If I spend X on brand marketing, I will create Y lift in awareness, which will drive Z revenue for the business. Now what!?
- Every poor soul ever tasked to evaluate the prospective performance of an upcoming branding initiative.

Intro

Brand spend can be placed for two business-mechanical reasons.

  1. To drive increased consumption from an existing audience (by changing perceptions or gaining an increased top-of-mind or unaided awareness)
  2. To drive consumption outside the existing audience by gaining awareness with new buyers.

For BOTH of these buying types, two huge hypotheses underpin the idea that brand spend is a financially sound thing to do for the business.

  1. Spending on media will create a change in awareness in the audience. (pick the relevant awareness metric, be it new audience awareness, unaided awareness in the existing audience, or top-of-mind-ness, or some level of perceptual change)
  2. Increased awareness has a performance impact on the revenues of the business.

Unless both are true to a degree, the whole thing falls apart.

If we activate without brand recall going up, or without any perceptual changes, we can’t expect to create an outcome.

If we successfully drive a measurable change in recall, it’s still unclear what the performance impact is on the business.

So how can we figure out what effects to expect from end-to-end in a brand marketing situation?

Component pieces to drive financial impact most effectively from brand spend

Let’s break it down to the constituent pieces that can drive effects in each hypothesis. Lists are super non-exhaustive, drop a comment if I missed something.

Budget – If I spend X

  • Media choices
  • Targeting
  • Creative & Communication
  • Direct response “discounting” of brand spend.

The multipliers that effect the value of any spend placed.

Awareness – I will create Y lift in Awareness

  • Measurement / awareness types
  • Perception – key to driving action

The expected type of lift that can be generated.

Financials – which will drive Z revenue for the business

  • Effect on Channels
  • Effect on new/returning customer balance and reacquisition costs

The expected utility of the placed spend and generated awareness evaluated across acquisition channels.

Each of these pieces can be evaluated in multiple ways, and things like “acquisition channels” can look vastly different across different businesses. Additionally, the expected lift and utility of placed spend, as well as the opportunties for media and creative are also different across different businesses.

So the challenge is coming up with plausible upper and lower bounds, more than a precise formula. A realistic range.

Budget

The multipliers that effect the value of any spend placed.

Media choices

  • Power – The effect & inherent message in the ad placements you pick (display network ads vs times square)
  • Price – Applied negotiation towards media / approach to buying “spare” inventory / Connections leveraged to get discounted rates / Buying outside season etc. Anything that can get more reach for less money.
  • Presence – the ability of the media to deliver a feeling of “it’s everywhere”.

Targeting

  • How effectively the media is able to deliver reach and frequency inside sometimes very specific target audience.
  • Own choices about whether to target new or existing customers.

Creative & Communication

  • The HUGEST wildcard affecting the value of spend placed. Is the ad great?
  • WoM bonus – if the ad is shareable enough.
  • Memorability – if the ad sticks clearly for a long time.
  • Clarity – if the message is understandable.
  • Identity – if the link is made to the correct brand.

Direct response “discounting” of brand spend.

  • Any immediate sales activity from spend that is meant to drive long term brand awareness and a new baseline for business can be considered a discount.
  • If it’s possible to run ads at breakeven, it’s free branding.
  • If it’s possible to scale an influencer program at breakeven, it’s free branding.
  • If an outdoor campaign produces a 15% sales spike during its runtime, take the profits and apply as a discount to the media costs when doing your cost per awareness calculation.

Awareness

The expected type of lift that can be generated.

Measurement / awareness types

  • Depending on the business goal, there are several potential awareness outcomes that could be desired.
  • Aided awareness lift is ideal (or at least enough) if the brand should win a higher percentage of side-by-side comparisons (i.e. google shopping auctions or in-store purchases placed next to competition)
  • Unaided awareness OR top of mind awareness is required if the ambition is to have users start their buying journey by going directly to the brand (e.g. choosing the Apple store instead of the electronics retailer, or typing in a product name, brand name, or brand domain in the browser, instead of a category search).
  • Having clarity about the primer or trigger is also key. Think about what level of specificity in a category customers actually operate at
    • “What’s the first brand you think of in electronics?”
    • “What’s the first brand you think of in consumer electronics?”
    • “What’s the first brand you think of in computers?”
    • “What’s the first brand you think of in high end computers?”
    • “What’s the first brand you think of in premium laptops?”

The awareness type, and what category awareness is supposed to exist within, are important factors for choosing what to measure, and therefore what impact spend could be expected to have – as well as being key considerations for what outcomes to expect on sales volumes.

Perception – key to driving action

  • It’s almost impossible to be known without being known for something. When buying awareness, perception comes as part of the package – so what perception change is driven by the campaign? Quality? Good price? Convenience? A general warm-and-fuzzy feeling?
  • The clearer the perception goals are outlined, the less is left to random chance about what customers end up feeling about the brand.

Financials

The expected utility of the placed spend and generated awareness evaluated across acquisition channels.

Effect on Channels

  • What channels are expected to see a sales lift in the long term from the brand lift?
  • Hugely dependent on what awareness metric is primarily impacted.
  • For e-com: large impact on brand search and direct traffic if unaided awareness or top of mind increases, large impact on scalability of search and social is aided awareness increases. Both contingent on good, relevant perception changes.
  • For B2B sales teams: large impact on SQLs walking in the door on their own if unaided awareness or top of mind increases, large impact on conversion from MQL to SQL or prospecting conversion rate if aided awareness increases.
  • For FMCG: unaided boosts far more valuable if product isn’t in main aisles – if in main aisles and presented near competition, aided boost is powerful.
  • In short: If physical availability is high, mental availability can get away with being somewhat less impressive. For low physical availability (i.e. product hidden in store, or product only available online) higher mental availability may be required to drive result.
  • Channel impact will vary depending on depth of awareness and perception.
  • These considerations are key when modelling somewhat realistic ROI calculations.
    • Is it realistic to 10X sales from “brand searches” for an e-com that only 2X’s unaided awareness?
    • Is it realistic to expect a doubled search-ad CTR from a doubled unaided awareness? (probably depends a lot on bidding type)
      • If CTR can be doubled, what does that mean for total scalability? (probably depends a lot on competitiveness of industry)

Effect on new/returning customer balance and reacquisition costs

  • Awareness can drive frequency in target group (goal may be to secure share of wallet in category)
  • Awareness can drive first time purchases in target group (goal may be to expand “top of funnel”)
  • In either case, the calculus changes if there are spillover effects between groups, or if other business metrics change as a result of the brand campaign. If a campaign is designed to drive top-of-funnel awareness in new customer groups, but has spillover reach in existing customer group, and reacquisition costs drop on other channels – make sure to attribute correctly.

Conclusion

There’s a sliding scale here.

Trying to do deep math on all this is a recipe for paralysis by analysis, because ALL of these things are a rabbit hole on their own, and rest on loads of assumptions.

Try to wing it without even thinking about potential impact calculation, and you might end up running at an elevated spend level that turns out later to have been completely impossible to recoup even with generous estimates across the board.

So there’s a balance to find. Setting rough upper and lower bounds on the key elements is helpful. Relating to current market share is helpful. Benchmarking against competition is also helpful.

But in the end, this type of spend is definitely an art, and even with budgets set it’s about connecting to another human being and trying to create lasting impact that’s supposed to then translate into business value over the coming 2-5-10-30 years. It’s not gonna fit into a formula that can tell the truth.