Stop splitting brand and performance

This newsletter comes from the hosts of The Marketing Architects, a research-first show answering your biggest marketing questions. Find us on Apple Podcasts or wherever you listen to podcasts!

 

This week, we're talking marketing effectiveness with WARC's Head of Advisory, Lexi Wolf. She shares new research on why the brand vs. performance debate needs to end, and how combining both actually produces better ROI. 

—Elena  

 

The median ROI improvement from adding brand work to performance marketing is 90%.     

According to WARC's research with Analytic Partners, shifting from performance-only to a mixed brand and performance approach can deliver total revenue ROI improvements ranging from 25% to 100%. 

 

Breaking down brand x performance.              

Marketers have traditionally split advertising into two distinct jobs: brand-building and performance marketing. This separation is hurting effectiveness. Lexi shares why: 

1. Brand and performance work together. WARC's research found that winning organizations are doing both brand and performance marketing together because the two types of marketing benefit each other. It's not brand OR performance. It's brand TIMES performance.
2. Strong brands expand the entire funnel. Data shows that brand equity drives positive outcomes at every stage, from awareness to advocacy, making every marketing dollar work harder.
3. Cutting brand work is costly. Organizations that shifted from a balanced approach to performance-only saw a 40% median decline in ROI.
4. Brand building strengthens pricing power. Strong brands can charge premium prices, making customers less sensitive to price increases—especially valuable during inflation.
5. The "doom loop" is real. When marketers focus solely on converting in-market customers, growth plateaus. Without bringing new customers into the funnel through brand building, long-term effectiveness suffers. 

Breaking down organizational silos is key. At minimum, three out of every ten advertising dollars should go toward brand building, but the most effective advertisers dedicate 50% or more of budgets to brand initiatives. 

Listen in on our discussion.

 

“In the U.S., It's Time to Talk About Marketing Effectiveness”    

This article from WARC explores why American marketers don't revere effectiveness experts the way they should and explains how the US marketing industry differs from other markets in its approach to effectiveness. 

Read the article.

 

 

 

It’s all about the multiplier effect.           

“The multiplier effect means an investment in brand is an investment in performance." 

— Lexi Wolf, WARC Head of Advisory, Americas