Advertising for small and medium businesses

Advertising is a shortcut to letting your audience know you exist so they can buy your product. It generally serves two purposes: building the brand over the long term and driving sales in the short term

Brand advertising is broadly about positioning your brand and product in the customer’s mind so they know who you are, think positively about your business and remember you when they need what you sell. Most people don’t need what you sell right now, but many will need it at some point in the future. Brand advertising helps position your brand as the one they think about when that need arises.

Brand advertising is often measured through increases in awareness and consideration. It is a long-term tactic that aims to create future demand by increasing the number of people who are likely to think of and choose your brand when they are ready to buy. It takes time to have an effect, but that effect is long-lasting and can continue long after the advertising has stopped.

Performance advertising, or sales advertising, tends to be digital. It is advertising that aims to drive sales immediately. For online sales, it links directly to sales pages on the brands website and optimises towards people who are buying the product. That means it tries to find more people who are similar to those who have already bought the product, becoming more efficient at selling that product over time. For offline sales, in shops, it tends to focus on offers, discounts and price.

Performance advertising is measured in sales and cost per acquisition: the cost of making a sale. It is short-term and immediate.

On that basis, why wouldn't you just do performance or sales advertising?

To begin with, you probably should. However, performance advertising tends to have a limited effect and a very reactive, short-term impact. As soon as you stop advertising, the effect declines rapidly. This is because it is effective for people in the market who want your product right now. It helps divert those sales away from a competitor. But most people aren’t in the market for your product right now. Performance advertising tends to focus on immediate reasons to buy, such as product features, benefits, offers, convenience or price. It is designed to drive action rather than be memorable.

Brand advertising, on the other hand, does not drive immediate sales at the same rate, but it does drive sales over the long term, especially when combined with performance advertising. Brand advertising tends to be less about price and features and more about how the brand or product improves your life. It's at its best when it's emotional. That can be funny or cute or happy or sad. It's memorable and frames the brand positively in the audience's mind.

The effect of brand advertising also continues after the advertising stops, and it compounds. If you do a round of brand advertising and raise awareness, another round of brand advertising will raise awareness on top of that initial increase in awareness. And awareness is a primary driver of long term sales. A customer can’t buy your product if they don’t know you exist. 

Over time, this cumulative effect can create a much larger pool of potential customers who already know, trust and remember your brand, making all future marketing and sales activity more effective.

This is why the most effective marketing strategies combine both approaches.

Performance advertising captures demand that already exists. It turns interested prospects into customers.

Brand advertising creates future demand by ensuring more people know, remember and trust the brand when they enter the market.

Research by Les Binet and Peter Field, published in The Long and the Short of It, found that the most effective campaigns balance long-term brand building with short-term sales activation. While the ideal balance varies by category and circumstance, many successful consumer brands invest significantly in both.

Used together, each makes the other more effective. A strong brand improves the performance of sales advertising, and effective sales advertising helps convert the demand that brand advertising creates.

References

Binet, L. & Field, P. (2013). The Long and the Short of It.

Sharp, B. (2010). How Brands Grow.

Ehrenberg-Bass Institute for Marketing Science. Research on mental availability, physical availability and brand growth.

Binet, L. & Field, P. (2023). Effectiveness in Context.