A common concern for small businesses
How should your marketing budget be divided up? In a lot of businesses, when it comes to budget, there’s a war being waged between branding in traditional print media (like Clayton Parish Neighbors) and lead generation from social media or google search. And it seems that traditional branding is very much losing that battle but not the way you may think it is. In 2007, 47% of marketing funds were going toward lead generation. Today, that number has increased to 72% but marketers have been looking at a missing key component.
How has lead generation marketing become so successful? The secret is the ability to show short-term sales impact. A study from the Institute of Practitioners in Advertising (known as the IPA Study) 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 (a key component) 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, if a business has the patience to stick around and see their branding efforts’ success blossom.
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 businesses 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 business. You can’t drive sales if there are no leads to convert.
Case in Point - Here is the 60/40 rule in action. 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 conversation rate more than tripled.
In the end, the war on brand isn’t a war worth fighting. So, negotiate a truce, with a 60/40 split of the budget between branding and lead generation. By investing in both tactics together, you increase the success rate for your business.
Chris Heeb is the owner of Midwest Faith Media LLC, and the Publisher of Clayton Parish Neighbors, a monthly magazine that strengthens communities by shining a spotlight on neighbors and celebrating their contribution to the community. Their business sponsors are embedded into this local faith-based network of thousands of homeowners, and enjoy the benefits of promoting their local business to the St. Louis Central Corridor. To find out if your local business qualifies as a Sponsor, schedule a zoom chat with Chris Heeb at www.drchrisheeb.com