Awareness vs. Performance Marketing

15 Feb 2021

Watch the video here: (4 minutes)


Prefer to scan? Here's the video transcript

Whenever you’re thinking about marketing for your business, there are often two competing considerations: awareness marketing on one hand, and performance marketing on the other.

A creative agency will tell you that awareness marketing will generate sales eventually, and a more technically focused agency will tell you that awareness marketing is a waste of time and that all of your budget should be put towards performance marketing to directly drive sales or leads.

As with most things: it’s not quite as black and white as that–the truth is somewhere in the middle.

In this video, I’m going to explain to you (in Plain English) how awareness and performance marketing are interlinked, and why you should care about both of them.

Awareness and performance marketing

So, on one hand, we have awareness marketing; which covers any marketing activity whose core goal is to build awareness of your brand in the minds of potential customers and to create an association between your name and logo, and what it is that you do.

Some examples of awareness marketing would be YouTube video ads or running banner ads on TradeMe or Stuff–these are unlikely to generate clicks to your website, but they do a good job at building awareness of your product or service.

Most forms of traditional media fall into this category too, such as newspaper ads, billboards and radio.

On the other hand, we have performance marketing; which covers any marketing activity that is designed to directly drive transactions or leads to your business.

Examples of performance marketing include Google Search Ads (formerly known as AdWords), social media ads and email marketing–all channels where you’re asking someone to take an action, and that action is measurable. 

So how does awareness and performance marketing affect each other?

The link between awareness and performance marketing activities is pretty clear in one direction: people can’t engage with your product or service if they’re not aware that you exist.

The link in the other direction can be a bit trickier to see–but it’s important to understand, so let’s look at that now using Google as an example.

Quality Score

Google’s primary goal is to connect people with useful information as quickly as possible when they make a search–if they can sell an ad or two at the top of the search results, then great. What they don’t want is for paid ads to diminish the overall effectiveness of their platform for users.

The way that Google ensures that the average quality of ads on their platform stays high is by using a tool called Quality Score.

Quality Score is exactly what it says on the tin: it’s a score out of 10 which tells you how useful and relevant Google thinks your ads are for their users. A higher-quality score is rewarded with a cheaper cost per click for that ad, and conversely; a lower quality score makes your ads more expensive. Quality Score is specific to Google, but Facebook also has a similar mechanism in place for their platforms.

All else being equal, if your ad has a Quality Score of 10 and your competitors has a Quality Score of 1, they’ll have to pay up to 10-times the amount to occupy the same ad space. This eventually forces poor performers out of the market and ensures that only high-quality ads are shown.

Expected CTR

One of the major factors that goes into determining the Quality Score of your ads is how frequently Google expects people to click through your ads. If people are choosing to click through your ad more often than the others shown alongside it, that’s a pretty good indication to Google that your ad is useful and relevant to their users–so you’ll be rewarded with a higher Quality Score and subsequently cheaper rent on the results page.

This is where all of the hard work you’ve put into building awareness for your brand has a direct financial impact: when presented with 2-3 ads at the top of the results page, people are far more likely to click on an ad if they recognise the brand name behind it.

The more people that recognise your brand and click your ad over your competitors’, the more highly Google thinks of your ad. And the more highly that Google thinks of your ad, the cheaper it is for you to get people to your website and ultimately to generate leads and customers. 

Good brand awareness can often be the difference between a high-performing campaign that reliably generates new customers profitably for your business, and one that is economically unviable.

Summary

  • Awareness and performance marketing have a symbiotic relationship–neither can perform optimally without the other:
  • Awareness marketing doesn’t work well in isolation as there’s often not a strong enough call-to-action for people to take a step towards becoming a customer
  • And performance marketing doesn’t work well in isolation because brand awareness has a direct impact on how much it costs to get a potential customer to click through to our website