Transactional VS. Brand Building Ads

For a small or new business, the world of advertising can seem murky and expensive.

Jargon-filled articles that focus on large-scale ad campaigns feel like a burden rather than a help. However, if you understand a few things about the two basic ad types and their functions, it becomes easier to plan and manage advertising for your business.

This article will help you understand the difference between transactional and non-transactional or brand building ads and what type of results to expect from each.

Defining Transactional & Brand Building Ads

In a nutshell, transactional ads are more about the short game of immediate purchases and cash flow, and brand building ads are more about the long game of building name recognition and acquiring long-term customers. Both have their own power, so let’s dig into those definitions a little with examples to better understand how they fit into your business. 

Transactional Ads

The goal of transactional ads is for customers to have an immediate action or interaction with your business. With these ads, you are trying to get customers to exchange money for goods and services in a relatively short period of time.

An easy way to visualize this is to think about online ads. You place an ad online, a customer clicks on the ad that redirects your website or product page, and (hopefully) that leads to an immediate purchase or a short trip down the conversion funnel.

Online resources like email campaigns, display ads, and social media lend themselves well to transactional advertising. With these ads, it’s easy to see results with clicks or bumps in sales.

The tricky part about transactional ads is that you may get a sale, but that doesn’t mean you’ll get repeat customers. And continually chasing new customers is more expensive than doing business with return customers. That’s where branding and brand building ads come in.

Brand Building Ads

The goal of brand building ads is to build recognition and reputation for your business. These ads aren’t asking customers to purchase up front, rather they “ask” customers to remember your name, services, or products when they have a need.

A good way to visualize this is to think about plumbing (yes, plumbing). You don’t need a plumber everyday, so there’s almost no reason to respond to any sort of transactional ad. But when you have a plumbing emergency, you don’t want to take the time to research plumbers. What you do instead is call the first company you can think of. Since you’ve seen billboards, print ads, and logo-ed vans for “John Smith’s Plumbing” for years, that’s the business you remember and call.

Traditional advertising methods like billboards, television, and radio lend themselves well to branding advertising. With each ad, you can tell parts of the story about your company and how it benefits the customer. Of course, being successful with brand building ads means having a good understanding of your market, customer, company goals, and company persona before you get started. Learn more about what branding can do for your company here.

The tricky part of brand building ads is that it’s harder to track the immediate impact. It can feel like your ad investments aren’t working if you’re not seeing an immediate bump in your numbers. Instead, payoff from good branding comes much further down the road. As your return customers build, you won’t need to spend as much on transactional ads to help inject cash into your business — you will already be the go-to business in the minds of your customers when they have a need.

The Bottom Line

Every business will probably have transactional ads through the lifetime of the company. After all, there are always sales to advertise and potential new customers to reach. But if you make a plan to build your brand over time, you will eventually have a customer base that won’t need transactional ads to woo them toward your products or services. Because of branding, these repeat customers already interact with — and perhaps even love — your company without extra incentives. This means that in the long-term you will likely work and spend less on transactional advertising as your business (and bottom line) grows.

Stay tuned to Blip to learn more about branding basics and how to use transactional ads and brand building ads in your business.