Issue 7 of Marketing for early-stage startups
Marketing is increasingly data-driven, which is good. But it’s worth keeping in mind that building a brand and selling products are two different tasks. An ad with a great discount will, in the short term, lead to more sales, but it may not be positive for your business long-term. It’s important not only to measure the immediate conversion, but also to keep your brand image in mind and think about the long-term effects of all your communication.
How do you measure how much your brand is worth? Usually brand equity is measured by looking at how much more a consumer is willing to pay for a branded product than a non-branded one. If we have invested successfully in our brand, we can charge more for our product.
If you have a free app, you can still test your brand equity. You can run an ad with a branded message in parallel with an unbranded one and compare the results. You can also test advertising in a market where your brand is known vs a new market. Examples of metrics to compare:
Conversion rate of landing pages
Click-through rate (CTR) of ads
Cost per action, for example per install
Investing in your brand will likely lead to better numbers. Other benefits of a strong brand is that it’s easier to get media coverage, to recruit and keep talent, and to get funding.