Brand v performance: how these 2 brands struck the right balance in 2023

Marketers have always asked to do more with less, even without threats of a recession. Economic uncertainty, however, has added even more pressure to protect brand equity, while amplifying the importance of efficient, targeted, and measured ad spending.

Do you cut budget from brand or performance? Do you focus on building brand equity to ride out the cost-of-living crisis, or do you double down on promotional trading activity? These are questions every brand has asked in recent years.

The role of brand and performance in the media mix

We’ve all been in board meetings where brand marketing is seen as a ‘nice to have’, but brand marketing isn’t just about driving awareness. It has a huge impact on some of the most important business metrics. Customer retention and lifetime value are two of the worst-affected metrics when budgets in brand marketing are cut.

According to a 2023 study, a 5% increase in customer retention can increase a company’s profitability by 25% to 95%.

Performance marketing has a huge role to play in driving conversions and acquisitions across digital channels; brand and performance strategies don’t work without each other. Ultimately, brands underinvesting in brand are missing out on quicker exploration-to-conversion funnels, and when you underinvest in performance marketing, you lose sales to competitors. The list of reasons to blend brand and performance has never been longer.

So, why can’t we just play nicely and agree we both need each other? Here are two brands that prove you can.

Marks & Spencer

When you have an image problem, you’d be silly to just invest in performance marketing. Long-term brand-building activity is needed.

British retailer Marks & Spencer has been investing heavily in both brand and performance marketing, and it’s paying off. M&S’ balanced approach has helped it maintain its position as a leading retailer. According to its 2023 annual report, M&S has seen a significant increase in group revenue, reaching £11.9bn.

M&S has been using storytelling in advertising campaigns, such as the famous ‘Spend It Well’ campaign, to build a strong brand image, moving away from its previous positioning and building emotional connections with a new customer base.

On the performance marketing side, M&S has been using targeted online ads and email marketing to drive sales, focusing on data-driven performance marketing to drive higher lifetime value (LTV). It’s a pretty good example of how to balance direct response and emotive storytelling.

J.Crew

In March this year, American clothing retailer J.Crew launched the first campaign of a year-long 40th-anniversary campaign highlighting its four decades of history. The campaign has included out-of-home advertisements, in-store events, and partnerships with both celebrity influencers and micro-influencers.

While it still engages in top-of-funnel brand marketing, the brand’s emphasis is on nurturing customers with performance marketing, using first-party data across key digital acquisition channels to convert new high-value customers. This strategy has helped J.Crew bounce back from the pandemic, with 2022 revenues 30% higher than pre-pandemic levels.

J.Crew’s customer acquisition strategy has been focused on quality over quantity of new customers. Last year, the brand rebranded its loyalty program to J.Crew Passport, adding more perks to lower membership tiers to encourage return shopping. The brand also launched a resale program in January, which not only brings in revenue, but also acts as a marketing tool. It offers a lower price point for entry into the brand, and showcases the longevity of its product.

The brand still discounts regularly, using paid social and Google Shopping to push seasonal promotions, sitting alongside brand activity to drive conversions at the lower end of the funnel.

Brand marketing isn’t just about fluffy marketing videos (looking at you, John Lewis). It’s about building connections with audiences, and better understanding them to drive your performance marketing forward. Brands with the best understanding of their consumers will win.

But let’s not be politicians, focusing on what makes us look good to our stakeholders in the short term to win votes and praise. Let’s agree to invest in both the short and long term.

The biggest pay-off comes from balancing our investment in brand equity building campaigns, and performance-focused activity.