Brand Advertising vs. Performance Advertising: Fight!

iPhone vs Android, Telegram vs WhatsApp, Ali vs Tyson – people like hypothetical comparisons that will never have a definite winner. Well, in the world of ad tech we have our own “1 vs 1”s, brand advertising vs performance advertising, for one. But if Cola vs Pepsi may at least seem reasonable, brand vs performance is like comparing a spoon to a fork.

If you don’t get the hint – each of these ad methods has its own mission, benefits, and challenges, so no, there is once again no absolute winner. In this article, we’re going to dissect what makes brand and performance campaigns so different, how to make the most out of each, and when to use them.

What Is Brand Advertising?

Essentially, every advertising campaign can be split into two categories: branded and performance-based. Let’s start with the former.

The goal of brand advertising is to build brand awareness and trust relationships with the audience. Its focus is long-term recognition and loyalty, while numbers and immediate actions happen somewhere in the background.

That’s cool, and all, but what is the measure of successful brand advertising? If “better brand awareness” is not enough for your sales department among other ad metrics, let them count the number of impressions; the more, the better. Once again, unlike its counterpart, brand advertising is all about an image in the eyes of the customer, not the easily measurable results.

The Examples of Brand Advertising

Classic brand advertising examples include:

Coca-Cola’s “Share a Coke”

Remember how everyone was finding their names on Coca-Cola’s red cans except for you (or it’s just me…)? The trauma from 2011 still haunts some of us to this day; seriously, though, Share a Coke managed to create a sense of belonging and connection that is in our memories 13 years later.

Unintentionally, it led to a 2% increase in US sales after years of decline.

Nike’s “Just Do It”

Just do it! Believe it or not, Shia LaBeouf’s motivational speech is only a small part of the campaign that has been lasting almost 36 years. “Just Do It” is Nike’s ever-shifting effort to capture the spirit of sport and competition as well as differentiate itself from its competitors, and boy, does it work.

Four decades of inspiration have really helped Nike to become what it is today, and arguably, like there is no Porsche without 911, there is no Nike without “Just do it.”

Old Spice “The Man Your Man Could Smell Like”

How do you turn a concept from 1937 into a fresh, humorous, and memeable brand that everybody likes? Ask Old Spice and Isaiah Mustafa. The campaign’s masculinity message is so unserious yet captivating, and most likely, this approach became the spice of the modern Old Spice.

Once again, not only did the campaign help with rebranding, but it has also led to a 125% increase in sales, becoming one of the most successful brand advertising examples.

Benefits of Brand Advertising

It’s not hard to deduce how beneficial a strong brand image is, especially these days. Nevertheless, let’s sum up the strong suits of brand advertisements into a clear list:

#1. Trust and Customer Loyalty

If the brand advertising examples above haven’t struck at least some association or connection with you, cheers to your stone cave! Being serious, when people feel emotionally connected to a brand, they are more likely to stick with it, even if a competitor offers a similar product. That’s what a good brand advertisement does, and that is its main benefit.

Harvard Business Review found out that emotionally connected customers are 52% more valuable than highly satisfied ones, so make your own conclusions.

#2. Premium Pricing Support

This one’s a bit less romantisized than “brand-customer relationship,” but for some it’s far more important. A strong brand lets businesses charge premium prices as customers view it as more prestigious *khem* Apple *khem*, even if the market has plenty of options at lower costs.

McKinsey & Company’s report claims that strong brands generate 31% more shareholder return and thus command at least 20% premium pricing over weaker alternatives.

# 3. Improves Customer Retention

Keeping high retention is one of the most difficult tasks both in adtech and martech. Needless to say, by regularly reinforcing the brand’s values, mission, and identity through advertising, businesses can improve customer retention and reduce churn, which leads to a 25-95% profit increase.

# 4. Boosts Word-of-Mouth

Did you know that 83% of people trust recommendations from their friends and family more than any other form of advertising?

The wide network of people who tell about your brand without ads, campaigns, and expenses – as marketers, each of us has sweet dreams of such effortless advertising. Well, brand awareness campaigns open the curtain for such organic growth.

# 5. Attracts Talent

This benefit isn’t as obvious, but trust us, your HR department will say Thank You and send you a paper heart every Valentine’s Day. A strong, well-known brand doesn’t just attract customers—it also attracts top-tier talent and valuable business partnerships.

That’s right, 72% of job seekers consider an employer’s brand before applying for a job.

Challenges of Brand Advertising

The definition is simple, the examples are memorable, and the benefits are finger-licking; now, what is the price to pay? Creating a strong brand isn’t the same as pushing the boulder to the top of the mountain for an eternity, but it still has its challenges:

# 1. Difficulties in Measurement

The first hardship is to be expected: brand advertising is difficult to measure. You can’t easily track clicks, conversions, or sales. And the bigger you are and the more markets you work with – the harder it is to accurately see the progress and the more scattered the data is. And even the customer data platform won’t help you much.

# 2. Long-Term Commitment

This challenge is a result of the previous one. Brand building isn’t an overnight process. It requires commitment, time, and money. The delay between investment and outcome will most likely turn into frustration, especially for a smaller-scale brand.

It gets even riskier once you work for a big fish. Imagine coming to stakeholders and trying to justify millions on your super-creative campaign when you can’t even confirm its success in the first couple of months.

# 3. Risk of Negative Publicity

Cancel culture is as strong as ever: one wrong tweet on your boss's account from 13 years ago, one wrong slogan in the campaign, and one wrong line in the video script – and you’re screwed. Negativity goes viral much quicker these days, so be careful!

We’re finished with the first part of brand advertising vs performance advertising; now it’s time to go into the realm of media buying tools and hard numbers.

What Is Performance-Based Advertising?

The goal of performance advertising is an immediate generation of numbers. Ad clicks, installs, sales, leads, and traffic – all of these could be the focus of a performance campaign.

This approach doesn’t require highly philosophical concepts like “customer relationships” or “brand reputation,” you take the numbers from analytics, see if they are as high as you want them to be, and make conclusions.

The Examples of Performance-Based Advertising

The examples of pure performance-based campaigns aren’t as spectacular as their counterpart, but that’s the whole point – efficiency over everything. That’s why, in this section, we’ll mainly concentrate on the results.

Shopify - Facebook and Instagram ads

Starting your own online shop in 2024 is like getting distracted by a push notification – very easy to fall into; so to generate leads from aspiring entrepreneurs, Shopify launched ad campaigns on Facebook and Instagram.

Shopify’s paid ads helped them maintain their position as a leading ecommerce platform, contributing to year-on-year revenue growth of 86% in 2020. The secret formula is accurate targeting and a large number of new store sign-ups.

Grammarly – YouTube and Display Ads

Our homeboys from Grammarly have been tearing up their niche, and to continue domination, they’ve started running performance advertising campaigns through YouTube and display ads in general. The focus was free trial sign-ups and downloads of browser extensions.

The results: 30 million users daily as of 2022 and a $13 billion valuation.

Amazon PPC Ads

Amazon has become a true monster in the digital advertising field. Their Amazon DSP and Amazon Ads platform, combined with Google Ads and a whole load of money, let the company drive incredible PPC results.

By 2023, Amazon accounts for 10% of all digital ad revenue in the U.S.

Benefits of Performance-Based Advertising

The benefits of performance-based advertising mirror its philosophy completely — they are easy to understand and focus on results.

# 1. Highly Measurable

Let’s start from the obvious. The whole point of performance-based advertising campaigns is to provide you with easily measurable results. You can basically track everything from click to conversion to sale. This transparency should give you a clear picture of what works and what doesn’t.

# 2. Pay for What You Get

“Brand image” is a great thing to think about, but you probably want to pay the invoices for results you can actually see. CPM, CPA, CPC – there are so many pricing models to choose from that don’t require guesswork and visiting an oracle to see if the campaign works.

# 3. Quick Results

The next benefit is speed. In this industry, there are benefits and verticals that won’t benefit much from long-term brand building; they need fast results, and that’s what performance-based advertising can give them.

# 4. Easy to Optimize

Performance-based advertising is data-driven, which we’ve already established. Because of that, it’s easy to experiment with, track underperforming parameters, and perform A/B tests, which, in return, could increase conversions by up to 49%.

# 5. Scalable

Probably the best thing about performance advertising is its scalability. Whether you’re a small business or a large walled garden, you’ll still make use of performance-based campaigns, as you can start with any price, advertise on any platform, and set up targeting.

Challenges of Performance Advertising

The hardships of performance advertising might not be that obvious. They include:

Rising Costs

The competition between demand-side platforms of all sorts is at its peak. As more and more ad businesses discover the power of programmatic advertising, the prices grow.

For example, the average CPC on Google Ads for industries like legal services can reach as high as $6.75, while for insurance, it’s around $3.77. These numbers were significantly lower just a few years ago.

Requires Continuous Optimization

You don’t just have the option to optimize performance-based campaigns – you need to do this in order to get positive results. Not only does it affect the load on your team, but it could also fatigue the user with the amount of content.

Risk of Low-Quality Results

Irrevelant leads, click fraud, and ad blockers – all of these deserve their separate bullet points, but to not bore you to death, we’ve gathered them here.

You see, the speed of results in performance-based advertising has its consequence: at first, you won’t understand how “clean” your data is. Maybe the audience you’ve attracted isn’t going to buy your product; maybe these visitors are just bots, or even worse – they didn’t see your ads since they’ve installed an ad blocker. Beware, in any case.

Performance-Based Advertising vs Brand Advertising: When Do You Use Each?

By this point, you’re probably tired of theory and crave short and easy answers. Well, let’s give them to you.

When Do You Use Brand Advertising?

Starting off with brand advertising:

• When launching a new brand: when entering new grounds, it’s impossible to gain profits with an unknown brand, so it’s either brand advertising or bankruptcy.
• When competing in a crowded industry: if many competitors offer similar products or services, brand advertising helps differentiate your business through emotional engagement. You aren’t buying an iPhone – you’re buying a part of Apple.
• When establishing long-term customer loyalty: your audience is niche, but they’ll commit horrible things for your goods – in that case, brand advertising helps keep it that way.
• When lacking retention: if your consumers don’t build memorable connections with your product, they’ll have no reason to stay with it.

When Do You Use Performance-Based Advertising?

As for performance-based advertising:

• Launching a new product or promotion campaign: if the goal is immediate sales, conversions, or customer acquisition, performance ads excel at generating results.
• Driving conversions: let’s say you’re a display ad network or ad agency whose client wants numbers and fast. Give them what they want with a performance-based campaign!
• Retargeting Warm Audiences: performance advertising is effective for re-engaging users who have already shown interest in your product or brand but have yet to convert.
• Measuring Direct ROI: if you need to closely track ad spending against measurable outcomes like cost-per-click (CPC) or cost-per-acquisition (CPA), performance advertising provides clear metrics.

But wait, this is not all.

Conclusion: What Is Brandformance Advertising?

As you’ve deduced already, an average media buying strategy often implies both brand advertising and performance advertising. Mix the two together, and you’ll have “brandformance”!

Brandformance is a relatively new concept that requires combining upper and lower-funnel advertising into one method. It was born because consumer media behavior has been shifting a lot in the past years, so it’s hard to reach your goals as an ad agency if you only focus on brand advertising vs performance advertising.

Although many advertisers are already shifting between both approaches all the time, not many of them actually use the term “brandformance.” We don’t know what the future brings, but we do hope that this article was helpful in getting a grip on the topic. If you wish to apply this knowledge in practice, why not use Epom’s white-label DSP?

Our platform will help with both brand advertising and performance advertising with a single and easy-to-use dashboard. Apply for a free trial and see which method suits you best!