Performance marketing without its critical anchor?

– Professor S Ramesh Kumar & Madhurjya Banerjee
IIM Bangalore & Senior Global Marketing Director (Unilever)

Focusing solely on performance marketing risks neglecting crucial brand building, a vital component for long-term success. While digital marketing offers new avenues, foundational principles like segmentation and authentic offerings remain paramount. Brands must adapt to evolving consumer decision-making, leveraging online reviews and user-generated content to build trust and credibility.

“It is better to have a permanent income than to be fascinating”- Oscar Wilde

Picking up a cue from the quote of Oscar Wilde, getting fascinated by performance marketing at the cost of brand building is an issue arising out of focus on just short-term results. This is because both performance marketing and brand building are the two sides of a useful coin that marketers can use.

The approach

There are many perspectives with which the trending dilemma can be viewed. This article looks at it with through the lens of behavioural dimensions associated with brands. The intent of the article is to reflect on the following aspects;

Triggers that initiate brand building and the need to adapt the brand to the changing environment that appears to adopt performance marketing at the cost of brand building. According to eMarketer and TransUnion’s study, “The True Cost of Trust in Marketing Management” more than half of marketers opined that their level of confidence in measurement has not improved year on year raising an additional concern in the measurement of ROI related metrics.

How could performance marketing be used depending on the objectives of a brand given the behavioural anchors required for sustaining branding in the long term. The idea of this article is to provide a few thoughts on the theme, rather than to suggest an exhaustive list of factors on psychological aspects.

The classism of basics

A 2025 publication of American Marketing Association names segmentation of markets as one of the top 25 trends. The basics of creation of a brand (as differentiated from a commodity), nurturing and sustaining
a brand has not changed with the emergence of digital marketing. In the recent past, Nike learnt the power
of basics after the brand lost ground due to its over reliance on digital marketing used to sell directly to
consumers, fuelled by the short- term impact of COVID-19 related shopper behaviour change. This led to
the disintermediation of retailers, lack of discrimination between loyal consumers and price sensitive
online consumers and the let up on new product offerings.

In contrast, Cadbury’s AI based personalization of ads at the retailer level after the pandemic is a part of
the overall brand building that had happened over the years. Biotique’s AI and augmented reality -based
personalization is backed by authentic offerings that combine contemporary science with ancient science
with offerings conveying value across different offerings in a highly competitive higher priced segments.
The celebrity association with the brand and digital initiatives of the brand were preceded by rigorous
brand building efforts. The change of brand imagery associated with Bata with its string of celebrity
associations and digital initiatives in the recent years is backed up by several premium offerings as a shift
towards premiumization. The concepts of holistic marketing that includes internal focus within the
organization to become customer centric is only becoming more relevant in the digital era as reflected by
the afore discussed examples.

The behavioural lens-the complexity of choice and trending consumer decision making

Several websites, apps and online initiatives are undertaken by brands. How can these be enhanced by
consumer decision making? Two basic factors need to be taken into consideration. One is the choice of
brands in a highly competitive context, that is available to the consumer and the other is the radical
manner in which consumer decision making, new product discovery and shopper journey have changed in
the digital era.

If for instance, one wants to buy a product in amazon, the consumer can quickly focus on popular brands
with high ratings and get the consideration set from which the final brand is selected. Borrowing a leaf
from the recommendation algorithm of Amazon which recommends products that may interest the
consumer based on the past purchase history, can reviews on a brand’s own site or app be made more
customer friendly? Can the website of a brand of shampoo for instance categorise the reviews based on
hair types or other related characteristics that are appropriate?

Similarly for a durable like washing machine can reviews be categorised based on the usage patterns
related to frequency of usage, usage load or other appropriate considerations? Every brand claims a
unique selling proposition and online reviews need to be used to provide authenticity and credibility to the
claims of the brand. The context of competition is changing so fast that word of mouth or user generated
content and influencer marketing are already entrenched into the beaten track of marketing warfare.

Evolving consumer decision making -few perspectives

The conventional decision -making stages may have to be modified to accommodate the pace ushered in
by online channels. Lifestyles have changed, consumers are dependent on online information and
information flow is getting dynamic flooding the psyche of the consumer.

Consumers experience two kinds of learning namely incidental learning and active learning . Incidental
learning is passive learning like watching TV ads without an active information search. In the digital era ,
incidental learning has undergone a radical shift. Over time due to browsing the net or because of
participation in social media channels (mobile sets have carried these practices to almost a compulsive
level), consumers learn about categories and brands.

Active social media community groups have merged for different types of consumer interests. Word of
mouth from these groups also influence various decisions. A classic example is the cell phone purchase
decision where reviews on online forums now have become one of the most trusted information source,
for decision making. Unlike the conventional consumer decision making, the stages are cut short because
of the changes in the manner in which information input has changed. Even in active learning during
which the consumer may have a goal to buy the offering, the decision may be faster as consumers use the
information gathered from various sources.

Today some of them even let their AI agent on their phone synthesize the sources and give a final
recommendation. With reviews and comments from fellow consumers or friends taking the centre stage,
rational product or brand centric information is more likely to appeal to consumers in several categories
despite the emotional cues from the brand.

Segmentation and long-term brand building provide the basic building block for a brand’s life cycle.
Performance marketing will perform only if it is anchored on brand building.

This is not to argue emotions/signalling value of brands are not a part of the decision-making; it only
means that features and benefits of a brand (iPhone for instance) is likely to become that All views
expressed are personal much more important than ever before.

Source: Economic Times