To promote or to brand?

Insights, Strategy

Many hours have been spent debating which form of advertising has more value. But research shows that everyone is right – your brand needs both for a balanced path to purchase.

 

Marketing teams are all too familiar with the budget wars between promotional advertising and brand advertising. And, more commonly, between the teams that advocate exclusively for one or the other.

But for delivering sales today and sustained performance quarter after quarter, we don’t have the luxury of choosing a favorite part of the path to purchase, the ‘sales funnel.’  This fact has become even more apparent as marketing has become digitized.

The traditional role of promotional advertising was to give consumers a reason to buy now, from you. And the reason was usually special pricing, special add-ons – some ‘limited time only’ incentive to act for fear of missing out on a new offer. But in the digital space, new offers are thick on the ground. See an offer, and within 30 seconds you can be reviewing alternative deals.

For brand advertising, the traditional role was to develop a connection with the consumer, leading to consideration and loyalty. Sadly, “loyalty” is becoming a rare animal. In the analog world, brand loyalists simply did not shop with the competitor. In the digital space, most of us will have to shop, whether we want to or not. Stop by your favorite brand’s product page, and you’ll spend the next 30 days seeing ads not only for that product, but for a complete portfolio of competitive brands and offers.

In this environment, it’s critical for your brand to be on the consumer’s initial consideration list. An article in the February McKinsey Quarterly provides insights into the purchase path, and the uplift in growth enjoyed by companies who focus on the first steps on the path. In a study of shoppers, they found that only 13% stuck with the incumbent brand without shopping; 29% shopped, then went with the incumbent brand; and 58% shopped and went with a competitor.  Importantly — among shoppers who switched brands, 69% purchased brands that were part of their initial consideration set when they started shopping.

The synergy of brand + promotion remains true in the digital space. A recent study by Quantcast tested the performance of brand and promotional ads in driving conversions. The program grouped consumers into three segments: those who received only brand ads, those who received only direct response ads, and those who received both brand and direct response messages. The conversion rate was by far the highest among the group that received both brand and direct response messages – in fact, it was 9 times higher than the conversion rate of the direct-response-only group.

So, let’s bring some peace to the budget wars. Promotional and brand advertising are not an either/or choice. When used together, they deliver better short-term results and create a stronger foundation for sustainable success.

Wynn Saggus, VP/Group Account Director

 

Wynn Saggus, VP/Group Account Director