Branding vs. Lead Generation

Branding vs. Lead Generation on a Small Ad Budget

If your company has the resources to invest in its growth, then it should be applying budgets to ad campaigns that drive awareness, build up its email list, and generate leads or sales. But what do you do when you have a tiny budget relative to your industry? Should you focus your budgets on branding or on generating leads? This dilemma is common to countless small business owners and startup founders.

Branding vs. Lead Generation

On the one hand, building a brand is an investment in the future of the company, as there’s nothing quite as valuable as having a brand. Having worked with some well-known brands, I can attest that business often just walks through the front door. However, it’s expensive to pay to repeatedly place your messaging in front of people with no expectation of an immediate return, and a small budget is not likely to get your name in front of too many of the right people.

On the other hand, generating leads is likely to generate revenue, without which you can’t keep your doors open or even pay for snacks for the office. But if you need to pay for generating every lead, you’ll never build the brand equity required to really grow your business long term.

Clearly there are ways to both generate leads and create a brand that do not require ad budgets, such as content marketing, social media and SEO. However, these tactics typically take years until they drive results, so they should be done in parallel to advertising.

Although the right choice for any business is subject to its unique circumstances, we usually recommend a 75%/25% split between lead generation and branding. The logic is as follows; if leads translate into actual revenue, then more leads means more money, and hopefully you’ll eventually have a significant budget to invest in branding. If leads in your case are app installs, free registrations or any other metric that does not drive revenue but will position your company to raise money, then this logic still holds true.

So if that’s the case, then why not put 100% of your budget into generating leads? Because if you’re able to identify the most valuable people your business needs to reach, then you can carve out a small niche of users and target them with branded campaigns. While you may not be well-known to all your potential customers, you’ll get your message in front of a small group that represents the most valuable ones. If you apply a small, but consistent budget each month towards reaching these people with both banner ads and promoted content, over time, you will position yourself and draw their attention.

Exactly how you should go about doing this requires careful planning with the guidance of someone that’s done this before, but as a general strategy, this approach makes sense for most companies trying to do a lot with a little.

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