We spoke to more than 40 startup brand managers and this is their shared struggle.

“The brand is your company’s only competitive advantage, that cannot be copied,”people say. The ambition is to build a unique, well-known and respected brand.

 

Branding in startups

Branding is important; this is what most people agree on, not only in b2c industries where you try to directly cater to the end customer. It’s not the most important thing to do right away when starting a new business, but it becomes of increasing importance when you strive for a relevant chunk of market share in a competitive environment.

At Dalia, we have talked to many brand managers of grownups (ie. what my friend calls startup companies that have proven their business model and pursue a rapid growth path). Many of them said that branding was notespecially important for them in the first place, but became increasingly relevant once they saw their business getting traction.

“First, we put every available penny into performance marketing — it started as a quick fix to generate leads & sales and got managed more and more professionally over time. But after a couple of years, we saw a decreasing effect of the additional effort we put in.

This is when we started to actively think about branding.”

— every marketing manager

The “Money in — Money out” curve of Marketing

Can branding be a question of microeconomics? Well, it certainly should be. In a world where you can spend each dollar and every hour of work only once, branding competes with everything else, that has the potential to improve your company’s performance.

Branding in a world dominated by conversion rates

The brand managers we work with are KPI-driven and feel the urge to track their success — and their contribution to the company’s bottom line. This, we heard, was quite challenging for most of them because their entire organization had been growing on a simple equation:

“High Revenue = Good (Performance) Marketing.”

Companies engage in branding and brand marketing because they expect it to have an impact on market success, i.e. revenue. It is generally accepted that it lowers costs of customer acquisition and increases retention rate in the long run. Nevertheless, the challenge that many Brand Managers faced was this:

How can you justify your salary & budget when every increase of the KPI that your activities support are attributed to a new break-through in performance marketing?

Turning marketing spend on/off — The different effects of Brand & Performance marketing

They struggle with defining branding-specific KPIs that they proclaim ownership over. These KPIs must guide actions of branding activities by reflecting success or failure. Most importantly: they have to be accessible by short-term measurement.

“What is not measured, is not done,” is a common saying in highly controlling organizations. Adapted to our context, it would be, “What cannot be measured, won’t be done.”

(Further reading: dive into the concept of lead & lag variables.)

Tracking campaign performance via different channels

Remember the first time you played Jenga®? Every level consists of 3 blocks which seem to provide the structure with stability and strength. It was surprisingly easy to remove 1 or even 2 blocks per level, without risking the tower to crash. Removing these “sleeping” blocks then enables you to build the tower to unexpected heights.

Same applies to branding activities. Many companies run campaigns on several channels at once — and are happy to see the KPI’s increase steadily.

“I know that half of my marketing budget is wasted.
Problem is, I do not know which half.”
– Yes, this quote is more than 100 years old.

How high could you boost these KPI’s when spending the money only where it’s actually delivering an impact? Track the success of your campaign channels, identify the “sleepers” and move ahead.

Track the success of your campaigns — over various channels (example)

Tracking the success of single campaigns is the most common thing for performance & online marketing activities. Transferring this to a world of discontinuous customer journeys is yet challenging.

Tracking Brand Lift: towards a new approach of Brand.Measure.Learn.

In our conversations, we identified three entwined challenges that companies face when starting to engage in branding activities:

  • Explaining the contribution to the company’s bottom line (in the long run)
  • Understanding in the short term whether progress is being made
  • Driving success efficiently by running only those campaigns that have an impact

The concept of brand lift tackles all of these: do you achieve a positive shift in customer awareness and perception? This can and should be measured short-term.

Branding activities should not be a leap of faith and just hoping everything will be fine in the long run. It won’t. It is a delicate activity that requires active steering.

Active steering requires precise measurement. Otherwise, how can you assess whether you are actually making progress — and not wasting money or effort on the sleeping campaign bricks in your marketing strategy?

Keeping track of your record does not only help your company to move to even greater heights, but also closes your personal learning loop.

Go ahead with ambitious campaigns — aim for growth & make a difference.


About:

My name is Christoph and I work as Insights Innovation Lead at Dalia Research. I create market research products that help startups, small & medium-sized companies to leverage the wisdom & opinions of the crowd to drive their business to success. My most recent project is our BrandTracker that enables consumer-facing brands all over the world to track their brand performance over time — at a price that is affordable for everyone.

Header image by rawpixel, from Unsplash