The “brand marketing versus performance marketing” debate has been lighting up DTC Twitter for most of Q4. So who is right?
This content first appeared in the No Best Practices newsletter on 1.1.2023.
The “brand marketing vs performance marketing” debate has been lighting up DTC Twitter for most of Q4. If you’ve ever been told “that’s not on brand”, or if you’ve struggled to stand out in a sea of “blanding”, then you probably have a dog in this fight.
My perspective on this debate? It depends. Like most of marketing’s most contentious arguments, this one comes down to two factors:
- Having a clear understanding of what you’re trying to accomplish.
- Having realistic ROI expectations for your chosen strategy.
Almost two decades of easy money have created a generation of founders and executives with weak strategic muscles and wildly unrealistic expectations. By the time you finish this newsletter, the “brand vs performance” debate should be put to rest.
The Customer Purchase Journey
The customer purchase journey is real, but it’s also misunderstood. To get on the same page, here is how I typically break down the stages of the purchase journey:
Some common misconceptions:
- Some (maybe most) members of your Total Addressable Market will never buy from you.
- You don’t have to advertise at every stage of the journey to close a sale.
- A customer can enter this journey at any stage; ie they can go directly from “in TAM” to “Meeting Objections”.
There is one component missing from the chart, because it’s impossible to plot linearly: a person will not convert unless they’re “in market”. That means they have the ability and willingness to spend money.
Wealthy consumers might always be “in market” for purchases under a certain AOV threshold–they don’t think about spending $20 or $50.
And strong emotional motivation can push consumers “in market” even when they don’t have the cash up front (ex. putting T-Swift tickets on your credit card…if you can get them).
How Advertising Works
Different advertising tactics work better at different stages of the buyer’s journey. The closer you are to the top of the chart, the more liberty you have to define the conversation. Top of Funnel advertising is where you go wild with aesthetic photo shoots and talk about your esoteric brand values.
Side note: I expanded on “how does advertising work” in this post.
If you’re targeting the bottom of the chart, you’re joining a conversation that is already in progress.
If you were at a party, would you just burst into a circle of people and start talking about yourself? I hope not…
You would probably hang out on the periphery until you could suss out the topic of the conversation, then figure out a way to work yourself into the conversational flow.
At the bottom of the funnel, the consumer has already defined their problem. They have a handle on what product attributes add value, and what feels like a reasonable price.
To succeed, you need to frame your offering within these existing parameters. And that is why successful “direct marketing” usually follows a pretty standard playbook:
- Straightforward and direct language that highlights product features/ benefits.
- States the customer’s problems in his/her own words.
- “Social proof” like 5-star reviews, user-generated content, and prestige press.
- “Ads that don’t look like ads” to build trust with the viewer.
This playbook can have the effect of flattening or eliminating some of a brand’s differentiators. And that is why the brand marketing crowd pushes back on it so hard.
To a certain extent, I agree. If a brand is not differentiated, then what’s the point? But that doesn’t mean I think the conventions of direct marketing are bad, or that they harm a brand’s reputation. Here is why…
Cash (Flow) Rules Everything Around Me
When you speak to the top of the funnel, you get to define the conversation. But there is a trade-off: the payback period on your advertising investment is longer, more variable, and harder to measure.
Think about a billboard: one viewer may be ready to buy from your category, see your ad, and walk right into your store. Another viewer may not be aware that your category exists, but seeing the ad kicks off a six month process that eventually leads to a sale.
If you’re starting a brand from scratch and self-funding, you probably can’t afford to launch via billboard (or similar top of funnel media) alone. You would run out of money.
That is where lower funnel marketing is so powerful. You’re speaking to qualified, high intent buyers. If you can convince them that you are the best option, you can win the sale with some cash to spare. Of course, to do this, you have to follow the rules. And that often means softening or eliminating some aspects of your brand guidelines.
Facebook Ads are the perfect example. It’s no secret that “ads that don’t look like ads”, especially UGC-style testimonial videos, often blow other creative formats out of the water when it comes to advertising efficiency.
These videos are often shot on an iPhone, feature a person speaking directly into the camera, and feature shots of that same person’s hands holding or using the product. That doesn’t mean these videos have to look exactly alike. And it doesn’t mean that they have to be butt ugly.
Here are some examples of more “elevated” UGC from Sakara and Jenni Kayne.
When Things Go Off The Rails
When this debate pops up on Twitter, it usually gets heated because each side is speaking from a separate frame of reference. The head of growth at a bootstrapped eCom startup is going to have different priorities than the SVP of Marketing at a national insurance company.
Twitter debate is fun, but where this debate actually causes the most pain and frustration is when it pops up IRL. And that usually happens for two reasons:
- Lack of strategic context–the person calling the shots doesn’t really understand the marketing funnel or a specific channel’s role in the funnel.
- Unrealistic expectations–the person calling the shots expects Facebook, and eCommerce in general, to perform like we’ve turned back the clock to 2015.
This might be hard to hear, but we’ve been playing the eCommerce game on “easy mode” for the past two decades. The less awareness a leader has of this fact, the less realistic that leader’s expectations are likely to be.
Accelerating adoption of internet and mobile devices turned more people into online shoppers–that growth has leveled out. Historically low interest rates gave more people more spending money–that’s about to change. And social networks gave away free traffic to drive user adoption–that still happens sometimes, but it never lasts.
You can’t have it both ways–you can’t run esoteric and hyper-branded Facebook Ads, use Facebook as your only marketing channel, and expect a ROAS of 2 or 3x.
It’s not 2012 anymore, when you launched your eCommerce store. You can’t run the same playbook in a much more challenging environment and expect the same results.
It’s not 2014 anymore, when you launched your VC-backed DTC startup. You can’t build a profitable business from one ~viral~ video, tons of paid social spend and the promise that “we’re cutting out the middle man” (lol).
2023 is the year that marketing fundamentals are back, baby! Customer insights, deep channel knowledge and direct marketing chops are your recipe for success.
Bumping Into The Glass Ceiling
I wanted to address a spinoff of the “brand vs performance” debate, where some folks assert that brand marketing is unnecessary. No matter how broad, unique, well-priced and useful your product is, you will eventually run out of low-funnel demand. At this point, you” be forced to speak to earlier stages of the purchase journey.
If you’re 100% dedicated to being a Facebook Ads-only brand, you would move up the funnel like this:
- Meeting Objections: product features & benefits ads
- Consideration: person/problem/product ads speaking to different customer use cases
- Awareness: edu-tainment ads pointing to landing pages with a really strong welcome series to convert buyers who need time to think it over
- In TAM: Facebook ads with higher funnel objectives like traffic
The question–is the above brand marketing or performance marketing? I would argue that edu-tainment and video advertising can qualify as brand advertising. In fact, you’ll have better long term results with a consistent voice and POV.
Unless you’re lucky enough to have a true technological moat enforced by a patent, someone is going to come along and knock you off at a lower price.
To counteract that, you have to move beyond features and benefits marketing. Some of the biggest “direct marketing only” brands out there do have a true, patent-enforced moat. Do you?