Brand Building or Performance Marketing? Why Multi-Location Brands Must Invest in Both
Brands have long grappled with the decision of how to allocate marketing dollars across brand building and performance marketing. Building sustainable brand awareness and a strong reputation requires a long-term investment with tough-to-measure results. Performance marketing delivers more immediate local leads and sales. It’s easy to see why many brands overinvest in performance marketing at the expense of brand building. It’s hard to argue with prioritizing tactics that are easily linked to revenue and ROI.
But an overreliance on performance marketing leads to diminishing returns. Interbrand’s Best Global Brands 2024 report found that a lack of focus in long-term brand strategy led to $200 billion in lost revenue. That could be why the percentage of marketers who planned to increase their investment in brand marketing grew in 2024, while the percentage who planned to increase investment in performance marketing declined.
The New Reality
Brand building has never been optional, but in a digital-first world where consumers are overwhelmed by choice, it’s evolved to become a critical and powerful driver of performance marketing. Consumer trust in advertising and digital marketing has continued to decline, with many people skeptical to buy from or engage with unheard-of brands that pop up in their social feeds.
Additionally, consumers have a wealth of information and peer insights at their fingertips across channels like TikTok, Reddit, Facebook groups, Google Reviews and Yelp. Claims made in advertising can easily be researched and quickly debunked. If marketers aren’t paying attention and helping shape the story being told across these channels, someone else will–and it could be your unhappiest customer. People are sharing their experiences with brands more freely and widely than ever before.
For example, consumer feedback on Chipotle’s portion sizes recently went viral, with customers “review bombing” the restaurant’s app and recording themselves walking out when given what they perceived as small portion sizes. While Chipotle ultimately set the record straight that they had not changed their portion sizes and reinforced portion sizes in employee training, they lost control of the narrative while it went viral on social media. Consumers doubting the value they would receive at Chipotle likely would have thought twice had they encountered an ad shortly after.
Brand awareness and perception is also critical for search engine marketing. Details revealed during Google’s antitrust trial showed that Google weights user engagement and clicks as ranking signals, creating a feedback loop that favors well-known, trusted brands. As a result, brand building directly impacts click-through rates.
In this new landscape, brand building is a performance multiplier. When consumers trust your brand, click-through rates improve, conversion costs decrease, and customer lifetime value increases.
Uniting Brand and Performance
For multi-location businesses, deep customer listening is a powerful, cost effective way to gain insights that power both brand and performance marketing. There are three ways customer listening can help brand building and performance marketing work together:
- Protect your brand from risk: Customer listening can detect issues and signal potential crises before they escalate online, helping maintain brand integrity while protecting performance marketing investments.
- Improve the customer experience: Customer feedback analysis can ensure brand values and promises align with the customer expectations set by performance marketing and reveal experience gaps at the local level before they impact the brand.
- Make better business decisions: AI tools can analyze customer feedback at scale to identify patterns and trends, brand threats and opportunities. These insights can inform the entire marketing strategy, up and down the funnel.
Putting It Into Action
A large MULO automotive services brand recently discovered the costly impact of a disconnect between brand and performance marketing. Its performance marketing metrics looked great—strong search rankings, optimized listings, effective paid campaigns. Yet business was declining and the marketing team didn’t know why.
Through AI-powered listening and analysis of customer feedback, they discovered that new changes to their employee commission structure had created aggressive upselling practices in local stores that were damaging their brand perception. This operational change had fundamentally altered how customers perceived the brand—from a trustworthy, budget-friendly option to a high-pressure sales environment. Performance marketing was efficiently driving customers to locations only to have them disappointed by an experience that didn’t match the brand promise. This insight was missed by traditional performance metrics. No further optimization of keywords or refined ad targeting could overcome this shift in brand perception.
The solution wasn’t to choose between brand building or performance marketing, but to realign both around the customer experience. This meant adjusting operational policies to match brand values, updating performance marketing messages to set correct expectations and using the customer feedback to inform both brand and performance strategies.
The Future Is Brand Performance
This new reality requires a fundamental shift in how marketers think about the marketing funnel. The future of marketing for multi-location businesses isn’t about top-of-funnel brand building vs. bottom-of-funnel local performance marketing. It’s about finding innovative ways to make them work together to drive business growth.
The brands that win won’t be those with the biggest marketing budgets, but those that best bridge the gap between brand building and performance marketing. They’ll take in customer feedback and act on it quickly to ensure every performance marketing tactic strengthens their brand, and every brand initiative drives measurable results. In a complex digital marketing landscape, that’s not just smart strategy. It’s survival.
