The Brand Builder's Playbook // Brand vs Performance Marketing: Why the Long Game Wins // With Andrea Brimmer (Ally)

0:01If you don't see those things and feel the soul of the brand, no marketing that I do is going to matter. Welcome to the Brand Builders Playbook, the show for modern marketers who are done with guesswork and ready to implement what actually works. Well, hello, everyone. Welcome to Episode 5 of the Brand Builders Playbook. This is Jim Stengel. I'm Ryan Barker. I'm Lindsay Waking. Well, listen, we're about halfway through the series. We're having a lot of fun with it, and we hope you are too. And we had a great episode last week, and this week is going to be getting into the numbers, which we love.

0:38And we're going to talk about this hotly debated topic, which never seems to go away. And that is the tension between brand and performance marketing. You know, last summer, I host a big CMO thing in Cannes at the Cannes Lions Festival, 60 CMOs. We always ask them to vote on the top issue they're wrestling with. Three years in a row, it's been this one. So anyway, we hope to get some insight today. We have a great guest coming on, but I think it's a really, really hot area. And I hope people will have useful things to put in their playbook regarding this topic after we're done today. But before we get into that, you know what we do before every episode, we all talk about a playbook that each one of us are admiring, you know, that's kind of relevant to the topic of the week.

1:17And I usually go last as today, I'm going to go first because I love the example I have. And it's a brand I had on my other podcast recently, and it's Duolingo. And they have just a fantastic leadership team, fantastic culture. You know, their CEO in their most recent earnings call had marketing in the first paragraph of what was driving their incredible results on brand and performance. So they really think about these two together. They have the teams together. They have the same KPIs. They believe that performance marketing has to build brand, brand builds performance. And they have this crazy mascot, which they manage so beautifully.

1:54He shows up in all kinds of different ways. He's snarky. And by the way, when the mascot is in their marketing, they build performance. And the mascot is the brand. When people ask me to study a brand who gets this topic, I tell them to go look at what Duolingo is doing and how they think about this whole topic of brand and performance. And by the way, the brand is hot. They have high levels of retention. They have new users coming in all the time. It's a sticky brand. So they really have figured it out. So my advice to everyone is go take a look what that brand is doing. There's insights for everyone.

2:26Lindsay, how about you? Oh, Duolingo is such a great one. I'm obsessed with them too. You know what I've, what brand I've really been like looking at lately is Depop. Do you guys know Depop? Yeah. Depop is a, it's a resale secondhand marketplace, but they, I think have done, and you know, like I think secondhand like marketplaces can become very functional pretty quickly, but they have done such a beautiful job of creating not only like a brand, but like community and culture. I think they have like a, I was listening to a talk from someone internally and they were saying how they have a, they have a saying, like you come for the clothes and stay for the culture.

3:03And I think they do such a phenomenal job of cultivating culture and, and community and then using their, you know, sellers as their, as their marketing. They've tapped into like kind of niche aesthetics and niche fandoms and niche obsessions in youth culture. So beautifully. and I think really have understood self-expression and creativity, but they also still do, I think, phenomenal performance marketing at the same time. And it seems like, you know, I haven't heard, it seems like they don't see them so separately, which I think is probably a big takeaway we'll be talking about today. Ryan, your turn.

3:40Bring us home. Jim, who gives a crap? Not being rude. That's the name of the brand. Have you heard of these guys? Started in 2012 out of Australia, expanded into Europe, doing really well in the UK and came to the US in 2024. It is a purpose-driven brand, make things like toilet paper. Their ads are incredibly cheeky and they give 50 % of their profits to something near and dear to all of our hearts in terms of a purpose-driven brand. And for today's topic between brand building and performance marketing, what I love about who gives a crap besides their packaging and their ads and fun is that they have a pretty low cost of acquiring customers.

4:22It all started with brand led, which is one of the things we're going to talk about. And they're direct to consumer. But recently in 2024, when they came to the US now, Whole Foods, Target and Amazon have been distribution. So I'm glad that Lindsay brought a smaller brand and we gave another smaller brand as an example. These are ones to keep our eyes on to see what's happened. So yes, Jim, who gives a crap? Where are the founders from? Are they ex-PNG? But do they come from KC or P &G or any? It's a good question. All right. One's come from P &G, right? We got to see. Not always. Three gentlemen.

4:58Three gentlemen. All right. Well, listen, let's get nostalgic and look back at last week. We had Raj at MasterCard on the show. We went into ROI in a deep way, and he is such a seasoned leader and so articulate about his strategies. I mean, we always learn something to listen to him. But this week, we're going to get into what we just talked about. That's brand-to-performance marketing. And Ryan, I think you need to kick us off here because you love this topic. You can talk about it endlessly. You have data to support it. Your company is very much about this. So why don't you kick us off and get us started on talking about brand-to-performance marketing?

5:31Yeah. Well, you also, with the publishing, great work on Harvard Business Review, where we started this off two years ago with brand versus performance. And then now more recently with the work report that was published earlier this year with our friends and other colleagues on called the multiplier effect. There's been this false choice that performance marketing is the king and that as long as we are spending the bulk on performance marketing, brand sort of like a nice to have because you can measure all those clicks. And what we've managed to calculate is that the reality is performance marketing performs well when you're brand led and that it's not brand versus performance.

6:10It's brand times performance. And you can unlock this quantifiable, predictable multiplier effect. Two interesting stats that we pulled. One is if you're a balanced brand between brand building, performance marketing, and you cut brand out, perhaps there's pressure, your ROI will drop on average by 40%. If you're a performance driven engine and you turn on brand and you become brand live, the median ROI in the work report is plus 90%. So this is the real deal. And I'm excited for our guests to get into this because I think a lot of marketers struggle to not only get out of what we would call the doom loop when you're performance led, but how do you persuade our leaders that, hey, taking two steps back might actually lead to five steps forward and using data and facts to have that argument?

7:01Well, listen, let's take a little tangent here. And I like both of your points of view on this. Maybe you first, Lindsay. was that data that Ryan just cited. Why is it still attention? Why is it the top issue people are voting on that they're wrestling with? I mean, the data is there and that multiplier effect got a massive, massive reach. Thousands of people downloaded that. Why does it deserve an episode in this series? It's a great question. I feel like anyone who's been in marketing has been in these tussles and these arguments have existed in every new business pitch and every client conversation that we've all had for decades now.

7:36And my instinct is that like, just in cultures that want constant optimization, even though the data is there, brands still feel so amorphous to people. It's so, you know, it's harder to see, it's harder to define. It's, you know, a little more irrational. You know, I wonder if that just rubs against this culture that wants, you know, again, even though we have the numbers that wants to be able to see the clicks and see the ROI and, you know, attribution modeling on brand is difficult and has a lot of challenges that come to it. And I think it rubs against this rationality, but it's funny because it just feels like such a false dichotomy because what is performance without something to perform in favor of?

8:20If you have no meaning or no idea or that your thing doesn't mean something to someone, what exactly are you optimizing? I don't know. Ryan, what's your take on that? We talked a little about this in, I think, a couple episodes ago, but short-termism, right? We're all obsessed with short-term gratification, especially Wall Street. I think for non-brand people measuring clicks and attribution in real time, they get to see the results. Not understanding that if there was the brand engine, that's probably contributing a significant amount of that success. Or if you're performance-led without the brand building, that's not sustainable.

8:55And that's when folks will end up realizing they have to spend twice as much, three times as much just to get the same results from this. So I think it's short-termism and measurability. And not a lot of folks realize that there's been a lot of upgrades on the ability to measure brands at depth in real time against culture. And I think that's it. Folks want to see real data to support these suppositions. What do you think would be the biggest change we can make? Is it KPI? Is it Unite Branded Performance? Is it organizational change to put these teams together? I mean, with the clients you work with, Lindsay, what are they doing?

9:28Yeah. I mean, it feels like a lot of times things are very siloed. And so you're not, you know, you're not having the right people in the room at the same, like these are two, it's kind of like the head and the heart, you know, like you have to yoke them together. And I feel like we're just so used to separating everything. And then, you know, we're fighting, like teams are fighting for resources. That strikes me as the biggest thing, but, you know, I'm curious, Jim, having run a lot of these teams at the highest level and have been in the highest level of these conversations, like, what did you see?

9:56I think it's almost always the answers in the organization and what you value, what you measure, how you set up your structure, kinds of things that are people that are heroes in the organization. So I think if you get everyone to realize that everyone's job is, I think Young Brands has a slogan, something like sales today, brand tomorrow or something. So everyone has to be working on things that build the brand every day and also build the sales. And they're in a very day-to-day business because they're in quick serve restaurants. But I think the answer is in how you set up your organization.

10:28Yeah, I think you're onto something that I think they've been quite often siloed with different KPIs to focus on, different incentives, not realizing it's two sides of the same coin. We talk a lot about how brand is the engine and performance is the accelerator. And without both, you're not going anywhere fast. Well, every week we bring on a guest that we think is a great fit for this topic. And oh my, is Andrea a great fit for this topic? She is the CMO at Ally. She joined the company way back in 2006 when it was just GMAC. Three years later, she spearheaded the creation and launch of the Ally brand.

11:03And in 2022, 2023, and 2024, Ally was highlighted on the Fast Company Brands at Matterlist. That's a big deal. And Andrea has appeared on the Forbes World's Most Influential CMO List five times, earning her a spot in the 2024 Forbes CMO Hall of Fame. I never got that spot, Andrea. Congratulations. I might be older than you were saying something, Jim. Thank you. No, I don't think so. Hey, last time you and I talked, we talked a lot about women's sports and the rising influence of women's sports. And you were early on that at Ally. And I suspect that that has had a visible impact on your brand. and your performance.

11:47So before we jump into this topic in more depth with Ryan, could you speak a little bit about that commitment to women's sports and what that's done for Ally? It's been incredible. For the 50th anniversary of Title IX, we made a commitment that for every dollar we spend in men's sports media, we were going to match that expenditure into women's sports media. And you think about the trajectory of what's happened in women's sports since that time, I would say we played a role in it, partially, for sure, as a bit of the brand architect of that movement. A lot of our concentration and our focus was in changing the media landscape for women's sports.

12:26And we've seen a commensurate growth in terms of what it's done for the Ally brand. Not only is it an internal pride point from our CEO on down, but our brand favorability, when we look at fans of women's sports is anywhere from 20 to 30 percentage points higher. And we know brand favorability has a direct impact on actually acquisition. So customers or fans of women's sports are six times more likely to open an ally account, and they're opening them at an 87 % more efficient cost to acquire. So we're getting it kind of on both ends of that barbell. Our brand valuation, we measure that with brand finance.

13:07Two years ago, up 31%, the financial services category down 3%. Last year, up again, another 4%. The financial services category again, down 5%. So you're just seeing these huge swings. And then 65 % of everyone that's coming to our storefront is female. And so we really feel very well positioned, especially Jim, given that the predicted wealth transference to women over the next five years is between 10 and 20 trillion dollars and by the way your paid media is doing a beautiful job too thank you it just is very emotional very insightful very interesting so i don't know who's helping you with that if you're doing that internally but i think that it's uh that's helped your brand as well we brought um all of our internal media strategy planning um in-house got an amazing team run by jennifer brockington and lonnie wiles and molly lawson who just do and michelle alfano I would just do an incredible job of finding us the right media, putting us in the right places.

14:09And then I think what we've launched in terms of kind of that, we call it the Ally Words campaign. It puts us in every moment that people need money, which is pretty much every moment in life, without saying those words. So the growth in the last several years has been incredible. And I'm really proud of where the brand stands today. From the Baradatas perspective, we've seen your core loyal customers, the lifetime value, strengthen significantly. And the average financial service brand, especially banks, are all sort of sitting in this commodity area. But your core strengthening, but the number of prospects who are raising their hand that say, I don't currently have an AliBank account, but I'm interested, is also growing exponentially.

14:51Besides the female sports, can you talk a little bit about other tactics or strategies that have led to that success? Yeah, I mean, I think for us, Ryan, honestly, the key differentiator has been that banking is largely a category that people are either unemotional about, apathetic, or they have disdain. And what we decided early on is that we were going to create emotion in an emotionless category. If you think about our classification, we're what's considered a super regional bank. And what's unique about us is we've been able to create a national footprint, even as a super regional bank. And the value proposition is very different in that it's customer first.

15:33And it's, you know, this notion of financial services that truly serve. And we've really tried to tap into that from a marketing perspective. So whether it's things like the commitment we've made to women's sports, whether it's things like our annual banks giving campaign, where we literally give our call center advocates$500 ,000. And we say, spend it however you want on this day with our customers. And our frontline employees are actually having the opportunity to do really unexpected things to help our customers. And then we capture all the content and put it out there. Two unique partnerships that we've done with companies like Hello Sunshine.

16:10And we've created two slates of shows with Hello Sunshine around this notion of side hustlers that really tapped into the insight of how many women left the workforce during COVID and are trying to turn their side hustle into their main hustle. To, you know, just even integration now into a lot of content and shows like hacks and different things. For a brand, whether it's kind of small in terms of our go-to-market spend, I think the creativity is off the charts. And we've really intersected culture in a really unique way in a category that doesn't care about. Awesome. That makes a lot of sense.

16:47You know, today's topic is about brand building versus performance marketing. A lot of organizations struggle with the over-reliance of performance marketing. Can you talk a little bit about that within your organization? Yeah. You know, look, I think about it as demand generation and demand capture. And I think they're completely aligned and you can't have one without the other. And so we try not to overly focus on is this brand or is this performance? We really think about it in the pieces of, you know, kind of generation and capture. We did something really interesting a couple of years ago with MMA and TransUnion, and we actually went out, Ryan, and we tested with 850 ,000 consumers, and we split those groups, and we said, for one group, we're going to just serve a steady diet of, you know, kind of demand generation advertising, and for the other, it's going to just be all demand capture, so a lot of just rate advertising.

17:36And then we look at the differences in terms of what those two different streams of creative did in terms of creating affinity, cost to acquire, and lifetime value. And it was the first time I think there was an industry piece of research that actually proved the fact that you need both. And that's where we really saw that those that got the steady diet of that demand generation advertising not only were more efficient in terms of cost to acquire, but they grew their lifetime value with us at a really significant clip. And so that's been, I think, a landmark piece of work that we've used to really help us think about investment capacity, but also change the narrative internally and kind of up and down the C-suite.

18:23Can you stay with that, Andrea? It's a beautiful story. Can you go a little bit deeper on what you've done organizationally to be sure that people are working together? Maybe they're sharing KPIs, Maybe they're on teams together. So can you talk about how you've set up your organization to really execute what you just talked about? Yeah, absolutely. So actually, I've just gone through a massive operational reorganization on my entire team. And one of the things, Jim, that was a little bit unique about my team is the different pieces and parts of it. So I've got marketing, I've got comms, and then I've also got product innovation.

18:57And we do product innovation in a unique way through something that we call TM Studios, Truthmark Studios. maybe a little known fact, but our ally A is what we call our truth mark, because we've always wanted the brand to stand for transparency and truth. And so TM Studios is within my remit as well. And as a result, you know, those things don't all fit together. They make sense together, but they don't all fit together. And so we just went through a pretty intensive six month, really duration of time that myself and my leadership team got together and worked with Marcaps and said, okay, what are the different capabilities that a modern marketing and communications machine needs to have?

19:41But then we matched that against high-performing organizations. So what are the organizations that are driving the highest output? What do those capabilities look like of those organizations? And then we mapped that against what do we want to have? What are we good at that we need to keep? What are we not good at that we absolutely have to have? And what are we doing today that maybe doesn't make sense or nobody cares about anymore? And then how do those pieces and parts come together? And so organizationally, we designed around this idea of really kind of a group responsible for insights, future thinking, innovation, AI strategy, MarTech, all the things that kind of fuel the thinking across the group.

20:24Then we created clear lines around execution. so media audience strategy budget allocation identification of kpis that group has owns all that and then the other group that owns all the manifestation of the way that we show up in the world so they take that plan and have creative top to bottom content social all of it and then a group that measures us so i call it switzerland right direct report into me no budging the data know versions of your own reality, measurement and optimization and that how comes and kind of office the CMO round that out. And then one group with all of product and lifecycle marketing.

21:09And so it's really almost, I don't want to say a linear flow because I don't think there's any such thing as a linear flow in this marketing communications world. There's clear lines, there's clear ownership, and one piece fuels the other and helps bring to life the strategy that we've just talked about. Andrea, I'd love to double click on one of the parts, budget allocation. For a lot of our audience, that might be a challenging piece between brand building and performance marketing. Can you talk a little bit about that process? Yeah, absolutely. So, you know, we start with baseline, right? What are we committed to that we just have to allocate?

21:44I mean, long duration sponsorship. So you kind of start a little bit backwards, agency fees, etc. And then from there, what we try and do is what I would call zero-based budgeting, which is, let's not think about what we did last year. Once we take out the commitments that we have, knowing what our business goals are, knowing what the complexity of the media environment is, the complexity of the consumer, how technology is changing things, we create these waterfalls. And we say, okay, based on all of those elements, those are different inputs. Let's develop a waterfall that would actually get you to what is the right number from a media perspective.

22:21And then we decide, okay, we either have enough budget for that or we don't. And align on what we think that number needs to be. And then from there, really work through how much of it needs to go into demand generation and how much of it really needs to go into demand capture to balance the two things that we're always constantly trying to balance, one being brand health KPIs, and the second being business outcomes. And one of the things that I really like, Ryan, that we've done that I think is different in the last couple of years is the senior leadership team at Ally has a shared scorecard.

22:58And so awareness and brand health KPIs are not just on my scorecard. They're on the CEO scorecard, the CFO scorecard, the business leaders, the head of HR. So it's forced very different kinds of conversations. In fact, the reason I was late to get to you guys is I was just with the CFO and our CEO and our head of the consumer business talking about the fact that we're trending negatively on the brand health KPIs. And what are we going to do to bolster that in terms of incrementality? Because now we all own it. And it's not a fight between me and our CFO of I don't care about awareness. That's your problem because we're not going to get paid if we don't deliver on our shared scorecard.

23:39Sounds like the organization truly believes that brand is everyone's responsibility. I think that's a brilliant recommendation for folks because we've seen many, many companies where the performance marketing folks have their own KPIs, brand has their own. And the fact that you guys have laddered this up across all leadership and brought them in, I think is brilliant. One of the things I think has always been a differentiator at Ally and is special about this place and probably the main reason that I've stayed here my entire CMO career is the fact that I truly believe that everybody walks the walk when it comes to believing that the brand is a shared asset that we all have responsibility for.

24:17And I will tell you the business has done things like waiving overdraft fees and being the first to waive overdraft fees that were big brand acts that had more impact on anything than what I could have done from a marketing perspective. I think the same holds true for the way that our frontline employees show up and interface with our consumer customers and our dealer customers every day. The way that my HR partners think about benefits, recruiting, training, even the way that we evaluate ourselves on the what and the how at Ally. and the how is rooted in the principles of do it right, which is our tagline, you know, which we consider the golden rule.

24:55So it is, it is integrated across the totality of the company, all the way up to like our investor relations group and how much they talk about brand. And if you listen to one of our earnings calls, our CEO will talk about brand and the performance of the brand all the time. And it's not from a marketing perspective, it's an asset that the entire organization owns. And I think that's what's truly set us apart. Here, here. Andrea, how did you get there? How did you get to a place where everyone sees it as a shared asset? You share KPIs, brand is talked about in your earnings reports. Has it always been in the genes of allies since you started?

25:34I honestly think, Jim, because it's been part of our origin story. I mean, if you think about, you touched on it on the onset, we were GMAC. We were spun out of General Motors, bought by Cerberus, taken private with the intentionality of going public. Right when that happened, it was during the worst financial crisis since the Great Depression. Took a$17 billion tarp loan from the American public, which we paid back in full with interest, I may add. And the origin story was we easily could have been left for dead, but we had to create something highly differentiated. And we had to create something that wasn't going to work unless everybody owned a different piece of it.