The juggling act: Balancing brand and performance marketing for sustainable growth

In the world of marketing, few things are as tricky as finding the perfect balance between brand marketing and performance marketing. These two forces—one focused on long-term brand equity, the other on short-term measurable returns—often seem to be at odds with each other.

The marketer’s challenge? Ensuring both types of marketing work together to fuel sustainable growth.

The tension between these two approaches isn't just academic. In fact, research has shown that strongly branded businesses enjoy 31% higher profit margins than their weaker counterparts.

It's clear: the balance between brand and performance marketing isn't optional; it's a necessity if brands are to thrive in an ever-changing, hyper-competitive landscape.

Understanding the divide

Brand marketing is the emotional glue that binds a company to its audience. It’s about telling a compelling story, building trust, and nurturing relationships.

Think Coca-Cola’s ‘Share a Coke’ campaign, which effortlessly connects with people on an emotional level, making them feel part of something bigger. The metrics here are about building recognition and sentiment—measuring brand recall, share of voice, and emotional connection.

On the other hand, performance marketing is all about precision. Using data-driven tactics, marketers target immediate actions like purchases or sign-ups.

This is where the likes of Google Ads and Meta dominate, as billions are funnelled into campaigns that are designed to yield immediate, measurable results. With global performance marketing expenditure topping $120 billion in 2022, this approach isn’t just trendy; it’s the backbone of modern marketing.

While the two seem worlds apart, they’re intrinsically linked. Performance marketing needs brand-building efforts to work. After all, what good is a PPC ad if no one recognises or trusts your brand?

An FMCG giant found itself pouring large sums into advertisements, but engagement was flagging. By blending purpose-driven advertising—such as campaigns focusing on sustainability—with performance marketing, the brand saw a 15% increase in sales and a 25% improvement in customer sentiment. It’s proof that when brand-building and performance marketing come together, the results are not only tangible but credible too.

Why brand marketing can't be sacrificed

In today’s marketing landscape, where ROI is the be-all and end-all, it's tempting for marketers to slash brand-building budgets in favour of performance marketing. But as Nielsen’s research reveals, the opposite should be the case: spending at least 60% of the budget on brand building correlates with long-term revenue growth.

Just look at Apple. The tech giant doesn’t just rely on its product innovation; its brand is built on a foundation of trust, consistency, and high-quality marketing.

This brand strength has allowed Apple to charge premium prices and build loyal customers—customers who, according to Kantar, are willing to pay a little extra for brands they trust. In fact, loyal customers bring a 23% higher return on profitability per customer.

Underinvesting in brand-building, however, can lead to commoditisation. When price becomes the primary focus, loyalty takes a backseat. Over time, brands risk losing their differentiation, turning their offerings into mere price points.

Pitfalls of over-reliance on performance marketing

While performance marketing can deliver impressive short-term results, there are a few hidden dangers lurking in its wake. One of the most noticeable is the so-called ‘Race to the bottom’. When brands compete on price alone, margins are squeezed, and long-term brand equity suffers.

Startups, in particular, often rely heavily on paid campaigns for rapid growth, but as customer acquisition costs (CAC) rise, the challenge shifts from attracting customers to retaining them. Without a solid brand foundation, this becomes a vicious cycle that’s hard to break.

Moreover, performance marketing’s dependence on third-party data is becoming increasingly unsustainable. With privacy regulations tightening globally, companies that rely on cookies and third-party platforms risk losing valuable audience insights.

The solution? Embrace first-party data and integrate brand-building efforts to mitigate these risks.

Aligning brand and performance marketing

So, how do you bring these two worlds together? The answer lies in aligning objectives and metrics. While brand marketing KPIs—such as brand equity, awareness, and consideration—focus on long-term outcomes, performance marketing KPIs, like conversion rates and cost per acquisition (CPA), can drive immediate action.

In fact, an increase in brand awareness can lead to a higher click-through rate (CTR) for performance campaigns. The trick is to track branded search terms and see how they influence conversion rates. This integration of brand and performance efforts is made possible through advanced tools like Google Analytics 4, which allows marketers to measure both aspects of their campaigns effectively.

A leading SaaS startup was once heavily dependent on PPC campaigns, resulting in high conversion rates but sky-high customer acquisition costs. However, after investing in customer success stories and hosting webinars, the company saw a 20% drop in CPA, while organic traffic grew by 40% in just a year. By balancing brand-building initiatives with performance marketing, this startup managed to reduce costs and boost its long-term customer base.

There are several practices CMOs can embrace for achieving this balance effectively. For starters, they can aim for a 60-70% allocation to brand-building activities, with the remainder focused on performance marketing. This balance is based on industry benchmarks from Nielsen and proven to drive long-term growth.

They can also look at purpose-driven narratives. Brands like Dove have demonstrated the power of storytelling, aligning campaigns with consumer values. Purpose-driven branding builds trust and emotional connections that last.

Consistency is key. Tools like HubSpot help ensure a consistent brand tone across every channel—whether it's PPC ads or organic social media posts. Consistency helps reinforce brand equity while supporting performance efforts.

With an eye on annual planning, marketers can integrate long-term brand campaigns with tactical performance activations. A well-thought-out annual plan ensures you hit both immediate and long-term goals.

Data and technology: The game-changer

The role of technology in modern marketing cannot be overstated. The integration of brand and performance marketing requires technical sophistication, and tools like generative AI and predictive analytics are making this possible.

Generative AI, for instance, supports the creation of personalised content at scale, in line with brand narratives. Predictive analytics can also help marketers make smarter investment decisions by forecasting the long-term impact on brand equity.

As third-party cookies phase out, first-party data will become even more crucial. Platforms like Salesforce and Adobe Experience Cloud are leading the charge in helping brands shift to this new era, where insights are drawn directly from consumer interactions.

The future of marketing doesn’t lie in choosing one approach over the other but in finding the right balance between brand and performance marketing. By integrating both, marketers can create campaigns that resonate with consumers’ hearts while delivering the hard-hitting results businesses crave. It’s a fine art—one that, when perfected, can unlock the full potential of a brand’s growth.

- Gurtej Singh Chawla, associate vice president of corporate marketing at Xceedance Consulting India