May 28, 2024
May 28, 2024

Brand and Performance - Getting the Balance Right

One of the biggest challenges facing marketers is how to split their budget between brand and performance campaigns that drive outcomes. With often competing objectives, different teams and lines of reporting, getting alignment internally on such a strategic decision is often challenging. 

In order to shed light and provide Snapchat’s perspective around the brand vs. DR debate, Snapchat commissioned a meta-analysis with TransUnionto evaluate the Return on Ad Spends (ROAS) in driving sales and to specifically look at how brand and DR campaigns work together. 

Snap is highly supportive of MMM efforts of brands, and we partner with key third-party MMM suppliers to ensure campaign outputs include the granularity and specificity to properly measure Snapchat’s advertising contribution to sales and return on investment.

The research covered: 

  • 3+ years of data across 36 advertisers spanning Commerce, Quick Service Restaurants (QSR), Technology, Telecom and Travel brands. 

  • Up to 12 channels per category, with a total marketing investment of over $15 Billion across all categories.

We recently published these MMM results, highlighting that Snapchat drives stronger ROAS on average compared to all Paid Social platforms in aggregate. You can find more here. In addition to our research with TransUnion, we also partnered with Dentsu for their expertise and views on this topic, as well as understanding how they engage in this debate with their advertisers.

Busting myths - brand campaigns can drive ROAS (esp on Snapchat!)

Across the campaigns included in the analysis, the split between brand and DR campaigns varies by categories and brands. Since 2020, QSR and Technology campaigns on Snap skewed towards delivering brand spend, whereas Commerce, Telecoms and Travel spend was largely contributed through DR campaigns.  

One of the questions we wanted to address is whether or not brand campaigns actually impact an advertisers’ bottom line and drive sales, or do they just drive brand awareness?

Although the share of spend between brand and DR was different per category, we found that across the board, there is no tradeoff, and both campaign strategies were efficient in driving sales. Both the brand and DR campaigns contribute disproportionately more sales relative to the share of budget each campaign type receives.

Graph showing Efficiency index (Brand vs Direct Response)

One key takeaway from the research is that brand activity drives sales, especially on Snapchat! If we take a closer look at the Commerce category for example, when ROAS is split out between brand and DR campaigns, the research found that while both campaign types drive above average ROAS,  brand spend drove the higher ROAS. Brand spend driving above average ROAS was not unique just for the Commerce vertical. This is true across all the other categories in our research.

Graph showing Brand vs Direct Response indexed returns

One plus one is more than two - Combining brand & DR campaigns delivers greater ROAS

Now that we know brand campaigns drive sales on Snapchat, it is important to understand how brand and DR campaigns work together on Snapchat to drive the greatest impact.

Across all of the verticals, the analysis revealed that running brand and DR campaigns concurrently delivers incremental ROAS compared to running in isolation to one another.

Graph showing Brand vs Direct Response impact of Campaign Objective Synergies on Indexed ROAS

For example in the Travel vertical, the analysis found that brand and DR campaigns generate a 10% lift compared to average Snapchat indexed ROAS, demonstrating that they work better together compared to running in isolation. For the tech vertical we saw a 9% lift, and there was an 8% lift for the Telco vertical.

Brand vs Direct Response graph of average Snapchat ROAS

You don’t have to choose but rather do more on Snapchat

For brands who are still unsure how to split their money between brand and DR on Snap, the good news is that there is an opportunity to increase spend across both of these and still drive incremental sales. Spending more on Snap will ultimately drive more sales! 

TransUnion found that increased spend in both brand and DR are suggested for advertisers to achieve growth in incremental sales.

Brand vs Direct Response average increases

What does this mean for brands?

  • Educate your stakeholders that brand campaigns have the power to drive sales outcomes. esp. on Snapchat. 

  • Flight brand and DR campaigns concurrently to drive greater ROAS

  • Understand if sufficiency has reached in both buckets and accordingly allocate budget to platforms like Snapchat

Don’t just take our word for it. We reached out to Dentsu who are also exploring this topic to find out more:

This analysis provides further support for Binet and Field’s finding that brands achieve best advertising returns if they blend brand building and activation.

Dan White, Research Consultant

Dan is working with Dentsu on a complementary piece of research that will focus specifically on modern video formats and build upon this body of work.

More and more proof points will validate the need to drive a more connected approach especially as the landscape evolves. Our fresh & exciting research program into Modern Video, as well as work done by partners like Snap, will look to provide additional and actionable insight into how to balance both brand and demand to drive optimal outcomes for brands in the long run.

Clive Record - Global Partnerships, Dentsu

If you would like to see the full reports for each vertical then please reach out to your Snap Sales Rep or Marketing Science Lead.

1 Source: 2023 TransUnion study commissioned by Snap, Inc. Data representative of 36 U.S. advertisers across Commerce, QSR, Technology, Telecom, Travel, 2020-2023.