In a lot of conversations we have, and especially with the recent IDFA changes (read about that here) we highlight a difference between brand advertising and performance advertising. It’s not a distinction we see mentioned a lot but it is absolutely night and day between them.
In many ways though, it’s a story of old vs new. Short term vs long term. And how change isn’t always a good thing.
More importantly, it’s a story of a future that could really benefit the gaming space.
Good old brand advertising.
When most people think of advertising, this is what they’re imagining. The big ideas, the motivational video campaigns, the funny out of home posters, the entire world of Mad Men and the work those fictional characters made.
It makes sense that that’s what people think of, because that’s exactly what traditional advertising is built to do: be memorable. Change opinions. Get inside your head and stay there.
People love these ads and they talk about them all the time. Nike and Apple are masters of this kind of emotional appeal advertising, but it has a huge presence in the gaming industry too. Just look at the hype-inducing over-the-top-ness of this PS4 ad:
We don’t need to tell you that these ads are still going strong today, but the internet introduced a major competitor to them that changed the game entirely…
Performance advertising
This is a type of advertising designed to aggressively gather short term results in a quick way, like higher sales, video views, or game downloads. The major difference between this and brand advertising is the measurability of all results and the push to measure the effectiveness of every dollar spent.
Actual spend from brands tends to lean towards brand marketing, but the sheer volume of performance ads vs brand ads that a person sees per day is the kicker.
The reasons for that sudden increase in performance advertising are many fold. Firstly, the internet simply holds an immense amount of content with advertising attached. Youtube, Blogs, Twitch – not only do all of these channels have targeted advertising, but many of them generate it too; everyone is a content creator so everyone can be an advertiser, rather than just big brands. Platforms like Facebook have made creating and tracking those ads easy too, so in an immediate feedback culture they are really appealing to creatives.
Really though, performance advertising culture just seemed like a renaissance for a lot of advertisers. Department store model John Wanamaker once said “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Performance advertising, on the other hand, lets you measure everything. No more fear of the unknown, now it’s fear of the slightly-out-of-reach KPI.
But advertisers started neglecting brand advertising in favour of this data-rich approach which just led to a race to the highest spender coming out on top. After all, as soon as you stop spending money on performance ads, then your results stop too.
Back in the 1970s, it was reported that people would see as low as 500 ads per day. Now, with the internet commoditising every spare pixel, the average person is predicted to see around 8000 ads per day.
Or, to put it in financial terms, have a look at the below image. While a portion of this revenue will be from brand ads too, a good majority of it – and a majority of total ads seen per day in general – will be from performance focused ads.
With direct response advertising like this, brands aren’t actually building equity. They’re seeking short term solutions to marketing KPIs that won’t necessarily create long term customers. Long term customers will always have a higher lifetime value than performance targeted ones, so it’s not surprising that the biggest brands in the world have an immense amount of emotional equity in their consumers.
People think of John Lewis and think touching family ads at Christmas. They think of Coke and think of happy times with friends. They think Blizzard and think of epic worlds and high action thanks to cinematic trailers.
A push for clicks doesn’t reach the heart of a customer, but it might reach their wallet. What’s more important to your brand?
An overview
To summarise, the core KPI for performance ads are things like clicks, downloads, or other immediate actions. They’re incredibly effective, cheap, AND still offer room for creativity.
The main KPIs of brand ads are viewability to the right audience, which presents the problem of finding where that audience even is. These ads help make a brand top of mind in their category, but they’re inherently harder to measure and track.
At the end of the day, a balance is always going to be ideal, but we might be entering a bright future for brand ads in particular…
The future of the brand vs performance advertising struggle
The reality is that performance marketing is a dominant strategy for a lot of smaller companies who don’t feel that they can compete on the global stage with bigger brands. Performance ads can be cheap and short term revenue is appealing when you have bills to pay.
We believe that smaller companies have to take a different approach to brand advertising, but through innovation they absolutely should be trying it. Innocent drinks have reached immense brand equity levels thanks to their social channels alone, as just one example.
In order to stand out in such a busy world, you need to be top of mind in a specific category and brand marketing is how to do that.
Don’t get us wrong, it’s always going to be a balance between the two in the modern climate. As you can see below, very few brands lean fully into performance ads or fully into brand ads, and that’s crucial. We believe that brand ads deserve more of a skew, but even titans like Coke roll out regular performance ads on top of their memorable brand pieces – find the balance and channels that are right for you.
Gaming is a new channel that really enables ‘big idea’ brand marketing today, something that the internet has lost due to the adpocalypse we’ve seen in recent years. Monetisation in the mobile space is still seeing innovation, unlike web browsers, meaning there’s a chance for meaningful and uncluttered brand advertising for companies of all sizes.
In-play advertising is one of those innovations, and is an excellent opportunity for brands to become top of mind with some of the 1.5 billion daily players out there. Partly through advertising in a space that isn’t annoying to users, and partly thanks to the positive brand uplift through association with fun gameplay.
Brand advertising is coming back, and the gaming space especially is going to face a whole new dawn for the advertising world. It’s exciting stuff, and with recent changes to IDFA gaming is going to face more and more attention from big brands as a viable new ad space.
Check back on the blog in a couple of weeks and we’ll run through a quick guide to creating a brand as an indie dev, and why it’s more important than you still might think.
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