Are the lines between performance marketing and brand-building blurring?

Decoding the evolution of performance marketing and its impact on brand building.

With the advent of digital devices and social media platforms, performance marketing has become a dominant marketing approach, especially for new-age brands and marketers. The approach enables companies to run highly targeted marketing campaigns that deliver measurable ROI thus resolving a great deal of issues for marketers and the management of brands.

However, in a recent panel discussion on Has Performance Marketing Overtaken Brand Building?, as part of the eighth edition of afaqs! Digies, experts debated about the importance of brand building in an era obsessed with numbers and returns.

The panel was moderated by Sreekant Khandekar, CEO and co-founder, afaqs! and included Ankit Banga- chief business officer at FCB/SIX, Priyanka Bisen Shah- head of digital marketing at Bajaj Auto, Jiteen Agarwal- head marketing at Hettich India, Binda Dey - CMO of Knight Riders Group, Aabhinna Suresh Khare - chief digital and marketing officer at BajajCapital, and Chetan Asher, founder and CEO of Tonic Worldwide.

According to the experts, an approach where performance marketing and brand building work in synergy is the need of the hour.

Jiteen Aggarwal asserts that while performance marketing is universally effective, for products requiring careful consideration, such as his own, brand marketing takes precedence. He emphasises that building brand consideration is essential, as it fosters long-term customer relationships beyond the immediate transactional focus of performance marketing.

Meanwhile, Binda Dey underscores the enduring significance of brand building. She says that Knight Riders allocates a mere 10% to performance marketing and the brand's primary focus remains on cultivating and nurturing its legacy.

Chetan Asher further proposes a balanced approach, advocating for a 60:40 ratio between brand building and performance marketing. According to him, this is a sweet spot for any brand trying to make it big today.

Will performance marketing become about the ‘brands’ in the future?

With audiences spending most of their time on mobile phone devices and engaging with each other on social media, it is important for brands to strike a balance between performance marketing and brand building even on digital, say leaders.

Ankit Banga further emphasises the historical perception of digital marketing as purely performance-driven. “The perception about digital is that it is purely a performance medium. Even today 70% of digital is for performance marketing. However, with CTV coming in, the brand-building factor has started picking up,” he says.

“At the end of the day, the marketer needs to show the ROI. The short-term goal is to harvest the ad spends. But if you want to go beyond that, you need to invest in brand building. People burn much more than what they get on performance marketing after a certain stage. However, if you have a strong brand you will find that the same amount of investment is giving you much more,” explains Jiteen Aggarwal. 

Shah of Bajaj Auto supports their views, stating that tech giants like Meta and Google are also investing in cross-medium studies to measure brand impact accurately.

“We have been working very closely with brands like Samsung and MIQ about brand building on their platforms. I think even the big tech companies like Meta and Google have realised the pain point of marketers. Meta has recently introduced a cross-medium study and has partnered with Kantar. So the top-of-funnel can also be measured today. So brand building is also getting more and more measurable by the day,” explains Shah.

Aabhinna Suresh Khare further adds that brand building has always been about performance as well. “The only drawback was the result used to come in late. With the user spending 6-8 hours on a little device, and with AI coming in, brand building is going to be the only way left to perform,” he states.

We would also like to thank our Presenting partner, JioCinema for their support at afaqs! DIGIES Conference & Awards.