OPINION Brand versus performance – how should marketing spend be allocated?

Written by Adam Freeman, managing partner at digital marketing agency MediaVision.

The title of this article is something of a trick, and I use the word ‘versus’ within it to make a point: the debate between brand and performance marketing is outdated and needs to change. It’s no longer an either-or proposition. Instead, businesses – and financial services brands in particular – need to understand how both strategies work together, and how to refine budgets accordingly.

That starts by understanding that, at a basic level, people are looking for two different things online – either your brand and the products that you offer, or they’re searching for a generic product and don’t care so much about which brand sells it. This means that the two different types of customers need to be targeted with different marketing strategies.

In the financial services industry, where many products are quite similar, non-brand search is a growing trend, and a likely response to the cost of living crisis which has squeezed consumer spending and made everything about price (see chart, below).

In many ways, this makes brand advertising even more important in order to differentiate your offering from competitors, but such investments need balancing with performance marketing.

Budgets should therefore be allocated into different pots: one about pure brand, telling stories about your business which might not necessarily provide an immediate return, but can have a positive impact on everything you do; and another pot for acquisition, which can be achieved by investing in price aggregators and display ads to ensure visibility when someone is actively looking to make a purchase.

Sounds straightforward, but what seems to be neglected, is that optimising both brand and non-brand requires a third budgetary consideration: search.

For brand marketing, search engine optimisation (SEO) can help a company establish brand awareness and recognition by ensuring that their website ranks highly for relevant keywords and phrases that are associated with their brand. While for performance marketing, SEO can help drive traffic and leads to a company’s website by targeting keywords and phrases that are relevant to the specific products or services they offer.

This makes SEO particularly important, yet it can sometimes be neglected in budgetary planning, or seen only as a ‘hygiene factor’ rather than a strategic necessity.

A new perspective 

Budget allocation might be better managed if more brands also understood the impact tracking share of search (SoS) can have on their business.

For example, as evidenced by one the UK’s top marketing consultants, SoS has now been proven to act as a reliable proxy for market share, while also acting as an early warning system because it precedes the data it proxies, sometimes up to a year ahead.

This is important because, coupled with the fact that all forms of advertising impact SoS, it means businesses can see the effects of their marketing spend sooner and therefore tweak it to help manage its performance.

Given the economy is experiencing so many shocks and bumps, it’s important to ensure marketing spend is fine tuned to match consumer needs and behaviours.

The multiplier effect

Indeed, with historically high levels of inflation impacting consumer spend, customers are becoming more tactical, increasingly shopping around and seeking advice and reassurance. That means organic search rankings and website traffic are extremely important so that potential customers are able to find the information they need to make the most informed decisions about your products and services. In short, the conditions are ripe for taking share from competitors.

For the financial services market this has three distinct elements marketers should pay attention to. First, if a brand is not visible it is going to lose out on revenue opportunities today while finding it harder to improve a Google ranking in future.

Second, because non-brand product search is also a good way to bring in new customers, securing them during a cost of living crisis makes them highly valuable marketing targets during an upturn.

Third, and most importantly, there is a unique ‘multiplier effect’ in organic search not present in pay-per-click (PPC) advertising.

Because the organic search results at the top of Google get the most traffic, when a market grows again post-recession, or if products and services are largely indistinguishable (such as a fixed-rate mortgage), those high-ranking businesses will stand to multiply the benefit.

For example, if a market is indexed at 100 today, and in three years it indexes at 150 because it has grown by 50%, the businesses in the top ranked search positions stand to gain the majority of that growth because that’s where the majority of the traffic resides.

Businesses that do not allocate resources towards improving their organic search ranking will face significant challenges in regaining a top position on search engine results pages.

So with at least some glimmers of better economic conditions on the horizon, now is the time to ensure everything is in good order. That means allocating budgets smartly and strategically to stand out and gain the competitive advantage in the long run. And it means understanding how the different strands of digital marketing have evolved in the last year so that they can be used to best effect.