The Influence of Brand on Performance Marketing2.10.2022
This article came about in order to present evidence on why brand-building is very important for every brand.
We’ve prepared 3 key statistics for you that we perceive when working on performance campaigns with a successful brand. All of the statistics presented below clearly have a positive effect on the efficiency and amount of sales from individual channels. Thanks to this, even strict cost statistics (ROAS, COS) can be satisfied, and the price for advertising also decreases. The basis of the article was our presentation at the NextBigThingBrands event in Zurich, where we had the opportunity to present our experience in this area.
Brand performance in performance campaigns
Higher ad CTR
This statistic is quite often underestimated and marketers don’t pay a lot of attention to it, particularly in performance campaigns, where the target of the ad must be entered so as to trigger an action in the user. If you have an agency that reports views to you in performance campaigns, change it immediately.
Furthermore, CTR also increases the quality of advertisements, because the advertisement is interesting for users, and thereby the price decreases. Likewise, with high-quality advertising, we are able to reach more people with the same budget and thus take a larger share of the market segment. In the graph below, we see the biggest difference in the tourism segment, where returning users reached up to 27% CTR. The results are also visible in other segments, of course.
Organic and direct traffic
According to statistics from semmrush.com and their graph on ranking factors, we can see that direct traffic is in first place. Among other activities, brand campaigns have a large share in this type of traffic (obviously, it varies from case to case). In the same way, brand campaigns also help the quality of traffic, such as time on the page, number of pages viewed, bounce rate, etc. These statistics are ranked first according to this research. Aside from the statistics in the graph, brand campaigns also have a significant impact on organic website traffic. But in this case it is difficult to measure, because SEO work is also linked to organic traffic, and the exact influence of the brand is difficult to distinguish.
Better conversion rate
In conclusion, this is perhaps the most important statistic that you’ll appreciate when assessing a campaign’s performance. The conversion rate, whether overall or from a specific source, is a statistic that many owners or marketers happily ignore. At the same time, a slight improvement in it (in tenths of %) can bring a big impact in the turnover or profitability of the entire e-shop.
It is clear that we have to work with the conversion rate right from the start, and it’s very important to have the UX and UI of your website determined, especially on a mobile phone! There is perhaps no longer a need to talk about how many users come to our website via mobile phones, and through mobile phones you can catch acquisition customers with the first visit in particular. But now let’s take a look at how the brand affects your conversion rate.
In the graph below, you can see the conversion ratio of users who have already bought from you versus those who are doing so for the first time. Trustworthiness plays a large role in this case, and there is a much greater chance that the user will complete the conversion with you if he/she considers your brand to be trustworthy. For comparison, we have in the table a simple campaign performance with a conversion ratio of 0.36% and 1.3%.
Let’s simplify it and say that we have the same statistics aside from the conversion ratio (CPC, AOV = €100); only thanks to the conversion ratio do we see a rapid difference in the cost of performance ads.
In the first part, we presented the most key statistics that significantly affect your campaign performance. Your specialists must discuss these statistics with you and improve them. This is not just about running good Google campaigns, but about what is happening behind the scenes. If your agency has never mentioned the topic of conversion rate, ad CTR, organics + traffic to you, then you again need to change agencies. If you have an internal team and it does not work with these statistics, this is yet another mistake. They need to be retrained and to start dealing with it.
The word brand is always mentioned, sometimes as an excuse (the results are not good, but at least we are creating a brand), sometimes again purposefully – we want to do brand campaigns. But how can the budget be divided into brand campaigns? Compared to performance, they have no immediate result and are more difficult to measure; thus, you have to prepare for that.
Think about your product
Here is the first decision about what you actually sell and how you have the product under control. If you are the owner of the brand under which the product appears, it’s logical that you have full control over what happens with the brand; in that case you are certain that the investment in the brand is long-term, and it is basically up to you when the brand disappears or changes its owner. If you are only an exclusive importer of a product, you need to be careful here. If you invest big money into someone else’s brand, you may lose the rights to sell this product and thus lose the entire investment in the brand. In the second case, it is expected that the brand owner makes part of the brand, in which case you can invest more money in performance campaigns.
Let’s look at an example: You sell mobile phones. You probably won’t pay for brand campaigns for Apple phones (Apple does it for us) but will rather focus on the brand campaigns of your e-shop, where you sell more than Apple phones. For example – perfect reviews, post-warranty service and the like.
On the other hand, if you sell clothes under your own brand, you must be the one who helps your B2C sector as well as B2B (offline and online) with a brand campaign; then your B2B partners will also be able to better sell your products.
50 on 50 as the starting point
We recommend dividing the budget half-and-half at the start. This is obviously not an iron rule; below is a research chart from satista.com based on the US market. The vast majority of companies fall into this range. If you own the entire brand, I would start right from the start with 60/40 in favour of the brand and further optimise. You can change this ratio over time, of course, and adapt it to the company’s current short-term and long-term goals, or the campaign that we are currently communicating.
A Black Friday campaign can easily be in the ratio of 80/20 performance, the drop of a new collection in a 70/30 ratio in favour of brand campaigns. There is no fixed and long-term solution.
A strong brand conquers the market
Globally, brands invest more than 700 billion dollars in marketing in order to influence people’s perceptions. Up to now, this impact has been difficult to measure. But everything has changed in the online environment, there has been a bigger shift and we have more accurate measurements available.
In the graph below, we can see that the 40 largest brands have almost doubled their shareholder returns (TRS) over the past 20 years (ending 2019).
Source: McKinsey Marketing & Sales practice, https://www.myshareofsearch.com/shareofsearch/branding-as-an-investment-in-growth
Case study: Bloom Hair
Bloom hair ranks among the market leaders in hair vitamins for women in Central Europe. It has recently opened the American market and plans to launch in the rest of Europe as well. This is a beautiful example of how the power of the brand can influence the power of performance campaigns.
We have selected 3 examples for you from countries where Bloom Hair already operates. Data was collected in 2021.
- Slovak market – 4 years of brand marketing
- Czech market – 2 years of brand marketing
- Polish market – 6 months
A comparable performance budget went to all countries. The aim, of course, was an order at the e-shop. CTR and CPC is from paid campaigns on Facebook/Instagram.
Performance on individual markets
In the table below, we see a comparison of the 3 countries with different durations of brand campaigns.
- CTR – The winner is Slovakia, where the difference from the Czech Republic is relatively noticeable.
- CPC – Here we have already even and CZ and SK are basically balanced.
- Organic & Direct share – the share of total turnover from “unpaid sources”. In Poland, we still have to pay for 75% of turnover in performance channels.
- Conversion rate – in this case far above average (this is also due to the e-shop offer), but Poland loses significantly.
According to these statistics, most of which we covered in the entire article, a fundamental difference can be seen. The Czech Republic and Slovakia are already balanced after several years, and we rather maintain people’s awareness with brand activities, or they will be built on new items. In Poland, however, we have a lot of catching up to do, and we are nowhere near reaching the potential of the entire market.
Do you want to learn more about building your brand and the statistics you need to pay attention to? Don’t hesitate to contact us