This Marketing Briefing covers the latest in marketing for Digiday+ members and is distributed over email every Tuesday at 10 a.m. ET. More from the series →
That may seem like a strange statement. Aren’t marketers supposed to be stewards of their brands at all times? Shouldn’t they already know how to do just that? (Well, yeah.) But over the past few years, there’s been tension between the focus on the short-term – the need to drive performance and the eventual overreliance on performance marketing – and long-term with traditional advertising and brand building.
For example, after a lackluster earnings report for the fourth quarter, Nike has been in the spotlight, with some pointing to shifted focus on direct-to-consumer as well as performance marketing as reasons for the brand’s disappointing results. As previously reported by Modern Retail, Nike’s digital sales were down three percent year-over-year with analysts pointing to investments in direct-to-consumer as a big issue.
Nike’s story, which got more attention last week after a former Nike exec, Massimo Giunco, a former senior brand director, viral post on LinkedIn about what went wrong, seems to be one of hubris. In taking the gas off of the brand pedal to focus on performance, there was an assumption that the brand would always be top dog and that they could rest on their laurels. That hasn’t been the case. Now, Nike is reportedly reorganizing its marketing division so that brand storytelling is its own division again, a signal to the market that brand building will get increased attention.
Nike is far from alone in managing the difficult balance between performance and brand. There was a pendulum shift in marketing organizations to focus on performance, seemingly above all else, a few years ago. The rise of direct-to-consumer brands at the time, many of which were basically performance marketing brands, caught the attention of C-Suite executives in major marketing organizations. The opportunity to truly track what was working and what wasn’t – at least, in terms of driving sales – and lean into that was all too tempting to budget-conscious marketing execs.
“A lot of people fired their brand CMOs and hired performance [marketing] CMOs,” said Mo Said, founder of creative shop Mojo Supermarket, when asked about the pendulum shift to performance marketing in the industry. Per Said, there was thinking in the C-Suite that traditional marketing tactics weren’t effective and that performance marketers knew how to get attention right now and show the C-Suite what was working. “But now we’re realizing that we need brand so a lot of the performance marketing people who understand brand are the hottest marketers right now.”
The age old refrain, marketers know 50% of their advertising is working but they don’t know which half, was something “we got close to figuring it out,” said Leah Meranus, CEO of dentsu X North America, adding that if a marketer wanted to make 100% of their media accountable they had the sense that they could do that. “I think we got hooked. We’re so immediacy-driven and short termist. We like results today. It’s part of our instant delivery, Amazon culture. We’ve translated it to our jobs as marketers. We want to see that number today.”
Meranus continued: “I’m [not] gonna wait three years for the brand to grow. I think we got caught on it. We stopped filling the funnel, you hate the funnel, but let’s be real like it’s kind of there for a reason.”
As marketers recognize the pendulum shifted too far into performance marketing, they’re now trying to find a happy middle ground between rather than shift back to brand. “What a lot of brands are seeing is that the perfect formula is this healthy marriage between performance marketing and brand building,” said Natalie Nymark, president of Pereira O’Dell. “Having those two things work in concert, that’s your best bet.”
Returning some focus to brand building, with some marketers earlier this year working on brand building RFPs recalibrating priorities, has marketers asking how to balance both brand and performance as well as how exactly they can build a modern brand. Having an evergreen ecosystem for a brand, rather than focusing on performance campaign after performance campaign, is one element of doing so, according to Daryl Giannantonio, head of strategy at VML.
“That’s the big shift for brands, how do brands become evergreen?” said Giannantonio. “We’re having a lot of conversations with clients [about this]. Some of them are saying, how do I do this? I think they know they need to shift, but they don’t know how.”
She continued: “You have to have a consistent strategy. We got broken as an industry because we started chasing moments and tactical things. We almost let the moment drive it more than like the brand strategy.”
Aside from finding the right balance between brand and performance marketing, modern brands need a consistent strategy and overarching brand ecosystem that can give a brand a sense of where it makes sense to tap into cultural moments, like say that of brat summer, according to Giannantonio.
Traditional brand building was much more controlled. Marketers could control how their brands existed and much of that was one-way communication. Now there’s a constant feedback loop from consumers and the expectation of two-way communication is a constant reminder that traditional control has to be relaxed.
“So all of that fear when brands are like, ‘Well, I can’t give up control,’ that notion of giving up control became a little bit of a marker of a modern brand,” said dentsu X’s Meranus. “I think that ability to let go [is part of modern brand building]. And now if you take it a step further, let’s call it the 2.0 iteration of the modern brand, we think about it as experiences.”
How brands create those experiences for their desired consumer audiences is varied. The modern brand has to be accessible to consumers across the various channels where they are spending their time – social fragmentation doesn’t help – while continuing to drive sales with performance marketing and having a solid structure for what the brand should be. Even if a brand is doing all of that, it can still not hit with consumers.
“The amplification of voice from consumers makes modern brand building very complicated,” added Meranus.
3 Questions with Eric Neher, CMO at wellness tech company Canopy
There’s a lot of competition in the wellness space right now. Tell us one way Canopy is trying to stand out?
Over the past year, we’ve really ramped up the gifting and seeding side of our business. [Seeding is where brands send free products to influencers in exchange for social media promotion.] So as our product assortment has grown, we’ve exponentially grown the number of products that we’re gifting out to influencers and creators. The idea there is to get as many impressions through the social platforms as possibly can through our gifting initiative.
Would you say impressions are your key metric at the moment?
As a small brand with limited budget, we need to always be evaluating the efficiency of everything that we’re doing from a marketing perspective. In terms of organic reach brand awareness, we’ve been very focused on the metric of impressions. We have a mission of getting as many organic impressions of Canopy out there into the world [as possible]. We’ve created our own tools and systems for tracking and evaluating the number of impressions that we’re able to drive. Then, [we figure out an] associated media value with those impressions. Anything that we’re doing where the goal is impressions, get as many eyeballs on the brand as possible, those impressions get pulled into our internal tool that we use so that we can then evaluate.
How is Canopy using influencers and content creators?
Our influencer manager is focused on developing relationships with the right creators and influencers. When I say that, we’re really not looking to develop transactional relationships. We play a long game when we’re developing a relationship with an influencer. — Kimeko McCoy
By the numbers
Ignore the medal tables, NBCU’s already run away with this year’s advertising records. Mark Marshall, Chairman, Global Advertising & Partnerships, NBCUniversal, said that the broadcaster has “secured the highest Olympic and Paralympic advertising in the history of the Games,” last Tuesday. The figures bear out earlier predictions that this edition of the Games would attract a broader set of advertisers than previous events. — Sam Bradley
- $1.25 billion: the advertising revenue record surpassed by NBCU, less than a week into its 18-day coverage period.
- Twice: the amount NBCU said digital revenue, which includes ad sales from Peacock’s newly available programmatic ad inventory, it had taken compared to the Tokyo Games.
- 70%: the proportion of NBCU advertisers new to the Olympic Games. The broadcaster said it’s raked in $500 million from first-time sponsors of its Olympic coverage.
Quote of the week
“With the brand clients, what they care about is the perception of the brand and the implications to brand perception. It’s a perception worry.”
— Cristina Lawrence, evp of consumer and content experience at Razorfish, when asked about client hesitancy with AI as the muddiness of AI labeling and lack of guardrails gives some clients pause.
What we’ve covered
- Inside the deal structure of Outbrain and Teads’ billion-dollar merger
- Criteo says Google won’t pull an Apple when it asks whether people want third-party cookies
- Brat Summer’s sun might be setting, have marketers noticed?
