In a recent industry conference, I participated in a panel discussion on brand awareness versus direct response (DR) advertising. Topics included how important is brand awareness for online acquisition activity; how should startups go about brand awareness with a limited budget; how should companies split budgets between branding activities and DR? how should brand awareness campaigns be measured? and more.
The panel was actually quite interesting as it included long time brand promoters who deal with activities such as sports team sponsorships and other pure brand activities, among some long time pure performance marketers, including this writer.
As I pondered the issues, I got some thoughts that were actually already rooted in Seperia’s de-facto modus operandi, but never articulated.
So here’s my take on the topic, divided into 5 main question and answers:
Does Brand awareness impact DR?
Some of the audience maintained that in the internet era, brand has become less important and users often are brand-agnostic on the web. So, does brand awareness really impact the behavior of people online?
Well – the answer is definitely positive, depending on the industry. I’m sure most readers would rather buy on Amazon, than on an unknown retailer, given the same price. Further, most users will tend to click on an amazon ad rather than on an ad of a non-brand, giving amazon a pricing edge on CTR/relevancy based systems such as Google AdWords and Facebook ads. So, strong brands enjoy 2 or 3 times higher click through rate, conversion rates and ultimately lower cost per acquisition. This applies not just for global giants such as Amazon, but also for niche and local well known brands.
With that said, many online markets and new niches are forming all the time, and there aren’t incumbents in it. In such emerging markets, brand awareness is not a critical factor and the image achieved with an impressive website and other online signals (3rd party reviews, media mentioning, vibrant social page…etc) can go a long way.
How should a startup go about creating brand awareness with a limited budget?
Beyond the trivial of having a product with certain unique benefits and an addressable market, I would say that startups need to research and focus initially on a small group of customers who are in dire need of their product. For this group both brand awareness and DR efforts need to be applied, hand in hand. Think of it as a sort of “micro branding”: Facebook custom audience ads, as well well as search, can be a good starting point to pinpoint this small, targeted audience and get them to notice and click through to your site or page. From there, remarketing can play a significant role in being re-observed and remembered. Which brings us to question number 3;
How should we split our ads between brand awareness and DR ads?
Traditional offline ads (think coke-style billboard ads) do not exist to create a sale now. Rather, they exist to influence mindsets and create preference later on.
In contrast, digital ads should not be 100% brand oriented, nor a 100% DR oriented. Given the interactive nature of the web, users should always be given the option to take action right away, if they are ready to do so. People often expect the option to complete a transaction online, quickly and seamlessly. On the other hand of the scale, even a sales oriented ad should contain an element that implies something about the advertised brand, even the slightest.
Also, bear in mind that different people are in different stages of their research / consideration cycle. For people in the beginning of the cycle (or “upstream”), we want to serve ads that communicate product / brand values and benefits. For people in the end of the cycle (i.e. “downstream”) we want to serve hardsell ads with things like discounts, free trials, free support, and other promotions..
Do running search ads on generic terms contribute to brand recognition and preference?
Yes, they do. Even users that don’t click on the ad, tend to remember the brand to a certain degree. Recently, we have seen a client in the travel industry where the February Google removal of right rail ads (and subsequent decline in impressions) influenced adversely the number of brand searches, even though the number of clicks from generic search ads remained the same! The only explanation was that a portion of the search audience did not click through the ads, yet recalled the brand’s offer and at a later stage searched for it directly.
With that said, building a strong brand can not rely only on online ads. It takes a consistent and long term effort, offline and online, to establish a remembered and esteem brand.
How can a company measure and quantify the value of a brand campaign?
For this, we got some interesting answers from panelists and audience including the change in the level of enquiries from partners/ affiliates. More concrete ways to measure the “before and after” are:
- Volume of brand searches – did they increase considerably following a brand campaign launch. Did they decrease after the campaign was stopped?
- Click Through rates on a brand’s search listings, paid and organic – did they rise?
- Direct visits to the brand site
- Conversion rates
- Retention rates
A brand in a strong momentum should enjoy a lift in some or all of those metrics and others. The important thing to keep in mind is that in a mobile, fast paced world the lines are getting blurred between online and offline, between DR and brand ads. More importantly, you need to create an overall system that can segment your users into different ‘buckets’. Then, marketing creativity should kick-in addressing the needs of each segment. Good luck!