significantly larger part of our outgoing spend,” said Cazoo CFO Stephen Morana. The company increased its marketing spend by £45m in the first half of 2022, while focusing on brand.
This week Marketing Week will publish a series of features drawing on this exclusive data, including a piece exploring in greater detail the balance between brand and performance.