This article will help you understand the difference between transactional and non-transactional or brand building advertisement 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 come in.
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.
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You know, even though I knew these different types, I never had them explained to me as well as you just did. Thanks for that and this is a very impressive site. I got a lot from reading this and think I have some better insight to what I want to do now. Thanks again and I appreciate the work you have done here.
Blessings ~ Frank
I agree that building a Brand is extremely important to the overall success of an online business. Developing that relationship and trust with customers gives you credibility within your niche and allows you to offer more value to them.
I know a lot of people try to build a brand within Social Media, but what do you suggest as one of the easiest ways to get started building your brand (for the beginner)? YouTube? Facebook Ads? Etc?
We would say get on Instagram and start cultivating a loyal following who loves your brand. This is the most efficient way to really separate yourself from your competitions.
That was a great presentation of the two different kinds of advertising. I have a wholesale business and I think brand building ads would be best to get those repeat customers. It all depends on what you are looking for. I appreciate the examples and information that shows how any business can determine what type of advertising they want or need. Thank you for this article!
For me, it is more important to have long-term customer because just like you said that with transactional ads we might get sale but it is not repetitive as with brand. Do you think that Pinterest is good source of targeted traffic and does it have high conversion rate or Facebook is better?
We think it depends on what target demographic your after.
Brandable ads should be the focus of any online business to ensure your reach can have some power behind it. Can transactional ads be a great way to begin building that brand if you make a lasting impression with your ad? In other words could your Trans ad have a theme to them to give them branding power? Or is it just two total different entities?
If you could give an example of a brand ad what would it be? and what would the best way to implement it?
Thanks for sharing,
Shannon
Brand Building Advertising can be something like having a large social media audience. Or something like A large billboard in LA or NYC Or A Major Press Release with Major Publications.
Very good and interesting post, which made me think about how I want my business.
It seems very nice to have the immediately cash flow and get that money, but indeed however, if they don’t come back and this continues for a long while, in the end there will be less people, and less money.
So I prefer to not earn money at first, build my brand, and earn good money after that while helping people.
Thanks for sharing this post!
By the way, which one do you prefer?
We think both are necessary for any business and it depends on the business model and goals. What we find most businesses overlook and don’t take serious is brand building so a great way to really separate yourself from your competition is to make brand building a priority.
Well before today I didnt know what a transactional ad was, heck I hadnt even heard of them before. I think you are right that through time our business should experience both. Of course however building a brand is by far the most important as that brand could very well carry you over a lifetime with your business.
Thank you for this article and for me a teaching session.
Dale