As economists continue to debate the possibility of a recession, business leaders are taking steps like layoffs and budget cuts to protect their company in a worst case scenario. Executives are under pressure to justify where their dollars are spent and demonstrate the returns on their investments. Within the marketing space, I’ve seen executives prioritize CMO candidates with performance marketing backgrounds over more traditional brand marketing.
It’s a common trap business leaders fall into. When budgets are in flux, it’s natural to focus on the things that have an immediate financial impact and pull back on activities that are more difficult to connect to immediate revenue or have a longer term impact.. Performance marketing is easily measured, making it more accountable to business results and easier to see how a company’s spent marketing dollars connect directly to the top line.
But economic uncertainty is felt both ways, and just as businesses pull back their spending so too are consumers. Today’s consumers are savvier than ever—they can tell when brands only see them as dollar signs and aren’t afraid to switch up who they shop with. Faced with higher customer expectations, dwindling customer loyalty and stiffer competition, executives need to place as much emphasis on investing in brand marketing as they do with its performance-based counterpart.
Connecting with your audience is only going to get harder
To make the case for why brand building deserves equal footing as performance marketing, look no further than shifting consumer behaviors and changes in marketing technology.
As consumer privacy takes centerstage, expect ad targeting to become less effective and more inaccurate. Meta, for example, recently removed marketers’ ability to target underaged users based on their in-app activity. Similarly, Google is moving forward with plans to deprecate third-party cookies, significantly restricting the kind of user-behavior data marketers have access to to inform their ad campaigns. That’s not to suggest that limited user data will spell the death of performance marketing. But it’s safe to say these tactics won’t generate the same type of measurable returns as they once did.
How consumers shop and perceive brands are also driving home why customer loyalty and brand image are vital to long-term business growth. Ever since the pandemic, consumers have more choices and are less brand-loyal than ever before, ready to walk away from brands that consider them only as a walking wallet. Put in financial terms, the brands that demonstrate they truly get their audience and create value in consumers’ lives are nearly five times more likely to outperform the brands that don’t on customer lifetime value.
Brands that fixate on short-term conversion goals can quickly lose sight of the longer-term branding initiatives that turn single buyers into lifelong customers. Executives treating investments as a brand versus performance marketing conversation are missing the point that businesses need both to grow now and in the future.
Your brand is the deposit in the bank
If performance marketing concerns itself with the short-term results, then brand marketing is all about the infinite game. Brand marketing is about more than crafting an image or amplifying a company’s message; it’s also about building trust to create meaningful, lasting relationships with your audience.
Another way to think of brand marketing is it’s the deposit in the bank that makes everything else easier.
When brands invest the time and resources to increase awareness and recall, it takes less work to convert and retain your target audience. Sometimes that means starting with getting your name out in public, much like what Salesforce did when they launched their “We Bring Companies and Customers Together” campaign back in 2019. While Salesforce’s billboards and digital ads aren’t directly tied to leads generated or deals closed, it earned them even more brand recognition and arguably more brand affinity, so when businesses were ready to become customers, Salesforce was top of mind.
The good news is plenty of executives recognize the real impact brand building can have on their company’s bottomline, with 66% of business leaders saying increasing brand reputation and loyalty is a top priority according to The 2023 State of Social Media report. The ability to tell a brand’s story or craft a cohesive identity all go toward fostering a positive experience that helps consumers feel more emotionally connected to a brand, a strategy that 56% of executives say brings their brand a competitive advantage.
Social media specifically gives marketers an opportunity to cultivate those emotional, authentic connections that lend themselves to meaningful customer experiences. In fact, 94% of business leaders believe social insights have a positive impact on increasing brand reputation and loyalty.
When Southwest Airlines learned one of their passengers (a first-time Southwest customer) always wanted to be a flight attendant, they surprised him halfway through the flight with his own wings. With over one million views on TikTok and hundreds of commenters expressing their love for the airline, Southwest created a memorable experience that’s likely gained them a new customer for life—without pushing a ticket promotion.
Level-set to ensure brand marketing doesn’t get left behind
Perhaps the biggest hurdle plaguing marketers today is justifying the financial and time cost associated with brand building. That challenge becomes twice as hard during times of economic instability when chief financial officers (CFOs) are scrutinizing the return on investment of every dollar spent.
One way marketing executives can mitigate this roadblock is by nurturing their relationship with their CFO. Take the time to understand what’s important to them, what key financial performance metrics they’re watching and what they hope to see from you as a marketing executive. Learning to speak the CFO’s language can also help contextualize why you’re investing in brand building efforts and how those initiatives contribute to revenue but also the bottom line. Instead of sharing your impressions goals with your CFO, show them how social is a cost-effective alternative to billboards or radio ads at generating awareness. A television commercial, for example, can easily run marketers tens of thousands of dollars whereas lo-fi social content as simple as a screenshot or photo dump can go viral overnight.
Establishing this relationship early on not only gives you access to the funding the marketing team needs but also allows you to try new ideas because you’ve built up trust between you and your CFO. When you ask executives to invest more in brand over demand, you’re asking them to take away from the activities that drive immediate financial results for something that requires a big picture perspective. Demonstrating a balance between the tried-and-true strategies and bold branding moves, and a willingness to be flexible when goals fall short, will give you access to the resources you need to keep brand marketing a top priority.
Sustained growth requires short and long-term plays
When executives treat marketing investments like an “either or” tradeoff, they risk setting their team up for failure—even if, in the here and now, there’s signs of profitability. Focusing solely on performance marketing may generate revenue today, but can weaken demand generation and loyalty efforts over time. On the flip side, going all in on brand building can be expensive and slow to return the results executives expect.
For sustainable business growth among economic uncertainty, intense competition and discerning consumers, executives need to invest in a balance of both performance and brand marketing. And for marketers, there’s a need to rethink how soft metrics like awareness and loyalty are quantified to ensure brand marketing isn’t left out of the conversation. Customer loyalty is at a premium more than ever before and executives serious about maintaining their competitive edge need to place as much value on brand marketing, or risk being left behind.
For more insights on how executives see social fueling their business goals, as well as the technologies needed to inform their decision making, download The 2023 State of Social Media Report today.
6 marketing priorities leaders will obsess over in 2024Published on December 12, 2023 Reading time 8 minutes
How to build your social media team for the future of marketingPublished on November 29, 2023 Reading time 14 minutes
CMOs: What will you do to remove social team silos in 2024?Published on September 25, 2023 Reading time 4 minutes
Unlocking org-wide impact: The benefits of a social media center of excellencePublished on July 17, 2023 Reading time 8 minutes