Can performance marketing despite scoring highest on ROI, lead to brand building?

Performance marketing refers to marketing activities that are measurable and directly tied to specific outcomes or key performance indicators (KPIs), such as conversions, clicks, leads, or sales.

In today’s times, when marketers are doubling down on data-backed marketing and advertising and eyeing high ROI owing to their understanding of the target audience and their behavioural patterns accompanied by customised targeting, performance marketing may have become a crucial element for building visibility, but it alone cannot drive brand building goals, opine marketers.

Raja Rajamannar

According to Raja Rajamannar, Chief Marketing and Communications Officer, Mastercard, performance marketing is like running on the treadmill, wherein one keeps on running to survive or just to stay in the game, but the moment the individual stops running, he/she gets thrown off by the treadmill

“On a treadmill, you are not getting ahead and you are where you are and even though you may be running very hard and furiously and sweating, you are still in the same damn place,” he said at the time,” he said.

Karthi Marshan

Karthi Marshan, Advisor, Kotak Mahindra Bank, also denoted that performance is not a marketing channel, but a sales channel and like Byron Sharp puts it, it doesn’t build next year’s customers and loyalists, but targets today’s prospects, which is why brands should allocate to performance work the money they would have otherwise allocated to achieving sales.

Hence, in his view, performance work is little more than Direct Marketing on steroids. In fact, to him, what performance does is not a brand build because brand building is about creating mental availability, aka mindshare, which is about the prospects remembering the brand and thinking well of the brand, every time they encounter the brand’s category, regardless of wherever they are positioned, or whether or not they buy the brand’s or even a competitor’s offering.

Chandraket Mall

Echoing similar thoughts, Chandraket Mall, Account Director, FCB/SIX India, also emphasised that today, businesses across industries like e-commerce, D2C, BFSI, and real estate have allocated substantial budgets to performance marketing due to its scalability and data-driven insights.

He further stated that while performance marketing is vital, neglecting brand-building efforts can erode loyal audiences which is why brands must allocate budgets wisely and avoid solely relying on performance campaigns to sustain interest.

In fact, brands, in his views, should assess success beyond sales metrics, considering customer lifetime value and acquisition costs and then come up with a comprehensive marketing approach which involves defining target audiences, delivering tailored content, and understanding the impact of creative content.

Commenting on whether performance marketing also leads to long-term brand-building, Marshan emphasised that, in his viewpoint, there is only one role that performance can play- in mental availability, since it effectively spams the prospects incessantly, it has a chance of adding to recall for the brand.

“However, thanks to the straitjackets imposed by most platforms, the content of such work is so bare bones, that leaving a positive impression is nearly impossible. So great storytelling via performance platforms can redeem the channel if you will,” he said.

Sumeet Singh

As per Sumeet Singh, Group Chief Marketing Officer, Info Edge India, the parent company of Naukri.com, 99 Acres, Shiksha, Jeevansathi, etc., what performance marketing does in the long run is it leads to visibility because once the people start seeing the ad on banners and keep noticing what the brand is, it does help.

“I would say it does have a rub-off on the brand, but it is not truly a brand-building mechanism because that is only built when one has a great product,” she said.

Gaurav Mehta

On the other hand, Gaurav Mehta, Chief Marketing Officer, Noise, emphasised that a lot of different performance metrics in digital marketing fulfil brand-building goals as well, like a display or a video ad running from a performance optimisation goal.

“Some of the lower end of the funnel in regards to formats of performance marketing campaigns like search engine marketing have some sort of a memory encoding, but not as much as the whole audio-visual or the visual aspect of it, because people consume anything with all their senses. And that's where I’d say video would always be higher on brand building, followed by display, text, etc.,” he added.

Ronak Jain

Sharing the performance marketing agency POV, Ronak Jain, Director, Performics India, stated that today various categories such as Telco, Gaming, Fintech, Consumer Goods, BFSI, etc. have increased their investments in performance marketing with an aim to drive business growth through ROI-driven marketing strategies as it plays a pivotal role in significantly boosting brand success since it's a crucial enabler in any brands’ online growth journey.

“To succeed in performance marketing, the initial crucial step involves understanding the core target audience for your business along with discerning the consumer triggers that hold significance for your product and designing personas that guide the selection of the appropriate platform mix. Furthermore, to optimise marketing efforts, a comprehensive examination of the entire customer journey, right from impressions to the final conversion, is essential in order to identify opportunities for enhancing overall ROI,” he opined.

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