Brand Equity ALSO Does Performance Marketing (Just Not Immediately)

Brand Equity ALSO Does Performance Marketing (Just Not Immediately)

In my previous post, I had mentioned that Performance Marketing DOES build Brand Equity (Just not efficiently).

Thanks to some interesting comments, it gave us some food for thought to consider the opposite.

Hence Venkat Raman and I brainstormed to ask – “Does Brand Equity also perform Performance Marketing?”.

The answer – Yes. But not immediately.

Let me breakdown our thought process.

📌 Brand Equity is a “Delayed Performance Engine”

Brand equity is essentially stored future conversions. Venkat in one of the posts likens it to Dynamo on a cycle (link to post in comments)

“Brand equity is like a dynamo on a bicycle – the more the brand keeps moving through consistent advertising and presence, the more energy it stores. And when the pedaling stops (spends turn off), it’s this stored energy that keeps the light on (continuous sales).”

What performance marketing tries to do instantly (drive a click, a conversion), brand equity does silently and over time and most importantly ‘Repeatedly’.

📌 The “Pre-Sold User” Effect

A strong brand doesn’t start from zero. It already enjoys good:
– Familiarity
– Trust
– Mental availability

So when a performance ad shows up, the job is already half done. The ad is not persuading. It is activating existing memory.

📌 Why Brand Equity Lowers CAC (But No One Attributes It Correctly)

Many in platform dashboards will tell that Meta drove X conversions or Google drove Y conversions but they won’t tell you how easy or tough those conversions were.

But there are always tell tale signs. If Brand Equity is good, it manifests in the form of lower CAC.

However in terms of attribution, one funny thing happens – Last touch attribution takes all the credit 🙂

Many brands scale performance budgets without realizing that brand is subsidizing efficiency !!

In this regard, we strongly believe in the 60:40 heuristic suggested by Les Benet and field.

~60% marketing spend on Brand always pays well.

📌 Evidence We Keep Seeing in MMM

Across multiple MMMs (DTC, CPG, Streaming, QSR, Pharma) at Aryma Labs, we noticed an interesting pattern.

When brand equity increases:

▪️ Digital channels show stronger response curves, i.e Saturation kicks in later
▪️ Incrementality per dollar improves

In essence this is performance powered by brand.

📌 The Full Funnel Compression

Generally, we think Brand = Awareness, Performance = Conversion. But what really is happening is – Brand equity compresses the funnel.

It reduces the distance between: Impressions -> Clicks -> Conversions

📌 In summary

If performance marketing is about “Getting conversions today”

Then brand equity is about “Making future conversions easier, cheaper, and more predictable”

Brand Equity ALSO Does Performance Marketing (Just Not Immediately)