How Brand Building Drives Performance in the Digital Age

WARC is one of my favorite source (and it should be yours too) for marketing insights with excellent content and studies. Recently they published another major report called “The Multiplier Effect” which I will pick up and outline the key learning and insights from it.

In today’s fast-paced marketing world, where digital performance and data-driven results often take center stage, traditional brand building may seem to fade into the background. The new report by WARC however powerfully demonstrates that a strong brand is the foundation for sustainable commercial success and can significantly enhance the effectiveness of performance marketing. This report highlights why many businesses are missing out on significant revenues and profits through an incomplete approach to advertising. It argues that the strongest returns from advertising come when brand equity is used as an accelerator of commercial performance.

The “Doom Loop” Trap: Why Pure Performance Strategies Fall Short

Today’s companies are caught in a kind of “doom loop.” This arises when businesses focus too heavily on short-term performance goals, thereby neglecting long-term brand building. The constant optimization of short-term metrics often leads to a reduction in budgets for brand building, which in turn weakens the effectiveness of performance campaigns. This vicious cycle results in stagnating growth and declining returns.

The Key Lies in the Integration of Brand and Performance

In order to succeed in with advertising companies need an approach where brand building and performance marketing are not viewed as separate entities but as mutually reinforcing forces (see also our previous post on the topic). A strong brand increases the likelihood that consumers will choose a product when they are ready to buy. This happens through positive associations that are anchored in memory. At the same time, performance advertising can reinforce the brand message and increase the efficiency of brand-building measures. The authors argue that the biggest returns are achieved when brand value is seen as an accelerator of commercial performance.

The study demonstrates that a shift from a pure performance strategy to an integrated approach can increase revenue return on investment (ROI) by 25% to 100%, with an average increase of 90%. Conversely, a shift from a mixed approach to a pure performance strategy results in an average ROI decline of 40%.

Boiling it down, advertising has two main tasks:

  • Serving current demand: Addressing consumers who are already actively in the purchasing process and considering a company’s offerings. This is done through targeted messages and calls to action.
  • Building future demand: Creating positive associations and a strong brand preference among potential customers. This is achieved through building brand equity and emotionally appealing messages.

The “Messy Middle” and the Modern Purchase Process

Another effect outlined is that the purchase process today is no longer linear but is often characterized by a “messy middle” (see also Google work on this phenomena). Consumers jump back and forth between different touchpoints, from social media posts to direct purchases. Therefore, it is crucial to connect the various touchpoints and create a consistent brand experience.

The Role of Creativity

A very critical and essential role is that of creativity, both for brand building and for performance advertising. Creative messages elicit a stronger emotional response, increase attention, and are better remembered. The findings show that creative, brand-building advertising not only has a long-term effect but can also boost sales in the short term.

The way to gain the Multiplier Effect

To really leverage this Multiplier Effect, the report emphasized a clear pathway to successful advertising:

  • Integrated Strategy: View brand and performance marketing as part of an integrated growth strategy.
  • Balanced Budget: Allocate at least 30% of the budget to equity-led advertising, ideally between 40% and 60%.
  • Review Search Investments: Do not spend more than 25% of the budget on search engine advertising, as it is often overvalued.
  • Creative Platforms: Focus on building creative platforms that use a variety of messages for different goals instead of isolated campaigns.
  • Utilize Brand Assets: Use consistent brand assets to strengthen the connection between different forms of advertising.
  • Link Performance Advertising to Brand Thinking: Performance-oriented actions should be based on the brand idea.
  • Smart Media Combinations: Use media combinations that reinforce each other, e.g., TV and search.
  • Measurement Stack: Build a “measurement stack” that can measure baseline revenues and the incremental impact of advertising.

Conclusion: A New Era of Marketing

“The Multiplier Effect” makes an important contribution to a contemporary marketing strategy. The report clearly shows that a strong brand is the key to sustainable success and that brand building and performance marketing must work together to achieve the best results. It’s not “Brand + Performance,” but “Brand x Performance”. The study highlights that neglecting brand building in the “performance era” can lead to significant losses.

It is time to shift the focus from short-term successes to a long-term, integrated strategy that recognizes the value of the brand as a multiplier for commercial success. Only in this way can companies continue to grow successfully in the future and secure their competitiveness.

The report also provides guidance on how to build a “measurement stack” to track and evaluate both brand and performance, emphasizing the need to use metrics that reflect both short-term gains and long-term brand building results. This approach requires understanding the “half-life” of equity-led advertising, which is around six weeks, and using methods like marketing mix modeling (MMM) to separate baseline sales from the incremental impact of advertising. The report also advocates for a more nuanced view of the customer journey, recognizing the importance of the “messy middle” and the need to integrate both equity and performance-led messaging to engage customers at all points in their buying process.

The key takeaway is that by moving away from a siloed approach to brand and performance advertising, marketers can harness the “Multiplier Effect” and significantly improve overall business outcomes.


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