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Are Branding and Direct Marketing that different?

I read an article yesterday on Branding through Search Marketing that struck me as odd.

The point of the article seems to be: “Spend money without ROI for brand building. If you don’t, you might lose out to your competitors who do…”

Call me naive, but I’m pretty sure that the goal of branding is ROI, just like direct marketing. We call it “branding” rather than direct as an acknowledgment that the ROI may be harder to measure, and may not come immediately. Ultimately, wasn’t the Aflac Duck supposed to generate sales for Aflac? I think so, and while they couldn’t tie the revenue directly to the commercial that generated it, they could see the increased marketing spend at least correspond to an increase in revenue and market share.

Many of our well-known clients have some branding initiatives within their PPC program. Indeed, I’ve always argued that if you’re going to spend money for brand building, there’s no better place to spend it; you’re “branding” to the very people who shop for your products and services when they’re in their most receptive mode, inquiring. Seems like a better buy than TV ads where folks might be at the refrigerator or in the bathroom when you make your pitch.

However, these clients pick and choose where they brand and how much they spend with a great deal of thought and care. Which keywords make sense as “brand defining”? “By Golly, I want to be number one on ‘widgets’!” Cool, but if your real strength is “High-speed widgets”. It might be more cost effective to spend the extra branding dollars on that more targeted traffic. And is “number 1″ the right place, or does it depend on the cost? How much are you willing to invest in branding on this particular term or class of terms?

These are the discussions we have with our clients.

At Shop.org last week, John Lazarchik of Petco discussed some interesting tests they are conducting with Display Ads. They understand that tracking the sales generated by this channel won’t be easy or direct, but they don’t buy that branding impressions are always worth the cost, either. They’re increasing Display Advertising dramatically for a period of time but excluding certain regions covered by about 100 of their physical stores. They hope that this test will give them a sense of how much incremental foot traffic is actually driven by display ads.

This is branding with brains.

While my esteemed colleague at IProspect is certainly right that many companies are left in the dust by underspending on marketing, it’s also true that many companies “brand” themselves into Chapter 11 by spending marketing dollars recklessly.

A good rule of thumb is to keep a close watch on the overall marketing spend as a percentage of top line sales. Increases in any form of marketing need to show up in proportional growth in the top line. Maybe not immediately, but the more time a company allows for the top line to “catch up,” the narrower grows the financial ledge they’re standing on.

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Comments
4 Responses to “Are Branding and Direct Marketing that different?”
  1. A lot of old school marketers believe that branding is separate from ROI on campaigns. Regrettably it’s what they still teach in University and College courses as well, and I think it holds valid for certain conditions.

    Example: A few years ago I was working for a massive entertainment company. Their goal was to get brand recognition, but they already had a huge grasp on the market. So they launched a lot of bizarre campaigns that wouldn’t directly result in conversions/ROI, but it did net them a huge amount of viral marketing exposure.

    But unless you are a multi-million dollar company that can afford to blow $300k on something like that, it’s usually more effective to focus on ROI until you can splurge your budget.

  2. George Michie George says:

    Good point, Christian,

    Yep, far be it from me to criticize the marketing plans of huge, profitable, growing firms. Ultimately there is “hit and miss” in branding just like direct. The key is to make sure the marketing budget (brand, direct, retention, whatever) doesn’t exceed some reasonable fraction of revenue, and that you spend money on those efforts that provide the best ROI first.

  3. I absolutely agree with your post, and am continually fascinated (and somewhat befuddled) by marketers’ willingness to presume that ‘brand’ matters, and then go about trying to apply their beliefs to new technologies, cultural trends, etc.

    Ultimately, the point (as you say) is to prompt sales, and motivating people to that goal requires being aware of, and relevant to, their behavior. Search isn’t a place for branding, per se, as much as a challenge to the very preconceptions of brands (in fact, in my book BRANDING ONLY WORKS ON CATTLE, I devote an entire chapter to the topic, which I title “Search is the Anti-Brand”).

    Context, utility, and causality matter when it comes to people grasping and using information, so I say that focusing on these qualities will help marketers build a new model for brands online (whether due to search, social networks, the combination of the two, etc.).

  4. Jonathan, thanks for your comment. I look forward to reading your book!

    Some Direct Marketers worry that the Big Brand Advertisers will some day take over PPC Advertising, just ’cause they can.

    I actually think the opposite will happen. As the big brands dabble with Display Ads and are able to track what they’ve never tracked before, they may start thinking more and more like direct marketers.

    Thanks again!