Branding vs. Lead Generation – Ending the Budget War Once and for All
How is your company’s marketing budget divided up? In a lot of marketing departments, when it comes to budget, there’s a war being waged between brand marketers and lead generation marketers. And it seems that brand marketers are very much losing that battle. In 2007, 47% of marketing funds were going toward lead generation. Today, that number has increased to 72%.
How have lead generation marketers become so successful? The secret is their ability to show short-term sales impact. A study from the Institute of Practitioners in Advertising on marketing effectiveness in the digital era shows that direct response efforts yield fast results and quick hits. However, they become gradually less effective over time.
Brand marketing works on a very different time horizon. It takes longer to ramp up, but it delivers better returns in the long run. A year later, when the fruits of lead generation have long since fallen by the wayside, the results of successful branding are still going strong. That is, as long as a company has the patience to stick around and see their branding efforts’ success blossom.
Should I focus on Branding or Lead-Generation?
So which should you focus on? Quick results, or long-term ones? Well, ideally, both. While lead generation may be winning the war against branding, the best results happen when the two become allies, working together.
The same IPA study shows that the optimal balance of brand and demand is a 60/40 split - 60% branding, 40% direct response, in both digital and traditional marketing. That’s how you get optimal impact – pricing power, awareness, sales.
If your ratio is skewed too much one way or the other, you’re going to get suboptimal results. If you aren’t actively engaged in branding, then how do you show potential customers who you are and what you stand for? Too many companies focus on lead generation as a goal in and of itself, however, it’s only a means to an end. You may have generated plenty of leads, but without brand equity, there’s no motivation for those leads to convert to sales.
On the other hand, if you just have brand marketing without lead generation, you can’t move potential customers through the sales funnel. They may know your brand, but they’re not actually connected with your company. You can’t drive sales if there are no leads to convert.
Integrate Branding and Lead-Generation for optimal result
We’ve started to see the 60/40 rule in action ourselves. When our clients blend brand and demand they get much better results. The chart below shows the results of a recent client campaign. The client ran pure acquisition marketing for a time and drove a 0.2% conversion rate. But when the client blended brand messaging into the campaign, the conversion rate more than tripled.
In the end, the war on brand isn’t a war worth fighting. Remember that it’s not a competition. You all have the same goal, and you all play a role in reaching that goal. So negotiate a truce, with a 60/40 split of the budget between branding and lead generation. By finding ways to get your clients to invest in both tactics together, you increase the success rate for everyone!