Direct response vs branding: should you pay for upper funnel activity?

There are several channels which sit in the paid media category, each with their own advantages and disadvantages. Different channels can be used to achieve different objectives, and the channels you choose to focus on should reflect your unique business goals.

One factor to consider when determining your paid strategy is how much budget you want to put into branding. With more brands and websites fighting for online visibility now than ever, standing out from your competition is hard; creating a solid brand with a good reputation is an effective way to cut through the noise and tempt customers to your business.

The rule of seven

There is a well-known “rule” in marketing which says an individual must see or hear of a brand five to seven times before they are willing to try them out. While the reality isn’t such a hard and fast figure, there is no denying that the more someone sees and hears of your brand, the more likely they are to trust you enough to part with their money. Three in five shoppers prefer to buy from a brand they are familiar with, and once they have engaged with or bought from your brand that first time, brand loyalty is increased by regular online exposure.

Direct response vs branding: how and where to split your budget.

There is no one-size-fits-all rule of how much you should invest in branding vs direct response, however, there are a few questions you can ask yourself which will help to make this decision.

What do you sell?

What you sell partly determines how important brand awareness is to your digital strategy. For example, if you are a retailer selling other brands’ products, your own brand is not as important as it is more likely that people will be searching for the brands you stock. If you only sell low-value, low-risk products, for example, low-cost stationery or cleaning products, having the right product at the right price is more important than brand. For a high-value or high-risk product/ service, for example, a bespoke kitchen or car insurance, having brand awareness is important as consumers need to be confident in their purchase as getting it wrong can have huge implications.

What are your short- and long-term business goals?

If you have an aggressive sales target, direct response ads are much more likely to help you reach that figure in the short-term. If your goal is to grow your customer base tenfold over the next year, branding is going to be crucial in reaching new potential customers. Most businesses will have both short- and long-term goals so will need to find the right mix of both.

Has the number of searches, clicks and conversions you have received through branded terms stayed static or even decreased?

A decrease in branded searches can suggest that you have not reached new audiences lately. Investing in brand awareness activity can help to increase the number of new people who see, and search for, your brand.

How much organic visibility do you have?

If your brand is already well known, you have high organic visibility in the SERPs, and your organic social content is widely shared and engaged with, you may need less branding activity than a start-up or a brand who is not well known, as less activity is required to maintain brand awareness than build it. That said, if there are a few big players in your industry or if you rely on impulse purchases, maintaining a high level of brand awareness activity is important.

What activity are you currently carrying out?

Rather than being distinctly different entities, branding and direct response activity sit on a spectrum, and you may find that your current strategy has a level of branding already involved. Paid social and display campaigns can offer high levels of branding, even when they are direct response focused, due to the visual nature of these type of ads; for example, TrueView for Action campaigns on YouTube are aimed at driving conversions but drive the same high level of brand awareness as standard video advertising. Analysing your current activity will help you to identify where the gaps are.

Key takeaways

The value of branding is huge and, while it will always be impossible to fully measure the full output of the investment, tools like attribution and brand lift studies can tell us more about the impact than ever before. The concept of offline and online branding is gradually disappearing; many publishers now combine their offline and online offerings together in one package, and TV and radio advertising is becoming more readily available in the same platforms as digital-only strategies such as display.

There is no right or wrong split of branding vs direct response advertising. Looking at both channels as a whole and maintaining the flexibility to move budgets across both is a much more efficient way to utilise budgets and ensure that you have a full-funnel strategy, with all channels working together to achieve your short- and long-term goals.