🤯 How much should I be investing in brand?

Despite dozens of think-pieces to the contrary, brand and growth marketing aren’t at odds. Les Binet’s research on marketing effectiveness makes the case for the optimal split of brand vs growth marketing, and some considerations to adjust for your category

Good morning!

In a plot twist, I’m introducing a new series to this newsletter on brand research.

What you can expect: You’ll get 1 piece of research broken down into something you can actually use. my goal isn’t to turn you into a marketing scientist (sorry, not my thing!) but build brands that WORK.

For fun, I’m also challenging myself to do them in screenshot essays for fun (and for brevity). We’ll see how that goes!

Why? Last week, I had the chance to talk about the Airbnb case study I wrote on brand and growth in the old girls club, senior women in vc and tech. I got a lot of DMs about the brand research I shared. The underlying question: how much should we be investing in brand?

The answer is: probably more than you think.

Let’s get into it! 👩‍🔬

Today

Brand Versus Growth. The War on Brand. The Battle for Effectiveness.

It’s a marketing tale as old as time. Just this week there was another round of fresh think pieces on this topic by Mark Ritson and Tom Goodwin. I think one of the reasons there’s so much tension between brand and growth is that marketers build their identity around one or the other.

Growth folks: Execs, VCs, business leaders love the predictability of growth as a science. It’s much cleaner to think about humans as a set of behavioral algorithms.

Brand folks: Long-term thinkers, value emotion, creativity, customer experience, comfy with the messy tension that humans present (we are emotional! we contradict ourselves!) in order to build emotive work that cuts through.

But let’s talk terms - what even is brand and growth marketing?

Here’s my analogy: if you think about marketing in financial terms, growth is budgeting, and brand is investing.

Growth is budgeting 

• How to spot it: Selling - there’s a a direct call to action

• Time horizon: short (weeks)

• What you should expect from growth marketing: sales results

Brand is investing

• How to spot it: Storytelling - there’s no direct call to action

• Time horizon: long (months, years)

• What you should expect from brand marketing: awareness, perception, sentiment, long term sales uplift, more effective growth marketing

But - and here’s the really important part - ya need both and they gotta work together.

Show me the receipts, Amanda

You don’t have to take my word for it. Les Binet, the godfather of effectiveness research, has run an entire study on the optimal split between brand and growth (he calls it activation) marketing. Here’s the breakdown.

🧐 The rule

Broadly speaking, the optimal brand and activation split 60/40 split in favor of branding. Major caveat: this varies by industry and should be approached with nuance. Activation dominates in the short term, driving immediate sales response, but brand building builds long term growth in base sales. You need both to drive long term growth and profit.

➡️ Implication

Invest at least 60% in brand and 40% in demand.

❌ Avoid this common mistake

Overinvestment in lead generation. In 2016 72% of marketing funds were geared towards lead gen. 

🏆 The case study

LinkedIn ran a pure acquisition marketing campaign for a credit card company and drove a .2% conversion rate. When they blended brand messaging into the campaign, the conversion rate more than tripled to 1.2%.

💰 Bottom line

When you synchronize brand and demand, you can drive exceptional results.

👨‍🔬 The OG behind this research

Les Binet.

But really, how much I should be investing in brand?

So here’s where we have to embrace nuance. Here’s the cliff notes:

• Broadly speaking, 60% brand, 40% activation is the optimal split

• However: this varies by category - finance, for example, benefits from an upweighting in brand (makes sense to me - it’s a more emotional decision)

• Digital marketing makes activation easier, so brand building is becoming more important, not less. Budgets need to be re-balanced accordingly.

• Rule of thumb: if activation (direct selling) is easy, downweight brand; if activation is hard or the purchase is ‘high emotion’, upweight brand

Summary

I’ve spent time in both worlds, talking storytelling and building beautiful brands in high end design studios. But I’ve also dealt with the scrappy budgets and realities of a startup while building a memorable brand as a growth marketer.

The reality is - it’s not a choice between one or the other. My advice? Recognize where your strength lies, and supplement it with a partner, agency, a hire who can bring the other side to the table. You’ll be better for it.

🧹Housekeeping 🧺

All the things I need to tell you:

• Want help auditing, defining, or bringing your brand to life? That’s what I do. Reply to this email to book a chat.

• I’m looking to speak to some folks about brand measurement. If that’s you, or someone you know, slide into my DMs or tag them into this post. 

• How’re you finding this newsletter? Hit the link & tell me.

✌️Thanks so much for reading - I so appreciate your attention!

Amanda

What did you think of today’s newsletter?

😠 🙁 😐 🙂 😃