Designing with EQ: Balancing Brand & Performance Media

At Carat, we understand that connecting brand and performance media is critical for brand health and business growth. When brands strike the right balance between the craft of brand building and the rigor of hard-working media, magic happens.  

In today’s media landscape, striking the right balance can feel like a moving target. Traditionally, performance media has been associated with short term sales uplift, while brand building has been understood to drive long-term growth. But in a connected media ecosystem, these norms are quickly becoming outdated. Recent research from Analytic Partners found that upper funnel branding tactics are 60% more effective over the long term than lower funnel tactics, but only 25% less effective in the short term than performance tactics¹. And when it comes to messaging, brand messages in ad campaigns outperform performance messages 80% of the time in terms of sales and ROI¹. This suggests that we have been presented with a false choice. It’s not about choosing brand over performance, or performance over brand – it’s about making the two work harder together.  

Missed Connections in a Connected Landscape 

In a connected media ecosystem, balancing brand and performance media is both easier and more complex. Technology is transforming upper funnel channels into addressable commerce platforms, blurring the lines between brand vs. performance. When Harvard Business Review reporters surveyed senior marketing executives at the 2022 Cannes Lions International Festival of Creativity about their top burning issues, twice as many selected “managing the tension between brand and performance marketing” over any other issue².  

In the face of uncertainty, our tendency as marketers – and as humans – is to prioritize what can be proven. Performance marketing has clearer KPIs; its impact on business is easier to prove. This has caused brand building to lose out more and more, with 61% of today’s media dollars focused on performance tactics and only 39% in brand building³. Instead of investing in what makes them special, brands have been pressured into justifying media spend with quantifiable short-term results. This is widening the gap between brands and consumers.  

It is our belief that the current investment imbalance is eating away at brand and missing key opportunities to connect with consumers. By connecting brands to what consumers want/need, and delivering the right experience in that time of want/need, we can drive brand momentum AND business performance. We call this marketing with emotional intelligence, or Brand EQ. 

So how do we strike the right balance? First, we must understand how we got to this place of imbalance.  

The Danger of Short-Termism  

Tough economic times have forced marketers to make tough economic decisions. The volatile climate of recent years has bred a culture of “short-termism”.  Multiple socio-political challenges facing the world today have had huge implications on marketing and media  – from war in Europe, to global inflation, to trade protectionism, to perhaps the largest, our climate – all of these factors have created an urgency to drive growth in a shorter period of time³. As a result, our industry has been overinvesting in short-term media impact and underinvesting in long term brand equity.  

Also driving a “short-termism” mentality is the expanded role of the CMO. More CMOs today cite short-term sales/revenue growth as their primary responsibility (51%) than medium-long term brand health (36%)⁴. With the average brand campaign lasting 24 months, and the average CMO tenure lasting 21 months, a need to drive short-term gains has given rise to a preference for performance media.

The Importance of Brand  

We know from Carat’s own research how important brand building is⁵. First, brand building has a positive impact on stock price. Businesses who have consistently nurtured strong brands see an increase in stock price over time, while businesses who have underinvested in brand see a decline. 

Second, we have found a direct relationship between the emotional intelligence of brands and their business performance. Brands who exhibit higher emotional EQ by creating value for people – living their brand purpose, communicating with meaning, and delivering exceptional customer experiences – outperform the market on growth.

On both studies we found that the highest emotionally intelligent brands outperformed every measure of stock performance over the last decade. Brand building that delivers emotional investment for people pays off.   

Designing with EQ 

Designing media with emotional intelligence requires a deep understanding of how the total media ecosystem works together to deliver consumers’ needs. When we view brand-building as the creation of demand, its relationship to performance media becomes more clearly defined. Demand is created when new customers become aware of – and start to consider - a brand. This is the point at which they become more responsive to performance marketing efforts⁶. Efficient conversion from performance media requires sufficient demand generated by brand media.   

Designing media to better connect brand and performance requires an emotionally intelligent marketing model. A deep understanding of how media engages consumers and influences their brand decisions is critical for delivering the right experience to the right consumer in the moment they are most primed for it.  So how do we plan for this?  

1. Drop the distinction between upper and lower funnel 

First, we need to stop assigning channels an upper or lower funnel role and start designing them to work together. The video landscape alone is a prime example of how media now acts as a connected brand accelerator.  An explosion of video across channels, platforms and formats has disrupted channel-led thinking and enabled us to connect demand with performance in the immediacy of the moment. With CTV and social bringing lower funnel capabilities to a historically upper funnel video “channel”, we need a clearer strategy for the roles each channel can play, ensuring they feed off each other to connect brand and performance. This requires a deeper level of audience understanding to identify the environments and formats that will perform best for the objectives we are trying to achieve.  

    2. Be consumer-centric, not channel-centric 

Generating and capturing demand starts by understanding how today’s consumers discover, engage with, and buy brands through media. The ideal balance of brand versus performance within your mix will depend on the consumer challenge – understanding important factors like how do consumers perceive your brand? How much does price and convenience factor into to your consumer’s purchase decision? 

Once we understand the optimal balance of brand and performance for the specific task at hand, we need to maximize their relationship with each other within the media mix. Instead of assigning each channel a dedicated “brand” or “performance” role, we leverage a wide range of consumer data signals to deliver the right experience in the right moment:  

• For brand activity, we leverage attention data. Attention increases receptivity to brand messaging and improves recall.  
• For performance activity, we leverage intent signals. Intent lets us intercept consumers in the moments are most primed to take action.

    3. Plan for attention (brand to performance) 

Research has proven that reach alone doesn’t drive brand impact⁷ but rather, attention is a much bigger predictor of media’s effectiveness⁸.  Since 2018, dentsu has been on the forefront of measuring attention to advertising through our Attention Economy initiative. With years of research under our belt, we now have an extensive understanding of the drivers and the value of attention across video, display and audio platforms. Our research has shown there is a direct correlation between those actively paying attention to a brand message and how brand health metrics (consideration, ad recall, perception, purchase intent) perform.  

Leveraging attention norms and benchmarks for cross-channel planning provides the best opportunity for a consumer to resonate with the message. This in turn has a positive impact on business performance - we’ve seen time and again that higher attention is directly correlated to higher conversions⁹. 

    4. Leverage intent signals (performance to brand) 

In this new media landscape, performance media is no longer about the most efficient conversion. To maximize performance, we leverage a multitude of different consumer signals that indicate intent – a combination of cultural and contextual signals, behavioral signals, and in-market signals help us infiltrate moments where consumers are primed to take action, or to take advantage of an offer. Performance media needs to be dynamic to respond to both consumer signals and business needs. We’ve shifted some of our promotion-heavy clients from fixed promotional windows to a hybrid fixed/fluid approach that can flex according to business needs with great success. The faster we uncover customer intent, the faster we can optimize and refine performance. 

Intent signals don’t just drive short-term impact, they also build emotional intelligence by meeting consumer needs in the moment. We have proven through our Brand EQ research that “motivation” (the right consumer experience) is a key driver of high performing brands⁵.  

   5. Measure soft and hard KPIs 

The soft KPIs associated with brand-focused activity tend to undervalue its contribution to business results. Recent research shows that traditional attribution models tend to overestimate the short-term impact of media and marketing and underestimate the longer-term impact. And yet total ROI that includes long-term effects is significantly higher than short-term ROI alone⁷. This has been one of the key drivers of the short termism mindset that has led to an imbalance of brand-focused media. To strike the right balance between brand and performance media, we need to start emphasizing and nurturing both near-term and longer-term results.   

 The Great Brand Re-Set 

Contrary to popular theories, there is no fixed percentage brands should target to best balance brand and performance media. The best balance for your brand is achieved by understanding how consumers discover, engage with, and buy your brand and then activating through an emotionally intelligent marketing model. Last year’s “Barbie mania” marketing is proof of this. Immersing consumers in the world of Barbie through brand-led marketing generated $1B in box office sales¹⁰. Perhaps this was the reminder we all needed that strong performance stems from strong brand activity.  

Sources 

1. Seitz, M. Finding the right brand/performance balance in 2023. WARC. December 2022.  
2. Favaro, K., Lamberton, C., and Stengel, J. How Brand Building and Performance Marketing Can Work Together. Harvard Business Review. May-June 2023 issue.  
3. The Great Brand Re-Set. Dentsu UK training materials. April 2023.  
4. Herbert, D., Keane, M. Dentsu CMO Navigator. May 2023.  
5. Healy, S. Carat Brand EQ Report: The world’s most emotionally intelligent brands. 2022.  
6. Rethinking brand for the rise of digital commerce. WARC. June 2021.  
7. Evolution of Marketing: Future of Measurement. WARC Strategy. April 2023.   
8. Attention Economy. Dentsu. Research spanning 2018-2023. 
9. Dentsu tech client case study using Adelaide Attention solution. 2022.  
10. Korn, J. ‘Barbie’ on track to become highest grossing domestic film of the year. CNN Business. August 14 2023.