Today on Tackin' Growth, we have the second part of our Summer Brand Measurement event featuring Matt Chinella and Dale Harrison. This is part two of three. We're releasing them in part so you have a chance to really engage with the information presented. Today, they're covering how brand and performance can work together to create an integrated strategy as well as common mistakes and limitations of both pillars.
They dig into more of the psychology behind memory and response, how to form a proper call to action, and answer audience questions. Hope you enjoy! How do brand and performance interact? So they're actually very tightly wound and a big mistake you see companies make is where there's like the brand group and then there's the marketing groups and that's a very bad idea.
So good brand ads make performance ads work better and bad performance ads will wipe out the benefit of the brand ads that you've done. And I would add here it's not just the ads because these brand memories come to us through a variety of channels. Advertising is just one. So there's word of mouth.
There is incidental exposure to the product. Every time we see a Toyota go down the street with a Toyota logo on the side, we're reminded of the brand. There's also prior direct lived experience with the product. If we spent four years in our last job using Asana, we're likely to remember Asana when Assembly Need arrives in a new company.
So anything that forms or refreshes a brand memory is brand marketing, even if it's things that happen outside the purview of the marketing group. So one of the distinctions here between brand and performance is the fact that we know that most buyers are not in market in a given time. So about 95% of your buyers are not actively in market in any given moment in time. So the performance ads are going to be effective at driving buying actions for the 5% who in market.
The brand ads are going to impact the 95% of future buyers so that they can consider you once they choose to come in market. Again, this is part of the reason why the brand ads need to be very brief, very short, require low attention and use devices that will aid in durable memory formation because the purpose of that brand ad is to either implant or refresh a memory in someone who is not currently in market but will be in the future. So performance ads have limitations. So one is that they primarily work on people who are in market buyers.
So that 5% that are right now today in market. So one of the things is that the impact of the performance ad, even if they remember it, is typically not going to be more than about one cell cycle in the future. So what it means is that we're running an ad campaign, we've got 10,000 impressions of that ad today. Let's assume all 10,000 actually saw and recognize the ad.
The only people that add the effect out of that 10,000 is the fraction of them who are going to be coming in market sometime over the next one cell cycle. And so the performance ads have a very, very short shelf life before they really are not going to affect people. And again, because they primarily are triggering actions for people who are in market, what that means is one cell cycle out, anyone that had impacted will have already made a buying decision. And so they're now going to be not in market for months or years to come.
So any memories that that ad may have created is going to have no commercial value for a very long time to come once they made a buying decision. So and the other problem is that performance ads have been shown to induce no effective long term memory of the brand. And again, some of this goes back to cognitive issues around these different sort of pathways. And one of the things that we're wired for is to only remember things that are important to remember.
And so if we go to the example of pulling up to a stop sign, we go to that stop sign every single day for the last, you know, 2000 days, there's a clear sort of task completion point with that. So we pull up the stop sign, look both ways, it's clear, we hit a gas. At that point, we do not need to remember that event that that's an extra level sort of metabolic load on the brain to then store that memory away. And so one of the things that the brain does is it has short term working memory and then long term drill memory.
And if that short term memory is tied to a task completion event, what will occur is that the brain will dump the contents of short term memory at the moment the task completion trigger has occurred. And you literally have complete amnesia of what just happened. And you know, one of the things that we, you know, that happened, for instance, in with the design of ATM machines 25 years ago, was that for decades, the big problem with ATM machines, the banks that was that people would leave their ATM card in the machine and drive off. And what was happening was the machine would take the card, you do the transaction, it would give you money.
But the task completion point for that entire cycle was to get money. And the moment your fingers touch that stack of cash is as it comes out of the machine, your brain does an immediate memory dump of all the working memory. And you literally forgot that the card is still in the machine until the next time you need to look for the, you know, for your debit card. And so what ATM machines did about 25 years ago was they all redesigned got redesigned so that they force you to take the credit card back before they give you the money, you know, and watch this the next time you go to an ATM machine.
And the reason why is that that task completion trigger for an ATM transaction is your fingers touching the stack of cash. And the moment that happens, you know, the other thing they'll do is they'll give you any paper receipts back before they give you the cash. So they force you to take the card, they force you to take the paper receipt. And only then does the door open up and give you cash because they know the moment your fingers touch that cash, everything that happened before will be dumped out of memory.
And the same process is happening with performance ads that you know, you either you're going to make a binary decision, click, not click. And whatever that decision is, either to click or not to click, you've you have hit a task completion trigger and everything just saw gets dumped. And so this is a real limitation for performance ads. And this is why you really can't effectively do combo brand performance ads in a single creative.
I think we had a question like I want to something to this in particular, I want to add to the thing on the ATM because I think another design thing they're doing now is just doing the tap to even to even take the card out of the equation for you in that in that motion. But I think going back the last bullet point, I think here is super important. And because one of the reasons why a lot of performance ads have no effective long term memory is because they're all a unimodal almost in their offer. It's like, it's get a demo free trial, give car for a meeting, like a lot of the offers that come into performance ads almost across the board, regardless of the brand are very much the same.
And so you're basically filtering in the moment whether you are in market for that solution or not. And beyond even being in market, whether this offer even interests you. So there's just a lot of there's just a lot of sort of horizontal ways, I guess, that comes with that overrun. I think that's a huge, a huge reason why these things have no effective long term memory is just essentially the execution of it as well, which segues into the question that Harry asked, which I thought was an interesting one.
And there's another question from a myth that I also want to make sure I give it to but Harry asked, or sorry, was it Harry that asked it or no, it was a cart the key. And I hope I pronounced that right about what are the guard rails on making good performance ads in your estimation, or are there even any guard rails in your professional opinion on it? I mean, I think this goes back to what do we want the thing we're making to accomplish. And so again, the idea with the brand ad is we want either the refresh or formation of a durable memory association with a reculturator with performance, we want some sort of an immediate action that will advance a purchase process, a buying process.
And so you're talking about a lot of the answer very uni-modal. That's true, but that's also not necessarily a bad thing because part of what makes a really good performance ad is that there's a single very clear call to action. And usually, if the call to action can be stated as some sort of a declarative statement, like would you like to see this? Would you like a demo?
You say, get a demo now, because people are going to be more likely to respond if you give them an order versus if you ask them a question. And so again, everything you're thinking about here is you want them to take an action because the ad brings you no commercial value if someone looks at it and passes. It only has commercial value if someone takes the action. The other issue with this, which is massive, and I've got a lot of data that I personally developed on this over the years, every time you add an additional call to action, you're going to cut your response rate in half.
So if you've got a 50% response rate for one call to action and you throw a second one in there, you're going to cut it to 25. If you throw a third one in there, you're going to cut it in half again to 12. You put four of them in there, you're going to cut it in half down to about five. Because what happens is, is that you're now forcing a branching decision process inside the brains of people.
The more branching decision processes they have to work through, the more likely they're going to take the easiest way out, which is do nothing. And so, I mean, you see this very, very badly done in a lot of email marketing, where an email should have a single, clear, unambiguous declarative call to action. And every time you add an extra call to action in there, and again, you have the same call to action over and over, because that's the same single uni-mobile decision. But if you say, either request a demo or download a, you know, this white paper, or come over here and sign up for the product, you're going to have very, very poor response rates, because you're forcing them to do something that's cognitively difficult.
And the most likely response to a cognitively difficult set of tasks is to just do nothing, because it requires the least amount of thinking. And again, it goes back as well to, you know, would you like to have a demo? Well, now I have to both decide, how do I feel about getting a demo? And am I actually going to get the demo?
You know, so even a single call to action can actually force a branching narrative and a branching decision logic in someone's head. Don't ask them how they feel. Tell them what they're going to do. You know, again, this is why really extremely clear declarative statements tend to really outperform things that require them to, you know, think about what they feel or think about what they know or think about what they want.
Don't tell them what, you know, don't ask them what they won't tell them what they want. And, you know, so you can really turn performance ads into mush if you're, you know, if you're not careful. Appreciate that, I can't help but answer the question for you. So, so we talked about some of the limitations of performance ads, brands has had the same limitations.
So one is brands, brand ads work on the 95% who are not actively, who are not actively in market, which means that, you know, you, you know, a lot of your expenditure is about future income, not current income. But the other thing is they actually work, and there's really good data on this. They work as well for the 5% who are in market, but they're typically not as good as a good CTA based performance ad. So, you know, even if you have a pure brand ad and someone's actively in market, then I will do a reasonably good job of triggering someone to go deeper.
But it's not really going to give you the top level performance of, you know, you telling them exactly what they need to do next, that a good, good CTA based performance that we'll do. But the other problem with brand ads is that because they're primarily acting on future buyers, we don't know when those future buyers are going to come and market. And the longer it is before they come and market, the more likely it is they will have forgotten. You know, so those brand memory associations decay over time, and they have to be refreshed with, you know, with ongoing reach.
So, you know, there's no such thing as sort of, you know, we're going to reach our entire ICP over the next two years. That's not a thing. You know, you have to do always on marketing, you know, cycling back and refreshing those memories. And one of the things about population-wide memory decay is that it follows an exponential process.
So, it's really almost like radioactive decay. There's a half-life. So, there will be some, you know, for your particular product category and your particular ad, there will be some point in the time where 50% of the people that saw that ad and formed a memory will have forgotten that memory. And that time can be very, very short.
You know, so there are studies for things like low consideration, fast-moving consumer goods, buying a brand, you know, buying a stick of butter in the store. You know, the memory duration for that brand can be a day or two or even a few hours for very high consideration goods, buying a car, buying a CRM, buying an ERP system. Those memory associations can last longer. But, you know, even for a fairly high consideration, be to be good, it's typically not beyond eight to 12 weeks.
And you just don't have a memory. Now, that memory can still be triggered. You know, if you show them the original ad again, but you know, they are likely, you know, if you showed someone your ad for your CRM six months ago, and now they're in market today, six months later, chances are you will not come to mind. You know, that someone who's ad they saw more recently will come to mind or some CRM that they maybe used in their last job, that will come to mind because those are more durable memories.
So, you know, so the other aspect about brand versus performance ads here is that a brand ad has to reference the products that there's something to form an association with. Again, humans are really bad at remembering isolated facts. That's why, you know, none of us do well at spelling bees. What we're good at is remembering the association between two things that are related.
And, you know, and so for that brand ad to work, we need an association between the distinctive branding elements and the product category. And one of the things that the product itself, you know, a picture of the product, a description of the product in some way, this very brief can do is it can act as a proxy for the underlying product category. And ideally, you would also like some sort of point of differentiation if there is one for, you know, again, how your product is not like the other products. So, you know, you could have, say, a CRM for medical practices, you know, and, you know, and it's the medical CRM, you know, so now you've got a product association directly in the name or the CRM when you have to have HIPAA compliance.
And the right people will know what that means. And, you know, and you've got both a category association and a, you know, point of differentiation, you know, all in a very brief sort of under two and a half or three second message. The dealer performance ads is this is where they really need, one, they have to contain distinctive key assets, distinctive brand assets, because part of what you want the performance had to do is to trigger the recall of the prior brand memories. This is the idea of aided recall.
And so even when we have forgotten something, we will, if we had remembered it once, we're still carrying a latent memory that can be triggered by essentially representing the same stimulus. So again, humans are very Pavlovian. You know, the, you know, the dog hears the bell ring and remembers that every time the bell rang, you know, they were fed and so they start salivating because they expect to be fed immediately. Humans are Pavlovian dogs.
But what it means is we have to, to represent the same stimulus that triggered the original memory formation. If we present a complete difference, and this is one of the reasons, for instance, why, why, you know, rebranding is essentially the equivalent of giving all of your future buyers a traumatic brain injury. You know, that you've essentially wiped out all of the investment you made in forming memory associations and you're having to start from scratch because everything that you've stuffed in their brain isn't there to be triggered anymore because you're now triggering them with something completely unrelated. And so, you know, and again, this is why you highly, highly successful brands will tend to have the same core distinct to brand assets for decades and even a century or more.
You know, again, the font, the name, the color red that we associate with Coke has been around since the 1800s. And, you know, they've not had a sudden need to change their, you know, their brand color to purple, you know, or to change their font to sans serif. You know, even if the cursive is old-fashioned, there's a lot of investment in people recognizing that cursive font. So, so again, part of the thing to think about performance ads is it's a platform to represent the distinctive brand assets so that you trigger the recall of the brand memory associations.
And that's part of why good brand marketing will increase the effectiveness of your performance ads and why bad performance ads will wipe out the value of your prior brand marketing because you've got to have this interplay between the two. I want to recap this real quick on that last slide because the performance ads we kind of talked on all the elements of what makes a good sorry, brand ad, excuse me, and it's having the product as part of a distinctive brand assets and also driving an emotional response probably oriented around a category entry point by a larger ideally speaking. So, just because we covered that a little bit before and it's one of the type of bow on that for people when we talk about what makes a good brand ad it's referencing the product. So, there's something to form that memory association.
It's having the distinctive brand assets that go with that to help differentiate your brand. And then it's also tying back to an emotional response. I usually related to a category entry point or something even around jobs to be done in the absence of a category entry point. I got a quick question from Fahad if you don't mind me.
Yeah, asking it. Fahad, I'm going to actually keen on your second question. So, Fahad is saying are you saying there are no performance ads that can also give some brand ad benefits driving both immediate action and forming memory should we give up on this idea altogether? I mean, yeah, the other part of the question there too is if a performance ad drives action won't the subsequent product usage be enough for memory formation.
Yes, product usage is a great source of memory formation. Again, any of us who've used a product every day for several years in our job, we're going to remember that for a long time. But the problem is this, again, look at B2B, we have a 15 to 20% close rate, close one rate for most companies. That means 80 or 85% of the people who saw that performance ad never had the experience of using your product because they picked someone else.
So, product usage is valuable, but you actually have to have the product usage to form the memory. The other thing is that there's a lot of talk about wanting to do combo brand in performance. I can see the idea of the efficiency of being able to do that, but we have a lot of really good research data that says a good performance ad leaves no memory traces. Whether we want it to or not, it just doesn't leave a memory trace.
If that performance ad leads to product usage, it's the product usage that leaves the memory trace, not the performance ad. And again, we're doing the performance ad to have it do a specific job for us. And so we want to really have it do that job as best as it possibly can, which is to trigger an immediate physical action to advance a purchase process. It's just too much to ask everything we do to do every possible job to be done.
We really have to break these out into things that are better at doing one type of job versus another type of job.