‘Performance’ marketing success story seeks long-term brand growth

In 2023, revenue began to plateau for multi purpose cleaning company Koh, after relying entirely on ‘performance’, sales-driven marketing. But the company has changed its approach as it eyes long-term growth.

Multi purpose cleaning company Koh has unveiled its first TV advertisement

Multipurpose cleaning product company Koh has moved approximately 10 per cent of its marketing budget into building brand awareness after going all-in on performance, sales-driven marketing since the company was founded eight years ago.

The budget has been put towards building the Koh brand, which includes the company’s first TV advertisement, which will air on screens across the country from 11 February.

Approximately a year ago, sales on Koh’s social media channels (where the vast majority of its performance marketing budget was spent) started to plateau.

The performance-led marketing approach had served the ­Australian-born company well until then, helping the business reach $40m in revenue in 2021. Koh says it has since managed to sustain revenues with its marketing ­activities.

A combination of factors influenced stagnating growth, including rising competition amid an increasingly saturated eco cleaning market, kerbed consumer spending and higher costs to advertise on social media platforms.

It was at this point, Koh’s chief executive Charli Walters, and head of brand, Siobhan O’Brien, identified the need to start building a brand that both existing and future customers could connect with in the long term across a more diverse range of channels.

“The inherent issue that comes off the back of being on that one channel for so long is that you are talking to the customer in a very bottom-of-funnel, transactional way,” Ms Walters told The Growth Agenda. “What that means over time is that you don’t have a huge amount of brand distinctiveness, you become very product-led.”

Charli Walters, chief executive, Koh

However, the duo also needed to embark on a year-long campaign of their own within the business to make the case to invest in building the Koh brand.

Making short-term sacrifices to play the long-term brand game resulted in “some very challenging conversations” within the business, Ms Walters said.

“Even still, it’s a really gradual process,” Ms O’Brien added.

“Ultimately performance [marketing] is a drug. And so many businesses are essentially hooked on it. And everyone knows that for performance, you’re buying your customers. The more you feed the beast, the more you can get out of it, theoretically. But obviously, that is no longer the case as much.”

For Ms Walters and Ms O’Brien, much of the past year has been dedicated to setting the foundations for company’s marketing and communications in order to develop the new campaign.

Koh is a product that already had a strong point of differentiation in the market as an eco multipurpose cleaner, Ms O’Brien explained, however the new brand work is about carving a “distinctive” identity.

The new TV advertisement marks the first step as part of that mission. Koh engaged independent creative agency Ouzo Studio to develop the video, which uses humour to prompt Australian couples to share cleaning duties at home.

Koh’s brand marketing pivot also comes after an explosion of new e-commerce brands were launched into the market via social media over the past decade. Like Koh, many quickly clocked multi-millions of dollars in sales using performance-led marketing tactics. However, as Koh’s efforts suggest, the pendulum appears to be swinging back towards more emotive brand campaigns, which are then served to customers across a range of channels.

Speaking of the performance marketing movement, Ms O’Brien said from the mid 2000s up until only a couple of years ago, many marketers had started to observe customers primarily through the lens of the data they collected.

Siobhan O'Brien, head of brand, Koh

“The way that we [marketers] spoke to them [customers] was that they’re a data set and we can implement incredible micro-targeting to talk to these people. And it worked for all of us. And we forgot that at the end of the day, the people that we’re talking to are humans and humans are nuanced, and they are emotional creatures. And they’re also social creatures.

“We’re coming out of that 10 year period, and so many brands are starting to realise we’re actually talking to humans, and it’s not just a data set.

“They no longer trust us as brands, they no longer trust everything that they see on their feeds.”

But it takes confidence to back the case for brand-led marketing.

Ms Walters said: “I don’t think we’ll see an immediate return. I think that would be nice, but that would be looking at it with rose coloured glasses. The realist in me sees the long-term play. I don’t think it will be this financial year.”

She added that she hopes when customers are “ripe” to convert into paying customers, the effects of the new brand campaign will kick in. “It’s all part of the bigger strategy, but it on its own is not going to be accountable for an immediate return,” she said.