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Branding vs Performance-Based Advertising

Opposing Business Models?

Written by A. L. M. Botelho

Paper category

Master Thesis


Business Administration>Marketing & Sales




Master Thesis: Branding and performance-based advertising: Introduction In the past few years, we have witnessed changes in the paradigm of advertising. In a sense, the digital world has begun to surpass traditional media, eclipsing it, and allowing it to be used in Web 3.0 , The relationship between consumers and the company is closer. atmosphere. The continued growth of the smartphone market in terms of users, capital, and features has made mobile platforms a privileged means of reaching consumers. However, this paradigm change does not only express itself through higher communication proximity. As Moreno et al. said, every element of the marketing mix is ​​affected. In reality, consumers are becoming more and more powerful, and the rise of social networks has further magnified this. (2015, p. 245), “Social media has changed the landscape of communication and empowered the public to publish, share, and republish information easily and quickly (Guth and Marsh, 2001; Kent, 2008; Porter, Sweetser) And Chung, 2009; Segev, Villar, and Fiske, 2012; Smith, 2011). They are the backbone of this new relationship and economic reality. Brands are influenced and affected online through symbiotic relationships with consumers. Pervasive feelings and The suppression of physical and temporal distances promotes the viral characteristics that social networks are designed to provide. As the aforementioned author adds, “This forces organizations to establish and cooperate with active consumers as well as blogs, community managers, and other gatekeepers on social networks. Maintain a positive relationship.” Any corporate behavior or communication may be criticized or praised by consumers. This reality is usually managed in an organic scope—not paid—; nevertheless, the Internet is indeed driven by It is composed of many other companies, fan pages and users’ friends. This means that users will be affected by immeasurable daily news, which is why the messages that the company hopes to transmit on social networks may be ignored. It is precisely because of the large amount of online Activities, advertising becomes indispensable. Only through the promotion of content, the company can ensure that its information can be delivered to all users belonging to its target audience. Because of this proximity between the company and consumers, brand promotion activities can flourish, On the basis of two-way communication, direct contact and continuous interaction are allowed. However, other advertising campaigns are equally prosperous: advertising campaigns that focus on business goals. In other words, the focus of the campaign is not to develop the relationship between consumers and the company, but rather User conversion—encourage users to perform actions required by the company, usually sales. 2.2. Brand and performance: Opposing business models? Within the scope of marketing mix/operational marketing, digital advertising has seen itself as an indispensable element of any contemporary company. Investment in buzz marketing, viral marketing, or organic influence has become insufficient. As the fourth most influential digital marketing activity in 2016, mobile marketing is the engine of business economic progress in the 4.0 era. Outlook. The importance of this fact is magnified by the development of markets in Latin America, Africa, and Asia, where mobile penetration rates are increasing exponentially. According to data collected by We Are Social, in January 2017, the total number of mobile users reached 4.92 billion, corresponding to a penetration rate of 66%. These numbers become even more important when considering their impact on the rest of the platforms: Currently, mobile phones account for 50% of network traffic, so marketers are an opportunity not to be missed. In addition, these figures also make people realize the importance of mobile operators in the scope of mobile commerce. Direct billing by operators (an online payment method that allows purchases through mobile devices) has broadened the price and distribution variables of digital commerce. The vision of credit. The rapid growth of the department and the network itself has brought about the development of a variety of marketing tools and opportunities, as consumers' needs and demands have changed, and they have become more familiar with technology in the democratic process of information inclusion. Generally opposed to brand promotion (as some digital marketing professionals believe: "There seems to be a consensus that there are usually two types or types of online activities", performance-based advertising relies on cost per acquisition ( CPA) as its main indicator and provide the company with a significantly reduced level of risk. To illustrate this concept, take sales promotion and traditional advertising as examples. Suppose a company initiates a campaign aimed at increasing sales. Despite the large number of items sold, when a company turns to traditional advertising, it will spend its entire established budget and may not generate any sales. Conversely, when it takes a promotional campaign—for example, customers must receive coupons—the campaign will only incur costs after the sale is complete. It is within this scope and logical structure that the CPA method appears in advertising-customers only need to pay agents for the number of products they are trying to sell to end consumers, that is, pay for tangible results. If there is no favorable result for the customer, there is no need to pay any fees. Read Less