Even During a Recession, Brand Building is a Crucial Investment – Here’s Why

Passion Digital Passion Digital 15/02/2023 4 minutes

With marketing budgets squeezed and tangible ROI more important than ever, performance marketing delivers against the bottom line — in the short term. But in today’s world of media over-saturation and never-ending consumer choice, building brand loyalty should be priority number one, right?

In recent years, the marketing industry has become obsessed with data and measurement. However, focusing purely on metric-driven lower-funnel tactics misses the ‘halo effect’ of less tangible marketing channels, can be expensive and is ultimately detrimental to brand perception.

As of 2023, it’s been 10 years since the publication of the seminal book, ‘The Long and Short of it: Balancing Short and Long-Term Marketing Strategies’, by the ‘Godfathers of Effectiveness’ Les Binet and Peter Field — and there’s seemingly never been a better time to revisit the perennial debate of performance marketing vs brand building.

What Does ‘Brand Building’ Even Mean?

Undeniably, brand building starts from the ground up, defining a strong proposition, brand identity, target demographic and, importantly, a point of difference. In 2023, a successful brand building strategy follows a full-funnel approach, marketing across all channels with strategic purpose. 

“A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”

Examples of brand building activities include:

  • Content marketing
  • Social media 
  • Out-of-home advertising 
  • Brand partnerships
  • Direct mail 
  • Events
  • PR

Doing these things successfully can result in brand loyalty, customer retention, positive brand sentiment and advocacy. Brand building activities have also shown to be a better driver of sales growth over time when compared to short-term activations like pay per click (PPC) and other forms of interruptive advertising.

And, in particular, investment in brand building activities like content marketing and PR can help brands steal market share in times of recession, as illustrated by Forbes.

Case Study: Airbnb Shifts Budget From Performance to Brand Building

In 2019, Airbnb CEO Brian Chesky announced the company was cutting back spend on performance marketing to focus on PR and brand building campaigns, investing an extra $202 million in brand marketing and only $77 million more in search marketing and advertising. A potentially wise decision given the years that followed — a global pandemic and nationwide lockdowns. But fast forward to 2021, and the brand claimed COVID had little impact on their traffic, which may be attributed to their existing strong brand identity.

In February 2021, Airbnb launched their first brand campaign in five years, ‘Made Possible by Hosts’. This user generated content campaign targeted both hosts and renters, and showcased the beauty of time spent together on meaningful trips. The campaign was activated across TV and digital channels in their five biggest markets and the results were impressive — an increase in traffic to their digital properties in those five markets, an increase in first time bookers and their most profitable quarter to date, up $400m from the previous year. Small beans, then.

Now, the caveat to Airbnb’s case study is that they effectively own organic search in their category, so pulling back on ad spend is potentially an easier decision. And, from a wider context, international travel was very much back on the agenda in 2021.

But does all this change the fact that their choice to double down on brand building did, in fact, pay off? I don’t think so.

So, What Is the ROI for Brand Building? 

I believe that in today’s world of media over-saturation and never-ending consumer choice, the famous B2B 95:5 rule can and should be applied to marketing and brand strategy across the board.

Once again, we should refer to Les Binet and Peter Field, whose 2017 report on ‘Media in Focus: Marketing Effectiveness in the Digital Era’ reiterates and further explores the importance of balancing performance and brand.

[source: https://screenforce.nl/app/uploads/2017/10/20171023-Media-in-focus-marketing-effectiveness-in-the-digital-era.pdf]

Brand building is, and has always been, about creating connections, generating brand affinity and staying ‘top of mind’ throughout the sales cycle. And considering the abundance of choice for consumers today, contrasted against their tightening purse strings, these factors have never been more important when it comes to long term sales generation and brand longevity.

[source: https://screenforce.nl/app/uploads/2017/10/20171023-Media-in-focus-marketing-effectiveness-in-the-digital-era.pdf

Now, I don’t intend to downplay the importance of performance marketing as it relates to direct lead gen and frankly, survival, but what Binet and Field illustrate is the importance of long term thinking.

Improved Measurement Against Brand Building

In recent years, there has been an improvement in connecting ‘brand building’ activations with a commercial ROI, from connecting out-of-home advertising to search behaviour to attributing earned media value (EMV) to influencer marketing campaigns.

OOH goes digital and measurable

Long considered one of the best ways to achieve a cost effective mass consumer reach, Out of Home advertising (OOH) — which can be everything from print ads to TV ads, radio and direct mail — is evolving and so is the way we can measure its impact.

New consumer research shows a tangible connection between OOH exposure and mobile search behaviour, while QR codes added to print OOH ads has allowed for a clearer view on ROI and consumer behaviour. Digital Out of Home advertising (DOOH) — like digital billboards, wallscapes or posters — can be measured like all other advertising channels, with common reporting metrics including share of voice, loop frequency and QR code usage.

Influencers can prove their value

Unbelievably, influencer marketing has been around for upwards of 15 years and it’s taken nearly that long to pin down attribution. Lefty is an influencer marketing platform that was acquired by influential fashion PR agency, Karla Otto, and specialises in performance measurement against top social media influencers and people of influence in pop culture.

One of their key metrics is EMV (earned media value), which calculates the media spend a brand would have had to invest in order to achieve the same results generated through organic marketing and PR by said influencer.

We believe this fight for market share will rage on in 2023 and beyond. Central to any brand’s survival should be the recognition that ultimately the consumer dictates their growth and prosperity, and so creating a connection through clever marketing that resonates and creates loyalty will always win out in the end.

Get in touch with our team to find out more about Creative Strategy and how we can help create impactful brand campaigns.