Performance marketing is killing brands

With the rise of Google and Facebook came the allure of digital performance marketing.

The sales pitch was simple and compelling enough - 'why spend your marketing budget on media you can't really track when Google and Facebook not only give you the eyeballs that you want, but also the means to measure how effectively your money got spent.'

Marketers bought it hook, line and sinker - redirecting almost all of their media spend away from traditional brand building methods that appeared wasteful in favour of digital.

Optimization, activation, streamlining and efficiency became the dominant marketing words. Interestingly, each of them implied the management and acceleration, rather than the creation, of demand.

But countless studies have proven that an over reliance on short-term performance marketing is not as effective as more traditional, long approaches when it comes to building a brand that is liked and recognised by people.

The result is that brand valuations of even the biggest brands in the world are taking a significant knock, according to Interbrand.

Reporting on the latest Interbrand Best Global Brands Report, Marketing Dive noted:

Interbrand has tracked the value of the biggest brands globally since 2000, yielding key insights over the last quarter century about how brands are driving performance. Specifically, the report has revealed that while performance marketing strategies can drive short-term gains, a disregard for long-term strategy is costing brands in unrealized value. For the last year, that value equates to $200 billion in lost revenue, per the report. Since 2000, that equates to at least $3.5 trillion.

In the mad scramble for efficiency and ROI, marketers have put a bullet through the head of the goose that was driving everything forward.

Silicone Valley are laughing, Madison Avenue weeping.

In our latest briefing that we offer to our clients, we are tracking what this then means for the future of marketing and how some brands are taking this change to heart and responding.

BTW- Ideally the budget split between brand marketing and performance marketing should be around 60/40, with at least 8% or more of your annual revenue being invested back into your marketing effort.