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Episode 134

The Practicalities of Combining Brand and Sales

Performance marketing has crowded out brand building. One executive even admitted, "We're great at performance marketing, but our brand sucks." Nike learned this the hard way when they pivoted too hard toward performance and lost what made them famous.

This week, Elena, Angela, and Rob tackle marketing's most persistent divide: brand versus performance. They explore why organizations still separate these teams despite evidence they work better together, how TV bridges both goals, and practical ways to measure success across the funnel. Plus, hear why emotional storytelling doesn't mean sacrificing sales activation.

Topics Covered

• [01:00] Why performance marketing has taken over budgets

• [03:00] The problem with prioritizing what's easy to measure

• [11:00] Developing creative that drives both brand and sales

• [14:00] Why TV belongs in both the brand and performance buckets

• [17:00] Measuring TV's impact across short-term and long-term goals

• [20:00] How AI is transforming TV into a flexible, digital-like channel

Resources:

2023 Harvard Business Review Article

2024 WARC Article

Today's Hosts

Elena Jasper

Chief Marketing Officer

Rob DeMars

Chief Product Architect

Angela Voss

Chief Executive Officer

Transcript

Rob: All the things that we've loved in digital is coming into television. So it's really ushering in this whole new opportunity to bring your brand to life in an accountable way that people have always loved in digital. Well, it's shifting into the big stage, so that's really exciting.

Elena: Hello and welcome to the Marketing Architects, a research first podcast dedicated to answering your toughest marketing questions. I'm Elena Jasper on the marketing team here at Marketing Architects, and I'm joined by my co-host Angela Voss, the CEO of Marketing Architects, and Rob DeMars, the Chief Product Architect of Misfits and Machines.

Rob: Hello.

Angela: Hey hey guys.

Elena: We're back with our thoughts on some recent marketing news, always trying to root our opinions and data research and what drives business results. Today we're unpacking one of marketing's most deeply held assumptions, the divide between brand and performance. For years, marketing teams have split their strategies, goals, even their org charts into these two camps. One focused on awareness and affinity, the other on clicks and conversions. But what if that divide is hurting us more than it's helping? I'm gonna kick us off, as I always do with some research, and I actually have two quick articles to cover today. The first is from Jim Gel, Kat Lamberton and Ken Favaro for Harvard Business Review. It's titled "How Brand Building and Performance Marketing can Work Together," and I think it nails the real tension we're talking about today. These authors argue that performance marketing has taken over budgets in recent years, crowding out brand efforts. One executive they interviewed put it like this, "We're great at performance marketing, but our brand sucks." They go on to say that when we pit brand and performance against each other in a fight for budget or attention, we actually make both less effective. Instead, they propose tying both to a North Star metric for brand equity. You can hold brand to the same standards as performance and start measuring performance's impact on the brand. One last article. This one's by Steven Whiteside for Work, and he covers Mark Ritson's take on the brand and performance divide. He actually points to Nike as a cautionary tale. This is a brand that pivoted hard towards performance marketing and in doing so lost what made them famous. Ritson says they were running on the fumes of past brand building work. Once it ran out, the cracks began to show. I dunno if you've seen the new Nike ad recently on TV. It's so good. Like chills. So they're kind of leaning back into that. But the broader point here is that when companies lean too far into performance, they both miss out on long-term growth and can even stall short-term growth. So one reason that's been put forward around why performance marketing has really taken off in the last decade or two is simply measurability. It's very easy to count clicks, for example. So Angela, how do you feel about this way of thinking to get us started? And are we actually underestimating how measurable brand can be?

Angela: Yeah, we love to count, don't we? It feels like progress sometimes. Activities feel like progress. So easy to measure has, I think to some degree, warped our priorities. Things like clicks, last touch, ROI, those are things that are visible and they're fast and they're addictive, but they often reward things maybe like couponing or retargeting, potentially low attention placements that juice these short term numbers and quietly hollow out distinctiveness or things like pricing power. We've talked about this before. It's not brand versus performance, but brand multiplies performance. Strong brands make every dollar of activation work harder. So yes, I think we've been underestimating how measurable brand can be. If you treat brand equity as a composite KPI as the article suggests, looking at things like familiarity, regard, the article talks about meaning and uniqueness. Refresh it frequently by segment, by market, and link those movements to revenue or to shareholder value using proper modeling, brand can become accountable, as accountable as performance and performance work can be held accountable to brand impact, which helps to avoid kind of false positive ROIs.

Elena: Yeah. Just because not as many maybe marketers are aware of how to measure brand doesn't mean that it can't be. So speaking of this kind of performance and brand debate, earlier this year we had Lexi Wolf on the show. She's from Warc, and they talked about their report, which is the Multiplier Effect, which went pretty viral as far as like marketing reports can go. And their research found that not only are both brand and performance necessary, they work better together, which Angela, we were talking about. Personally, I think many marketers today will acknowledge that both brand and performance marketing have roles to play. It's a pretty common point of view, but where we might still be falling behind is in our separation of the two. So given all this evidence in front of us, why do we think so many organizations still keep their brand and performance teams separate?

Angela: Well, I think most companies are still built to reward what can be proven quickly. And org changes are hard. They're really hard, not necessarily what creates lasting growth for the organization. Performance marketing fits neatly into that system. It runs on weekly targets and dashboards and immediate ROI. Brand building plays out over longer cycles. Research, distinctiveness, future demand, which just makes it harder to justify under the same lens. It almost feels like different belief systems. You know? I think that's where the "both is" mentality comes in and trying to kind of shift that lens. Finance and operations too, I think reinforce the divide with things like just having separate budgets, separate agencies, separate KPIs. So each team ends up defending their own strategy and their own scorecard. And I think the tools we use to deepen what we think we understand also help the divide grow larger. Today's MarTech stacks are geared towards clicks and conversion while brand teams live in trackers and creative testing. So you have things like career paths diverging just in terms of our areas of specialty. Growth leaders are trained to ship numbers now. Brand leaders are for stewarding equity over time. And the result is that this integration becomes everyone's job, which of course we know means then no one owns it. I think you've got pressure for short-term revenue, which drives short-term decision making and attribution models that undervalue brand. Silos persist even when leaders say they want a full funnel approach. The real fix isn't surface level collaboration, but it's really deep shared incentives. A single brand equity metric tied to revenue, something like that, like the article suggests, and ultimately one accountable owner for that entire plan.

Rob: It just seems like the practicality of trying to reorganize a large company, two very different entities with different reward systems and trying to bring them into one. It's no one disagrees it should go that way, but like the handbook for how to do that and how to do that well still doesn't really exist. In a smaller company or a smaller brand, you can be agile, but if you're a Fortune 500 company, sometimes you're not even in the same building. Like, how do you bring people together and do it well? You hit on so many good points too. It's not just the lines that are drawn in the boxes. Career paths, like you mentioned, and just the experience and how do you merge knowledge sets and reward systems. It's daunting.

Elena: Yeah.

Angela: A hundred percent.

Elena: I think that even if the people like the idea of shared incentives or like one accountable owner merging the teams, you're right. Sometimes it's just inertia that the teams have been separate for so long, it's hard to bring them together. I think it's a lot of times just kind of the way things are. So when the separation exists, how do we think that can affect like an agency client relationship or even the incentive of a CMO at a brand?

Angela: It skews incentives on both sides of the equation. I would say agencies are usually set up with separate profit centers, brand and creative, maybe on one side, performance and media on the other. And their fee structures reward volume and short term activities. So each group optimizes for its own slice instead of overall business growth. The way results are reported again, only deepens the divide even further. Brand agencies are highlighting these trackers and awards even maybe, while performance agencies are showing that last click ROAS. Neither is accountable for how the two work together. So that's one big problem. On the other side, CMOs are often judged on annual or even quarterly targets at times with bonuses that might be tied to pipeline. They could be tied to CAC. They could be tied to cost savings. So we don't know what they're tied to, but they all matter and that pushes them to overvalue what's immediately measurable and undervalue the slower building assets, potentially like distinctiveness and memory. Things like distribution, procurement—we love to be procurement's friend, but like that also reinforces the split with siloed scopes. And board updates even tend to celebrate quick wins, so the outcome becomes predictable. You know, when growth stalls, creative ends up blaming media. Media blames creative, agency rosters churn, growth remains fragile. It's a problem.

Rob: There's nothing more awkward than those all agency summits where a client brings in everyone from, "Oh, we're the brand shop, we're the digital shop, we're the—" Wow. Talk about a group of marketing egos.

Angela: Yeah. Yeah, it's hard 'cause I wanna assume the best in our competitors, right? That we're all there for the benefit of the brand and how do we grow the brand together. But just given the fragmentation with consumer behavior and the vast amount of choices we have in terms of how to purchase a product, how we learn about a product and how we purchase a product, it's a really hard challenge. I have seen it done well. It can be done well. But you're right, there are definitely awkward moments sometimes. Yep.

Elena: It is funny how often we hear too that if you added up all your different agency partners are doing, your marketing return would be like way over a hundred percent. Right. I think we've heard that a lot. That must be an awkward moment. It's like somebody's not pulling their weight.

Angela: Totally. Right.

Elena: So speaking of challenges, one challenge that I hear come up a lot when we talk about combining brand and performance is creative. 'Cause I think it's easy to say, easy to understand, but then you think about practically executing on that, especially in a channel like TV. It can be very difficult. So, Rob, how do you think a marketer should think about their creative strategy if they wanna develop these campaigns that drive both brand and performance?

Rob: Absolutely. I mean, it is respecting both and recognizing that there is art and science in doing it well. It all comes back to first and foremost, are you anchored to a big idea, something that has legs and can transcend all your channels? Are you able to take that idea and pull out its distinctiveness so that as you start to look at the activation levers, they don't just feel like ads filled with activation levers and nothing that's building your brand, right? So get that format, get that big idea, but then recognize that you have to still drive response, especially if you're looking for the brand. Yep. You have your distinctive assets, but are you asking the customer? Are you looking at ways that you could potentially incentivize them? Not full on couponing, you have a URL? Do you have other ads to the customer journey to continue the funnel, especially with television, right? Balancing that emotion, recognizing emotion is a brand building tool, if you will, but it's also a driver of action, right? If you can really inspire someone to respond. But again, using those distinctive assets across all those channels so that every—a rising tide lifts all boats.

Elena: Yes.

Rob: All channels, right?

Elena: We're just struggling.

Angela: A rising tide, Rob.

Elena: Okay. I think overall that is a good point though about when we love when brands want to invest in their brand and do big brand campaigns, but there seems to be a misconception that if you have some sort of call to action or compelling reason to buy, all the brand stuff just evaporates. We found that's not true. You can have both in the same—

Rob: And don't forget, we've talked a lot about it on the show, is the importance of pretesting. 'Cause that also can help you go, "Oh, are we pulling too strong in one direction or the other?"

Elena: Speaking of commercials, I wanted to talk about TV a little bit because we're a TV agency, so that's where our expertise really lies here. TV advertising has historically kinda been put in the brand bucket, I would say. Why do we think that is? Like, is it necessarily fair, not fair?

Rob: It's the big stage, right? Everybody goes, "Wow, look Mom, we're—" It has that historical wow factor, but absolutely it is becoming more and more a channel that can deliver performance and brand, but it's natural to go, "Oh yeah, it's the Super Bowl, right?" It's that thing that glows on the wall of your house and it's not that hard work and direct mail piece that's staring at you in your mailbox. But of course it has all kinds of opportunities, especially in today's world. If you look at the ability to look at how the landscape—and that's something obviously Angela could talk much more about. But looking at better attribution modeling and also looking at things that can drive immediate response in the television channel. We've talked about that before, like things like QR codes and also just shoppable TV and really seeing the rise of really being able to interact with the television in ways we've never been able to interact before. So yes, it's historically been a top of funnel channel, but it's really migrating to a full channel experience for consumers.

Angela: I don't know if you guys have ever thought about this, but there's so much to unpack when you think of quote unquote marketing effectiveness, which is our topic of this podcast. And I was like, what is the most, in my head, important principle? Like I'd be curious what your guys' take is on this, but 'cause there are great ones, 95-5, and I do think that Les Binet and Peter Field's report that really shattered the industry, "The Long and the Short of It," like to me it's that short-term activation versus long-term brand building. And that understanding of in-market versus future demand really helps crystallize why it's so important and how to think about a channel like TV because you're always hitting people that are in market today, and you're hitting people that are out of market and the majority is out of market. So that's where the bigger game should be played. That's why emotional storytelling matters, but it doesn't mean that there aren't people today that need to buy a car that need whatever the product might be. And why would you allow your competitor to get in front of that audience and steal that share from you when you have the opportunity to do both? And to your point, Elena, yes. Like it's infuriating to me this idea that if we're focused on brand, then we can't be focused on driving sales today. It's somehow gonna pull away from our ability to be memorable, to tell a story and to ultimately drive future demand for the brand.

Elena: If we know TV can be this bridge between brand and performance, that also does make it harder to measure, unfortunately. So how do we know which part of the funnel TV's working hardest in? Because I can imagine a marketer listening to this episode and they're thinking, "All right, well, TV might do both. That's great, but how do I actually measure that and prove it to my CFO, my CEO?"

Angela: Yeah. I think it's by separating how you measure from what you optimize. Separate how you measure from what you optimize. I even have to think about it. So things like using a dual scorecard for short term performance, you can use market level incrementality, geo-matched tests. You could do phased rollouts to estimate those incremental sales. That could be app startups, signups, pair that with ACR, set top box exposure logs to attribute lift by network, day part, creative. Watch the downstream effects like lower paid search, CPA, branded search lift during flights. And then for long-term brand, track a composite equity metric. And there's a lot of 'em. The article talks about familiarity, regard, meaning, uniqueness, link it to revenue via an MMM. It could be elasticity modeling, verify TV's role by showing persistent base sales shifts after flights and long term. And this does take a while, we should be able to look at things like pricing power, customer retention in exposed regions. Creative diagnostics, like ad memory and emotion tests will help reveal whether TV is building distinctiveness and the fuel that later—Creative diagnostics, like ad memory and emotion tests will help reveal whether TV is building distinctiveness and then bring that to your CFO as one, a cost per incremental action from a channel like TV. Two, halo savings that could be cheaper CPAs in digital while TV runs. You know, my direct mail is more impactful or effective. And then three, model the revenue from those equity gains. And lastly, what does your payback curve look like? Weeks versus quarters? Every brand is unique of course, but that's the type of way to be thinking about ways to measure kind of the "both is" of a channel like TV.

Elena: Yeah, and probably important to, when you're dealing with your CEO and CFO, to set the expectation from the beginning, like, these are the different things we're gonna look for. Because sometimes I think some of TV success too is being willing to look for those longer impacts, like being willing to have the patience and the being willing to invest enough to believe that those impacts are going to come. That's like half the battle.

Angela: I love the signals versus success. Let's look for immediate signals versus immediate success. And transparently, sometimes out of the gate in television, we will see immediate success, right? Client comes in and defines an ROI, they need a three or they need a four or whatever. And it's just boom. Like there was enough in market demand. We got the message right. The media was priced right and it's right there. But we have to remember that that's just a fraction of what's to come. So don't overly focus on that. You will always find signals if you're looking in the right area. So it's also not a situation in which we need to go, "Okay, we turned it on. So let's close our eyes and plug our ears for six months, and at the end of six months, hope we wake back up and see this plethora of sales activity."

Elena: And sometimes even those, like we've seen with clients, those short term results can take a little while to get going too. So it's like there's everything in between you could be looking for. Well, TV itself, as we know, is undergoing a lot of change. More people are watching streaming. Robbie mentioned some of the QR codes, shoppable ads. There's a new way to interact with TV. AI is gonna change everything. We had Jonathan Rowe from your team on a couple months ago, and he was talking about how his TV prediction is that we're all gonna be watching our own personalized AI generated content made specifically for us, our own movies, our own TV shows, which sounds crazy, but who knows. Rob, how do you see TV's role as this brand builder and a sales driver in the marketing mix changing?

Rob: Faster than ever before. Television is starting to behave like a digital channel. And what does that mean? I think people have always loved digital because of its flexibility and the ability to generate assets and customize those assets and place them in ways that connect to their audiences. And we've spent a lot of time already starting to talk about how streaming, attribution, how you can measure all of that. But we're entering a whole new era of asset generation which is really exciting when you look at the ability to—'cause a lot of people will look at television as, "Well, great. But just the cost of entry is too high, right? Like I have to put on this amazing ball gown if I'm gonna show up on television." But that's not the truth anymore. You're able to generate amazing assets at a cost that has never been seen before. And so you can make your brand show up just as big as the big dollar competitors out there. And that really levels the playing field and opens up all new opportunities. Think about how you can now mass customize television commercials like you never could before. That was expensive and time consuming, but AI, we're already seeing it now, is able to mass customize the audio and the visuals to meet your objectives of your campaigns based on—you could do ads based on weather, ads based on geography. All the things that we've loved in digital is coming into television. So it's really ushering in this whole new opportunity to bring your brand to life in an accountable way that people have always loved in digital. Well, it's shifting into the big stage, so that's really exciting.

Elena: Exciting time to be in TV and we've seen that people predicted ads would be gone. We'd all wanna pay for content, but that's turning out not to be true. So ad supported TV is—so we're gonna have opportunities to use all this cool new stuff, which—alright, I got kind of a fun question to wrap us up here. What is one decision in your personal life where you prioritized long-term brand building over short-term performance? Rob, why don't you get us started?

Rob: Oh wow. We're talking about trying to do something in your life, start slow, but hopefully it'll build. And for me, a year ago, I downloaded the Couch to 5K app and I said, "I'm just gonna start to walk around and I'm gonna do this. I'm gonna try to get into this" and worked my way into running a full marathon. And so before that I had only, I'm 51. Before that I only ran to a White Castle, so this was a big thing for me. It started slow, but slowly built and now I'm running frequently throughout the week, so that'd be my slow to—is that, I don't know, does that work? Is that, does that work for your analogy? Okay. Fantastic.

Elena: The brand has been built. Rob's crushing his five Ks. That's great.

Angela: Good job, Rob.

Elena: Ange, what about you?

Angela: Yeah. So I am in the dead middle of raising teenage girls. Three of them to be exact. Well, I guess one of 'em is a preteen, but she thinks she's 30. So much consumed with what I would call short-term win versus long-term win parenting moments. This is a very timely, this was a timely question. So this past weekend, I personally believe that it is not necessary and is developmentally detrimental to allow my 13-year-old to watch a horror movie like Saw with her friends. The short win would say we would say yes, she would feel happy. She feels like we trust her, she feels included. But that's not the route we chose, which was therefore a short-term loss for long-term gain. We're the worst parents ever, but hopefully in the end we end up on the positive side of that equation.

Elena: I think you will. I wish my parents had prevented me from seeing The Human Centipede when I was that age. 'Cause I'll never forget it. Ever. So—

Rob: See, I was all about Nightmare on Elm Street when I was that age. Still have fond memories of Freddie Krueger. So I don't know. Risk—

Angela: I mean, I could be, we could be totally wrong. Like we're gonna end up with like sheltered children that can't deal with anything because they didn't watch a man saw his own leg off or—

Rob: Right. Exactly.

Elena: Yeah, I've never seen Saw. I—

Rob: How about you, Elena?

Elena: I hope this isn't too personal for the podcast. I think it's fine. I decided to go alcohol free in my early twenties for no reason other than just like decided to do it. And I feel like that was a great life decision for me. That's gonna build up over time and be a good one. And I think more young people are choosing that too.

Angela: Yeah. There's been a bit of a revolution around drinking and—

Rob: In the mocktails.

Angela: Yeah.

Elena: Yeah.

Angela: Great one.

Elena: Well, before we wrap up, I wanna do a quick shout out. We recently partnered with Warc to produce a research report that digs into what we talked about today. So if everyone remembers, we've mentioned the Multiplier Effect a lot. That covers the advantages of combining both your brand and performance efforts, but we really wanted to take that a step further into TV specifically. So we partnered with Warc to do that. It was super interesting what we were able to put together. And you can find that report by visiting our website @marketingarchitects.com. So we'd love to know what you think.