You can also watch this interview on my Youtube Channel

*PS. Below you will find an auto-generated transcript of this episode.

Arek Dvornechuck: Hey, what's up Branding Experts?— Arek here at Ebaqdesign. Welcome to On Branding Podcast, and today I have a very special guest, Faisal Siddiqui. So Faisal is a brand strategist with over a decade of experience working with different brands like Shell, Turkish Airlines, Waze, Samsung, Formula E, just to name a few. So Faisal has also co-authored white papers with David Aaker and also lectured on brand strategy at York University and has been featured in many publications like BBC Marketing Magazine, American Marketplace, and more. In general, Faisal is on a mission to make brand marketing more accountable and effective for all.

Hello Faisal, thanks for joining us today.

Faisal Siddiqui: Hi Arek Thank you for having me.

Arek Dvornechuck: I really like your presentation, so we are gonna link to that so listeners can, also look through this. I think it's super insightful. well, put together, well designed. you guys can subscribe, you can just go to. Faisal's website, which is creativebusinesscompany.com. And you can If you're on computer listening to this podcast or watching to this podcast on YouTube, you can just also browse through this presentation because we are gonna talk about some things that Faisal described there. So I just want to start with a simple question. What's wrong with performance-based marketing? Because it seems like most brands these days that's how they often market. so can you explain to us what's the biggest problem with this approach?

Faisal Siddiqui: I think there's nothing wrong with performance marketing in general. I think the challenge is when small brands only invest in performance marketing, it's very hard to scale profitably just with performance marketing And I think if you look at, the DTC business landscape if you look at, great DTC businesses like Bonobos, the guy who started Bonobos famously says, the business model is broken. It's fundamentally broken. And the reason why is that in a nutshell, it costs too much to acquire a customer. This is why most of the DTC brands that you know of, from Casper to Warby Parker, These, all these companies are unprofitable, so they make less money than they spend on every customer, and I think one of the challenges a lot of the people, within the brand marketing world have had over the past decade is we haven't had the language and the arguments to explain what is the best business benefit of brand marketing without talking about it in a very fluffy way. But ultimately, to answer your question, I think the challenge with putting a lot of your money or all of your money, all of your budget into performance marketing is that it's a very hard way to scale profitably.

Arek Dvornechuck:Right. So the customer acquisition is very high. So just to sum up for our listeners, I have some key takeaways. So basically performance-based marketing. Is when you are just using like hard sales messages, like discounts and limited-time offers, and you are just basically advertising to in-category customers, right? And I like this diagram in your presentation its just 5%, but 95% of your potential customers. They are not ready to purchase right now. They may not actively be looking for your products or services right now. So think about, when you're advertising on Google, on Facebook you're targeting specific keywords, for example, that's performance-based marketing.

You're trying to sell your product basically right away using these ads. But the problem is that they're expensive. A lot of companies bid for the same, keywords and betting and bid against each other. You advise a kind of a different approach, like a mix of both plus good positioning, right?

The next thing I wanted to talk about is you had this section in your presentation about the secret behind big brands. Can you talk to us about that?

Faisal Siddiqui: Yeah, I, think before we go into that, if it's okay with you, I just wanted to. Talk a bit more about the difference between performance marketing and brand marketing. I think that might be really helpful for your listeners if that's okay. So there's a really great statistic coming up out of the Ehrenberg-Bass Institute. It's an institute of Marketing Science based in Australia, it was founded by or it's led by Byron Sharp, and one of the statistics that they have, it's called the 95-5 rule. It's exactly what you said, which is if you look at the lifetime revenue of a brand, only 5% of its active or total customers are actually shopping in the category right now. Well, what does that mean? that means 95% of your future customers are not in the category and they don't have a need right now, so they're not to buy. So from that 95 and five is a really good way of thinking about the different types of marketing. So first let's just talk about performance marketing. Performance marketing, as you said, is very good at converting existing demand. Why? Because it works based on intent. So if you are on the internet, And if I am looking for shoes, I will get ads that show me, different shoes, brands with a click button that says Buy now. So what's happening ultimately? performance marketing works when people display some sort of purchase intent. And how is that different to brand marketing? If you think about brand marketing or you think about the 95% of people who have not displayed intent, say for example, I may buy a shoe in the future, but I'm not looking forward to buy shoes right now. Those click-based ads don't work on me. Because I don't want a 2-for-1 deal. I don't care about whether it's 50% or not. I have two pairs of shoes on my feet. I'm fine. So that's where brand marketing comes in. So brand marketing is very broad-based advertising. That's not trying to sell you something right now, but it's a soft sales message. It's trying to tell you something about the company, and that's how we advise our clients. You need a mix between both brand marketing and performance marketing

Arek Dvornechuck: No, that's a great explanation. So basically those 95% of your potential customers who might wanna buy shoes from you, but in the future as you said they're not actively shopping right now. But you can start, reaching those future customers as well and start positioning your brand so you are top of mind when they need those shoes, right? When it's time to buy, you can start positioning your brand, talking about why you are different, what makes you different talking about benefits, and stuff like that.

Faisal Siddiqui: I think you just, nailed it there, but the killer cheat code of brand marketing is that when someone does enter the category, your brand is the first brand that they think of. So they don't even bother with research. You've already advertised them. So you're actually hitting them before they are ready to buy, and that fundamentally is actually a more efficient approach than competing, at the point of sale.

Arek Dvornechuck: Competing for the same clicks right at the point of purchase. So can we now talk about those secrets of big brands because, many of, listeners or people who have, smaller brands or startups, They don't really have, they may think it's expensive to advertise in mass media on tv, right? Those are very expensive and expensive ads. Big brands, of course, they have a budget and they can show money on mass media. But What happens if you have a smaller, budget, right? This is the title of our podcast. So how to advertise like big brands, but on a smaller budget.

Faisal Siddiqui: So the way we do it with our clients is one, we primarily, advise them to invest in digital video and to, instead of doing big billboards and television commercials, you buy online video. So why do we, first of all, why do we say video? We say video because brand marketing really good and effective brand marketing elicits an emotion. And I'm not talking about an emotion like where I'm trying to get someone to cry. It could be I, wanna startle someone. I wanna make them laugh. I wanna make them smile. The easiest mediums to do that are ones that allow you to tell a story. So that's the first reason why we talk about video, digital video.

The second reason why we talk about digital video is it's cheaper than a performance ad. So the cost, the average cost per click for, say, an Instagram ad that says buy now is between five and $10 per click. The average cost per view for a video is 10 cents. So it's actually a lot cheaper. So one, you want to use video because you can tell a story. Two, it's actually pound for pound, cheaper.

The second thing you want to do is you want to target your brand advertising as broadly as possible. So you can't do the whole world, but you have to do some math to say, where can I actually spend my money in the broadest way possible? Maybe it's at a city level, maybe it's a state level, in a way that allows me to show my ads between two to three times. So in any campaign, you want to show your ads between two to three times. For every user. So that, those are the first thing was video. The second thing was to target very broadly. The third thing that we advise our clients to do is actually what we call, it's called the 2-4-5 method. And it's a way of actually creating a year's worth of ads in one go. So how do we do that? What we actually believe is that with enough smart planning, one of the biggest, expenditures in doing brand advertising is actually to go on set. It's your production value. So the way we think about that, instead of doing that two or three times, you can actually design your ad such that from one ad you get all of the different content that you need. For an entire year. So in our 2-4-5 method, what we actually talked about is generally what any brand will need, probably two, what we call, anthems. These are 30 to 60-second commercials. What you can then do is you can take those commercials and you can cut them into what we call short stories. These are 15 second 5 to 15-second bumpers. Think about the things that you see before YouTube. And then finally from that same shoot, you also get an image library. So you get all of your static photography. So if you think about going on set, or maybe you're doing an animation From one ad, you can get all of the different advertising units you may need for your entire year for both paid social and organic social.

So the way to think about it is at the top of the 2-4-5 it's two 30 to 60-second anthems. the middle row is a number of 15-second short stories, and then finally you have your image libraries, which you can use on static.

Arek Dvornechuck: It makes total sense. and again, I recommend you check out the presentation and it's nicely explained this framework, but basically, it refers to the frequency. So you should Be able to run your hero creative two times a year. Right? And then like short stories, as you mentioned, 15 seconds or less. And you can do this four times a month, like every week, let's say. And then you can also use all as you mentioned already, static graphics. It could be, gifts and all the other visuals. And you can do it like every day, right? So five times.

Faisal Siddiqui: Thanks for helping me out there because I actually forgot to mention that.

Arek Dvornechuck: So that's one thing. We already covered the 40-60 rule. So you advise basically to a mix of both. So 40% you should aim at spending 40% of your budget at performance marketing. But A bigger chunk of that 60% is on brand marketing, right? So start, so position your brand to those future customers. So a mix of both. And then we already discussed your approach to, how to create those ads fast in, in one take 2-4-5 And we also have these Eight principles of marketing effectiveness, which I find really interesting. So if we have time to cover at least a few of them. So maybe starting to go a long and short or talk to everyone. Can you speak to us about a few of those principles?

Faisal Siddiqui: I'll just start with the, simplest one actually is one of the most effective ones, which is really it's your ads have to be different. And I understand for a lot of small companies, especially if you have a SaaS-based product or a software-based product it's hard to figure out what is a distinct feature or benefit. But one of the biggest challenges with ads, everyone knows this, but most ads are ignored. First thing. The second problem is even if someone does recognize an ad, they don't know which brand it's from, just because the messages are so different. Really making sure your ads are different, both in terms of the message and then how it looks is so important to improving the effectiveness of your marketing. And how do you do that? You have to go all the way back to your original brand strategy and your visual identity. That's where you really, really figure out what is fundamentally different about your brand. And then that creates, differentiation and distinctiveness. The second, is this idea more around budget allocation, around going long and short. And you, had, alluded to it, but it's this basic idea that we're not saying you just do brand marketing or you just do performance marketing. You need a bit of both. so there's been some landmark studies coming out of the IPA, which is the Institute of Advertising Practitioners in the UK where they have, hundreds and hundreds of advertising campaigns, they've come to this golden principle that you want to invest 60% of your media budget into brand building and 40% into performance marketing. And that comes from the study called the Long and Short of It for anyone who wants to see. So that's the second thing. The third thing to really, to talk to everyone. And again, it comes from this landmark study, but this idea that it's far more profitable to talk to the entire market than just to your own customers. Often, sometimes what we'll see within marketing departments is this idea that, oh, we can just get our existing customers to buy more. That actually is a fallacy. It's far, far more profitable to talk to new customers and prioritize acquisition. the third or fourth principle is this idea of being everywhere. Which is this very basic principle that as you add different media channel, your ROI increases. So say, for example, you're on YouTube, add one more thing, add like radio, or add a print ad for every single additional channel your ROI increases. Why? Because you're increasing the probability that people will run into your ads.

I think I'll say one more thing, which is, A basic principle, which is this idea that you want to say less to communicate more. And one of the things that we often see is that a lot of clients or brands are trying to put way too many messages in the ads, but with every single message that you add into the ad, the less likely it is to remember. So really having one single clear message per ad, in fact per campaign, drives the effectiveness of your advertising and spending.

Arek Dvornechuck: Okay, so we covered four of them. There are a couple more, and we're gonna link to this presentation for you guys to check out. So yeah, some of the key takeaways, if you have a smaller brand maybe you shouldn't just double down on performance marketing like everyone does because it's expensive. Customer acquisition as you mentioned at the beginning of our conversation is about $5 to $10, right? And while it's good. You are not really targeting those future customers. You're only targeting those, this 5% of those who wanna buy right now. And it's really expensive. You have to have deep pockets to convert well just with this type of marketing. So you should use a mix of both. You should use good positioning and you strongly advise. As you already mentioned. you know, on video. Video form is a great way to tell a story, and storytelling that's what's gonna elicit those emotions, that's what's gonna help you position your brand. Yeah, those and more tips you can find in this presentation. We are gonna link to that, but, so as we are approaching the end of our episode can you tell us? Where we connect with you was the best way. Are you active on LinkedIn?

Faisal Siddiqui: Absolutely. You can follow me on LinkedIn, Faisal Siddiqui. You can find us at our agency website, creativebusinesscompany.com. We're also on LinkedIn, Creative Business Company, and Twitter as well.

Arek Dvornechuck:Okay. Awesome. Thank you so much for coming on the show. I appreciate that.

Faisal Siddiqui: Lovely. Thanks, Arek. Thank you for having me. Wonderful chat.