Marketing Performance Meets Brand Building
As a data scientist, you are vital to unlocking new Business opportunities to drive growth and success through data. The rapidly evolving marketing landscape demands a fresh approach beyond conventional performance marketing or brand-building tactics. It’s time to embrace the challenge and take a holistic view of marketing strategies that combine both elements to create a comprehensive approach that drives actual results. As a data scientist, you also play the role of change agent and advisor to the business; you can make a transformative impact by helping to move towards a full-funnel marketing approach. Let’s learn more about it:
The marketing world constantly evolves, and businesses that fail to adapt to new realities risk getting left behind. The COVID-19 pandemic has caused a shift in consumer behavior, and companies must take a holistic approach to their marketing strategies to remain competitive. By focusing on brand-building and short-term conversions, businesses can create a more meaningful connection with their customers, foster brand loyalty, and increase long-term revenue.
Navigating the tension between these two areas can be challenging, particularly when they have historically operated independently within an organization. Businesses must find ways to integrate brand-building and short-term conversion tactics to create a comprehensive Marketing strategy that drives results. This requires building out measurement systems and corresponding KPIs.
In this article, I’ll provide insights to help marketers navigate this ever-changing landscape and build a successful marketing strategy that bridges brand-building and performance marketing so that the approach connects with customers on an emotional level (again).
What are we trying to achieve, and why should we focus on it now?
It’s a well-known fact that many CMOs shift their marketing spend toward the bottom of the funnel, where the capture of customers is easier to justify, especially in financially challenging times. However, by doing so, marketers often overlook the importance of brand-building and generating customer demand and attention at the top of the funnel. This mistake can be costly, erasing a brand’s emotional connection with its customers. I’ve seen this first hand, where the CEO would monitor sales hourly and ask for additional email sends, promotional, of course, day after day. In our yearly brand equity tracker, you can see the deterioration of the brand value and perception.
Overlooking the importance of brand-building is a costly mistake, erasing a brand’s emotional connection with customers.
Many brands have mistakenly focused only on the bottom of the sales funnel, which is about driving immediate sales or conversions. In contrast, more successful organizations have realized that it’s essential to focus on the entire funnel, including the upper and middle, which are more about building brand awareness and driving consideration for a product or service. This approach is called full-funnel marketing. It combines different teams, measurement systems, and KPIs to create a more cohesive and effective marketing strategy. With this approach, businesses can better understand how various marketing efforts work together to impact sales by looking across all stages, from consideration to customer journey conversion.
While full-funnel marketing is not a new concept, two recent significant changes in the marketing landscape make it essential for businesses to embrace this approach quickly:
- Companies see a plateauing or decreasing of returns on performance marketing due to inflation in digital media expenses and market saturation in targeted advertising segments. With the commoditization of automation tools, it’s becoming harder to gain a competitive advantage in performance marketing, making it imperative to adopt a full-funnel approach.
- The dramatic shift in customer behavior due to the COVID-19 pandemic has accelerated digital transformations. In this shifting landscape, customers’ expectations of brands have evolved, with many citing a brand’s purpose as a crucial factor in their purchase decisions. Marketers have access to a wealth of data on these new behaviors, providing an opportunity to understand customers’ decision-making processes throughout the funnel.
The impact of full-funnel marketing goes beyond just increased efficiency and ROI. It’s about understanding how each stage of the funnel impacts the others and the overall customer experience.
When customers feel an emotional connection with a brand, they are more likely to become loyal and spend more in the long run. Businesses risk destroying their brand and eroding customer loyalty by focusing solely on the lower funnel.
Leading organizations that have successfully adopted the full-funnel marketing approach include companies such as Coca-Cola or Nike. They recognize the importance of a holistic marketing strategy that combines brand-building and performance marketing to create a complete customer experience.
How do you integrate these two elements and optimize the entire funnel?
Developing a successful full-funnel marketing program requires prioritizing four essential elements. These are the foundation for driving business growth and success in a holistic and integrated way:
- Measuring Brand Building
- Focus on connected KPIs
- Evolve to New-Wave Media Mix Modeling
- Deploy Operating Model across the Funnel
Whether launching a new product, repositioning a brand, or seeking to achieve in-quarter sales targets, marketers must approach their marketing programs’ development strategically, and focus on customer engagement, brand loyalty, and measurable results. By adhering to these essential building blocks, marketers can create powerful and impactful marketing programs that achieve their desired outcomes. Let’s dive into each one of the four pillars.
1. Measuring Brand Building
In the past few years, there have been a lot of significant changes in the advertising world. Traditional TV ads have been the backbone of many campaigns to build a brand to last over time. Still, these efforts have been hard to track, making it difficult for marketers to get detailed information about how their campaigns have an impact. This is because traditional TV ads don’t have the same targeting and tracking options as digital ads. This is good news for marketers, though, because digital TV allows them to track who is seeing their ads in a more detailed way than ever before. Marketers are now able to display separate ads for the same show based on customers’ interests, demographics,s or any other attribute. As a result, ads are more relevant and personalized, ultimately making the campaigns more effective.
Additionally, there are new methods for measuring the success of brand campaigns that go beyond just basic metrics like how many people saw the ad and how often, focusing mainly on the reach of the advertising campaign. Today, the new data-backed methods can give marketers more insight into how their campaigns are performing, which can help them make better decisions about where to invest their advertising dollars. By combining these new measurement techniques with personalized ad targeting, marketers can create more effective and impactful campaigns that resonate with their target audience. Three specific callouts in the brand-building area:
A. Addressable TV and audio mean that TV and radio ads can be sent to specific households or people. With this technology, marketers can measure the effects of their ads in a more precise way and link specific ad exposures to actions that consumers take. In contrast, in traditional linear TV advertising, the advertiser chooses a network or a show to run the ad. Based on the product or service you’re trying to sell, panel-based research can help determine where and when to air your ads. The only way to figure out who your target audience is comes from general rules about which parts of the population are most likely to watch at that time. With addressable TV advertising, on the other hand, you might be able to show each target household a different, customized ad.
So, addressable TV works by putting together information about customers and matching it to their private IP addresses in a safe way. Marketers can learn a lot about their customers by keeping track of the devices they own and how customers use them across devices, including the websites visited, the times they watch TV, and, of course, the shows customers like.
B. Brand Impact Measurement & Surveys allow marketers to see how their campaigns affect consumers’ perceptions of their brand, focusing on upper-funnel measurement. In today’s world, consumers are more informed and aware of advertising than ever before. This means they are more likely to choose brands that share their values and that they have an emotional connection to. While advertising messages are essential, the emotional connection drives consumer behavior. By using surveys to measure the impact of their ads, marketers can better understand how to create messages that resonate with their target audience. This can help them build a stronger connection with consumers and drive more sales for their brand.
Marketing messages matter, but audience emotions drive consumer behavior.
Brand impact surveys can reveal how ads affect consumers. Brand impact surveys cover a campaign’s effectiveness by collecting data from digital, traditional, and hybrid touchpoints. Marketers can test social and display content in various formats and creative methods to evaluate their campaigns from start to finish, such as branded content and influencer marketing. A brand impact survey can determine if a media strategy is successful for brand building or a campaign.
These surveys reveal what people think and do using rigorous methodology, large sample sizes, and advanced modeling. Ad recall, awareness, and consideration can help brands measure campaign success. To determine each brand’s KPI, surveys usually divide control and exposed groups. This approach lets marketers make quick, informed decisions that affect brand perception.
C. Marketing Attribution allows for another integral way to measure brand campaigns. With these tools, marketers can figure out within a customer journey which ads led to which actions from customers. This lets them find a more direct link between seeing an ad and what a person does and measure how their campaigns affect key business metrics like sales and revenue—ultimately helping to determine and adjust marketing strategies across touchpoints such as advertising, email, social media, and more. These "correlated outcomes" don’t have consumer discrepancies like qualitative surveys.
2. Connected KPIs
As companies strive to maximize the effectiveness of their marketing efforts, linking key performance indicators (KPIs) between channels and stages of the funnel has emerged as a powerful way to understand better their campaigns’ real impact on actual business results.
Take, for example, a company that wants to drive more traffic to its website. By tracking social media engagement rates (likes, comments, shares) and website traffic, the company can determine whether or not its social media engagement is driving more traffic to the website. Suppose the social media engagement rate is high, but website traffic remains low. In that case, the company may need to adjust its social media strategy to drive traffic to the website more effectively.
Similarly, a company may use display ads to increase brand awareness and track the number of impressions served. By linking this KPI with search query volume, the company can determine whether or not the display ad campaign drives more branded search queries. If the display ad campaign is successful, the company may see an increase in branded search queries, which have a lower cost per click than generic product-category searches.
Email campaigns are another channel for companies to reach their target audience. By tracking email open rates and sales conversions, a company can determine whether or not its email campaigns are effectively driving sales. If the open rate is high, but sales conversions remain low, the company may need to adjust the email campaign to better target and convert potential customers.
When a brand advertises, it often uses multiple channels (like social media, email, or search engines) to reach potential customers at different stages of the buying process. Understanding which channels work best and which need improvement can be challenging.
A connected view across Key Performance Indicators (KPIs) can help marketers see how different touchpoints (like an email, an ad, or a website visit) work together to affect a customer’s purchase decision. By tracking KPIs across channels and stages of the buying process, marketers can identify the interactions that have the most significant impact on the business’s bottom line.
Once these essential interactions are identified, marketers can make better decisions about where to invest their advertising dollars to get the most impact for their money. By better understanding which channels and tactics are most effective, marketers can adjust or rebalance their marketing strategies to make the most of their budget and drive business growth.
With the right KPIs in place and a clear understanding of how they relate to business outcomes, companies can make more informed decisions and optimize their marketing efforts to drive greater ROI.
3. New-wave Media Mix Modeling
While media mix models (MMMs) have been a valuable tool for marketers to allocate their budgets across different types of advertising and marketing, they have limitations. One of the biggest drawbacks is their inability to capture short-term changes; for instance, changes in customer behavior like COVID-19 or changes in campaign outcome. This can make it challenging for marketers to make data-driven decisions promptly.
Leading organizations are modernizing their MMMs with additional inputs such as incrementality tests and multitouch attribution (MTA) models to address these limitations. Incrementality tests involve running a structured experiment with a control group of consumers who aren’t shown ads, providing real-time and granular data on campaigns to help marketers assess the true impact of their efforts and adjust the attribution for a channel accordingly. Recent advances in technology and analytics have made it easier and cheaper to run tests to figure this out. These incrementality tests help determine which tactics or channels genuinely make a difference in driving customer purchases rather than just getting credit for a purchase that would have happened anyway.
On top of that, MTA models can help determine where credit for a customer purchase should go. By combining this with audience-propensity scoring (essentially a measure of how likely someone is to make a purchase), marketers can better understand which tactics and channels are valuable in driving sales. Suppose a campaign on TikTok primarily converts people who are likely to make a purchase; it would be assigned a lower value in driving incremental sales (i.e., sales that wouldn’t have happened without that campaign).
By modernizing MMMs with these additional inputs, marketers can gain a more accurate and granular understanding of their campaigns’ performance and make data-driven decisions more promptly. This is essential for full-funnel marketing, as it allows marketers to understand how each stage of the funnel impacts the others for a complete customer experience. So, while MMMs have their limitations, modernizing them with incrementality tests and MTA models can help marketers optimize their spending and drive higher marketing ROI.
4. Operating Model across the Funnel
In addition to the three areas mentioned, full-funnel marketing also requires investment in the right technology and data infrastructure. For example, having a centralized data repository and a common data language across functions is crucial to ensure that teams work with the same data and definitions. This enables accurate measurement and attribution of results across the funnel and helps teams make better decisions based on data-driven insights.
To support data and technology, having the right talent and capabilities in place is essential. This includes a mix of technical and analytical skills and creative and strategic expertise. Training and upskilling programs can help bridge talent gaps and ensure the team has the right skills to execute a full-funnel marketing strategy.
Finally, it’s important to continually measure and optimize performance to ensure that the full-funnel marketing approach delivers results. This requires experimentation and testing to identify new insights and opportunities for improvement. It also requires a willingness to adapt and pivot based on changing market conditions or consumer behavior.
Conclusion
The abundance of data on new customer behaviors has presented a lucrative opportunity for marketers to gain a deeper understanding of their customers and their decision-making process throughout the entire funnel. To stay competitive, businesses must adopt a full-funnel marketing strategy that combines brand-building and performance marketing. This comprehensive approach can increase customer engagement, foster brand loyalty, and drive revenue growth. Focus your efforts on the four essential building blocks:
- Measuring brand building
- Creating connected KPIs
- Adopting new-wave media mix modeling
- Establishing an operating model across the funnel
By embracing full-funnel marketing, businesses can drive efficiency and ROI while building a solid emotional connection with their customers.
As always, please let me know your thoughts and comment or reach out with any question; II love to hear from you. In the meantime, good luck with building stronger connections with your customers!
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