The Performance Marketing Fallacy

Written by Brendan Clarke

Performance Marketing and Branding are not two opposing polar forces, but complimentary. They feed each other. They are both important parts of the activation stage of marketing, with their own strategies and KPIs.

The problem is that Performance Marketing is like a drug, particularly for naïve or inexperienced marketers. This means that it’s very tempting for marketers to over-invest in this area, and worse, sometimes exclusively invest in this area. In 2022, I’m still amazed at how many “Performance Marketer absolutists” there are.

Performance Marketing channels are almost-exclusively made up of channels that sit towards the bottom of the traditional marketing funnel (such as PPC, Email, and Affiliates). To this end, it needs to be seen as a “harvesting” mechanism. It doesn’t create new demand or brand awareness; it simply harvests interest driven into the market by advertising.

People don’t wake up in the morning and decide to search for a particular brand of sofa. But someone may consider a particular brand of sofa when the time comes for them to be in-market for one, if a marketer has done their job properly.

Performance Marketing (or more accurately, Performance Advertising*) harvests short-term existing demand for a product or brand, whereas Brand Marketing is a longer-term strategy to reach new potential customers and take them on their journey through to purchase.

It’s basic marketing really, but in an age of self-made bloggers and niche affiliate site owners, the basics are being missed too frequently. Not only that, but many of these site owners have landed themselves in client-side positions where they have to manage marketing functions, despite no interest in broadening their own marketing knowledge and experience.

That’s not to say that people shouldn’t move into marketing, but those that do should adapt. Skills are transferrable. But someone who had success creating an income-generating microsite, is not necessarily well equipped for running and growing a consumer brand in the wider market from the outset.

I’ve seen it first hand: An arrogant “Head of Marketing” with not real marketing experience* joined a reasonably sized brand, and dismissed Brand Marketing completely, focusing only on Performance. Two years later, the brand had a huge problem. They had lost customers, and hadn’t been able to bring new ones in fast enough. The result was a decline (the opposite of growth).

Performance Marketing is great, but it needs to be continually fuelled by Brand Marketing to work long-term. Without Brand Marketing, brands rely on an ever-diminishing pool of users. Eventually, the pool will run out.

The solution is a change in value perception. Advertisers think they are running blind when it comes to Brand Marketing, but this is where attribution is key with different objectives, strategies, and KPIs defined for the key distinct areas of the customer journey. No one part is greater than the other, they must work together to deliver growth. Long-term brand growth can only be achieved by reaching new people.

Source: Ehrenberg-Bass Institute for Marketing Science

For more context, read Tom Roach’s excellent article in Marketing Week, “Is your brand stuck on the performance plateau?”.

*Performance Marketers should be renamed “Performance Advertisers” – unlike with their Brand counterparts, they exist only at the very end of the activation stage of marketing. They rarely get involved in the audience segmentation, product or positioning for example.