Pros and Cons of Building a Digital Marketing Strategy for Brand Awareness

With CPCs rising on Google Ads for search advertising and on Meta for social media advertising, some companies are shifting their marketing strategy to focus on brand awareness.

Search Engine Land recently covered Airbnb’s shift from PPC to brand marketing. Other brands, including some of Perfect Search’s clients, are also moving more advertising money to high-funnel targeting where a smaller budget can reach a larger audience.

What are the pros and cons of this strategy and how can you best evaluate if it will work for your goals?

Search & Social Advertising’s Rising Costs and Economic Downturn

A recent study by WordStream shows the average cost per lead from search campaigns has increased 19% year over year. Click-through rates on ads have not changed. But cost per click has increased and conversion rates have decreased—leading to this rise in cost per lead. Businesses that rely heavily on Google Search as their main source of leads must invest more budget to get the same results they have seen in the past. Some industries have increased more than others as competition for digital space on Google heats up. 

In addition to rising costs, both businesses and ad platforms are struggling to track user behavior on their website the same way that they used to in the past. New privacy laws, the rise of ad and tracking blockers, and browser/app updates have made it so that users can easily block tracking online. While this is a win for user privacy, it makes it more difficult, or even impossible in some cases, to target online customers with the most intent.

In the past, ad platforms could target users based on specific behavior on a website, their entire search history, their app behavior history, and general online behavior—and their bidding algorithms were set up to learn from the information collected and bid on users that were close to converting.

Now, many users are blocked from this type of targeting and the bidding algorithms may not even be able to see if they convert after clicking on an ad. Meta (parent company of Facebook and Instagram) is especially having tracking issues after the Apple iOS 14.5 update in 2021 and advertisers are finding that their reported platform conversions are overcounting compared to CMS and Google Analytics data.

With the economic downturn in 2022 expected to stretch into 2023, many businesses are reviewing their investments in marketing. They want to get the best return for their budget. Rising costs per lead on Search and social campaigns are causing some brands to test and evaluate other types of advertising to see if they can get the same results with lower spend.

Benefits of Brand Awareness Marketing

By targeting users in the top of the funnel, companies can influence their decisions later on in the customer journey. High-funnel advertising channels, like television, radio, programmatic display, CCTV/OTT, streaming video, streaming audio/podcasts, and social media, often cost much less on a CPM (cost per thousand views/impressions) basis.

CPM advertising is not trying to drive traffic to the website—it’s more important to engage the audience, build trust, and make the brand memorable. It’s priced based on the number of views on the ad (instead of cost per click) and is usually much cheaper than low-funnel ads.

There is less cutthroat competition over bidding on high-funnel ads so they don’t experience the same rise in price when a new competitor enters the market. High-funnel ads are also less frequently targeted by normal browsing behavior, so tracking does not impact performance as much as low-funnel ads.

With the same budget, a business can reach many thousands more potential customers in a much more engaging way than they would otherwise would through Search and Shopping campaigns.

Balancing the Cost of Engaging Creative Campaigns

High-funnel channels rely on engagement to drive change and action. These types of ads must be creative to grab the attention of viewers or listeners. Companies need to have plenty of additional resources to invest enough in high-quality upper-funnel creative and video advertising. They need to crank out engaging videos and content frequently enough so their audience doesn’t get tired of seeing the same thing over and over.

This investment in content can equal the savings the company sees in switching to CPM advertising from low-funnel CPC advertising. However, that same content has a variety of uses and continues to live and rank on the company’s website, so it doesn’t only have a short-term impact.

When a brand effectively engages a meaningful portion of its potential customers, those people will remember them when it comes time to purchase. They will be a part of the consideration group when they are researching options. This can be an effective strategy in a field without lots of similar businesses (competition) or where a brand is a well-established leader in their niche already.

Leveraging Brand Awareness to Change Customer Behavior

Another reason to focus on brand awareness is for businesses that have to change customer behavior or educate their customers about their products. Some SaaS companies have to educate their audience on the need for their product. This type of advertising is helpful for brand awareness.

For instance, Airbnb shifted their advertising strategy during COVID in 2020 and 2021, when the search volume for their services decreased, they wanted to influence behavior to consider travel. They wanted to broadcast the message that their listings were safe and encouraged local travel because consumer behavior changed.

Brand awareness advertising can also support advertising at the middle and bottom of the funnel. If consumers are already engaging with your brand with video and content, they will be more likely to recognize and trust your brand in the search results as they research options before they purchase.

Businesses that spend on brand awareness advertising often see click-through rates and conversion rates increase on their search ads and organic search listings. They also see an increase in direct visits to their website that eventually convert.

Drawbacks of Brand Awareness Marketing

Brand awareness is meant to work together with the bottom of the funnel, performance marketing. Brand awareness can control the volume at the top of the funnel but it is still important to have a strong presence in the middle and bottom of the decision funnel. Even with Airbnb’s shift to brand awareness, about 50% of the marketing budget still goes to bottom-funnel search and social advertising. The ideal marketing mix of channels and ad types targeting different parts of the funnel will be unique to each brand.

If a company only spends on ads at the top of the funnel, it can generate engagement and interest with a large audience. This may work well for easy, cheap, impulse purchases. But for more expensive, important choices, most consumers will still take time to do research when it comes time to purchase. They will read reviews and look at prices and options from a few different brands before making that final decision. If a brand ignores the bottom of the funnel, it opens up an opportunity for a competitor to step in at the consideration and decision-making stages and sway the consumer in a different direction. 

Performance Marketing Typically Takes Priority

Businesses with a limited marketing budget may not have the resources to allocate to developing engaging content, distributing it across brand awareness channels, and also showing it in paid and organic search listings when customers are searching for their products. These companies may have to make a choice whether to focus on brand awareness or performance marketing and most choose performance marketing to drive action immediately. 

Budget can also limit brands that have a wide audience who can use their product. It can take millions of dollars to make an impression on a large group of people nationwide or internationally. Brand awareness campaigns work best if ads are shown to your potential customers on multiple channels repeatedly to make an impression.

If you have a wide, national, or international audience that you are trying to influence, it takes a large budget to create an effective brand awareness campaign. Here, limiting targeting to people already searching for your product to focus the budget for the best results may be the best practice. In general, it is mostly large brands that can create effective brand awareness campaigns with wide audiences—the brands that purchase TV ad spots, radio, video, social media, and programmatic display campaigns on a large scale.

For brands that have a limited geographic reach or have a very specific audience that they are trying to reach, like some B2B brands, it may take a smaller budget to have a large presence in front of their audience. They need to be smart about the types of platforms that have the right targeting available for their audience. B2B brands often use LinkedIn ads, organic LinkedIn posts, email marketing, and programmatic display platforms with B2B targeting to grow brand awareness with company leaders who can purchase their product because those channels have the ability to target by company industry and job titles. 

Tracking Awareness isn’t a Perfect Science

Tracking the effectiveness of brand awareness advertising can be incredibly challenging. This type of advertising attempts to engage the user to get them to remember the brand later when they look to purchase the product. However, the user often does not even click through to the website from these ads, making it difficult to track their behavior after they see an ad or remarket to people who were engaged.

It is also hard to measure how much the brand awareness ads impacted the final purchase when there are later steps that are easier to measure, like a click on a Search ad right before purchase. Advertisers usually measure “brand lift” when starting a brand awareness campaign. This measures an overall lift in purchases over a specific period of time after the campaign starts with no other changes in their bottom-of-funnel advertising.

However, this is complicated by the fact that awareness advertising can influence decisions months after they see the ad and there may not be an impact for a while since the audience is not actively searching for your product.

Brand Awareness is a Critical Part of Marketing Strategy

All brands should do some brand awareness advertising to grow their presence with their potential customers and in their niche. This can include a wide variety of channels like social media ads, social media organic posts, streaming video ads, organic streaming video, streaming audio/radio/podcasts, webinars, research/guides, newsletters, organic content, email marketing, search engine optimization, reputation management, television ads, radio ads, print media, OOH ads, CCTV/OTT ads, programmatic display, native content, and more.

The more channels that a business uses to reach its target audience, the greater the impact. The goal should be to get engagement with the content (video views, content read, comments) instead of leads or purchases. It’s likely there will be very little bottom-of-funnel response from these types of ads.

However, the amount of brand awareness vs. performance marketing investment will be determined by the goals, market position, and audience makeup of each company. Marketing strategists can help a business test and determine what the mix should be with their audience, budget, and goals. Performance marketing can still drive important action at the middle and bottom of the funnel, even with the increase in costs and tracking issues. We must consider engagement metrics and overall brand lift, rather than strict cost-per-lead metrics, when looking at the effectiveness of brand awareness advertising.

Final Thoughts

Due to the relatively cheap cost of digital ads and the high conversion rates of performance marketing targeting and strategy, many brands have relied too much on only targeting the bottom of the funnel online. They continued to cut “wasted” spend that did not lead to immediate results. This caused many upper funnel and brand awareness campaigns to get decreased funding or be cut from their strategy altogether.

Now we are seeing a swing in the other direction. Brands are recognizing that strong competition is driving up costs at the bottom of the funnel while awareness of them as a brand is not as strong as when they were doing wider advertising, leading to lower click-through rates on search ads and organic search listings, and fewer direct visitors to their sites. They are testing and adopting a more full-funnel advertising approach and using a substantial part of their marketing budget to grow their presence in their industry and fill the top of the funnel.

Not sure how to develop a customized marketing strategy for your business? Contact Perfect Search for a free audit!