---
title: "SMEs: Don't Build a Brand and Die, Build a Brand and Die?"
description: "This article uses data from the National Advertising Research Institute's top 100 case studies to prove that brand building is an art that reduces trust costs and increases transaction premiums, while traffic is just a tactic. It argues that SMEs should adopt a dual-wheel strategy of brand and traffic, with a recommended initial budget ratio of 3:7 for brand versus traffic, and provides examples like Ulike, ibaby, and Daily Black Chocolate to illustrate the benefits."
author: "陆星集"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2022-04-14"
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# SMEs: Don't Build a Brand and Die, Build a Brand and Die?

> This article uses data from the National Advertising Research Institute's top 100 case studies to prove that brand building is an art that reduces trust costs and increases transaction premiums, while traffic is just a tactic. It argues that SMEs should adopt a dual-wheel strategy of brand and traffic, with a recommended initial budget ratio of 3:7 for brand versus traffic, and provides examples like Ulike, ibaby, and Daily Black Chocolate to illustrate the benefits.

> Introduction:
> Before the internet, many people liked to treat marketing as an "art."
> After the internet, because of measurable ROI, traffic, and data, people tend to see marketing as a "technology."
Hence, this article uses data to prove the "value of art." The art of brand is the way (Tao), while the technology of traffic is just a tactic (Shu). Without the way, only tactics, you often become a worker for the platform!
The essence of brand art is to reduce trust costs and increase transaction premiums, but building brand trust requires a scientific methodology. Referring to the following successful cases and experience summaries, it's not difficult for SMEs to do branding well!
**Buy public domain or do private domain traffic?**
**Without heart domain, how can there be sustained traffic!**
Traffic is expensive and scarce, so the logic of business changes from continuous customer acquisition to enhancing repurchase, from rough traffic purchase to fine operation. Not only public domain customer acquisition + private domain operation, but also the creation of heart domain traffic.
The pain of exhausted traffic dividends requires brand breakthrough to improve conversion and premium, but the real difficulty is for SMEs.
After traffic becomes less and more expensive, big brands still have brand momentum built over years to rely on, and can sustain repurchase through the brand inertia of many old customers. However, SMEs on e-commerce platforms have long existed in the form of "goods finding people," relying on traffic + promotions to support sales.
"White label" means your brand momentum is almost zero. Thus, you basically have no possibility of being "purchased by name." When consumers have category needs, they won't think of you immediately, so once traffic becomes expensive and promotions weaken, you face decline. Therefore, if SMEs don't build their brand in the future, the mortality rate will increase significantly.
Some people think that building a brand is too difficult, so it's better to rely on creating hit products, which can bring both fame and fortune.
But in fact, SMEs can occasionally create hit products, but because our manufacturing is too strong, unless you make chips or lithography machines, for mass consumer goods, a new product will be imitated within 3 months at most and become involution within 6 months. So small and medium brands cannot rely on one or two hit products to build a moat.
Some also say that brand building has large investment, slow results, and complex paths, so SMEs not building a brand is waiting to die, and building a brand is committing suicide.
Indeed, the sales brought by brand are long-term, but the path is long and the effect is slow. Therefore, the author does not recommend SMEs to switch completely from traffic tactics to brand tactics immediately.
Abruptly giving up traffic is like suddenly stopping medication; you don't die from stopping the medication, but from the withdrawal symptoms.
In fact, **whether big brands or small and medium brands, they should rely on both brand building and traffic operation, "walking on two legs"** . What we will discuss next is based on the latest top 100 case studies released by the National Advertising Research Institute, digging out the scientific laws of marketing from statistical data rather than subjective imagination.
**Brand and performance can be synergistic, with a golden ratio of 3:7**
If it weren't for the top 100 case studies recently released by the National Advertising Research Institute, this article couldn't have been written.
It is precisely because of a large amount of data that we can discover that many advanced SMEs already have practical operations of "traffic + brand dual-wheel drive," and the attribution analysis of these practical data is the core element guiding SMEs on how to transition to dual-wheel drive.
The SMEs we refer to here are roughly a group with annual sales of 100 million as the lower limit and 1 billion as the upper limit.
Let's first state a conclusion: based on the author's analysis of multiple cases, we can know a rough ratio—for small and medium-sized online brands (e-commerce brands) switching from pure traffic to brand + traffic, **setting the first stage as a 3:7 ratio of brand investment to traffic purchase is a reasonable arrangement.**
Some may ask, is this data made up by you? The answer is: no, it's calculated from a large amount of case data on the four key steps of marketing: customer acquisition, conversion, leveraging resources, and price support.
First, let's talk about customer acquisition.
New customer conversion is a complex process, but there is an index that can intuitively reflect the effect of customer acquisition, and that is search. Search is "heartbeat."
Whether it's public domain search like Baidu, private domain search like WeChat, or on-site search on Taobao/Tmall, it's a behavior that directly shows consumers' active purchase intention for a brand or category.
So linking brand investment with active search index is a very intuitive display of whether new customers have been pulled.
Ulike is a leading brand in the home optical hair removal device field, the pioneer of home ice-point hair removal, but before 2021, this brand basically had no brand-side investment, making it a typical traffic-driven e-commerce brand.
There are many competitors in this category, but no real "brand," so consumers used to search with the generic term "hair removal device."
In January 2021, Ulike began to try advertising on Focus Media.
This year's advertising was divided into 4 waves, and we will analyze the differences between waves later. Here, let's first talk about a more intuitive result—after Focus Media advertising, from the Tmall backend search index, Ulike's precise brand word searches on Taobao in covered cities increased by 120% month-on-month.
△ Focus Media covered cities' Taobao search increased by 120% month-on-month
What is a "precise brand word"? It means consumers start searching for keywords with the brand name like "Ulike hair removal device," "ice-point hair removal," "Ulike ice-point hair removal device," whereas before, users in this category only searched for "hair removal device" without any brand name.
The moment users go from searching "hair removal device" to actively searching "Ulike hair removal device," Ulike becomes a public brand and starts to have its own brand traffic pool!
Ulike founder Pan Yuping said at the National Brand Rise Forum: Ulike initially mainly invested in online platforms like Alimama, Douyin, Xiaohongshu, WeChat, etc. Later, we found that traffic costs were getting higher and higher, and these ads were all **traffic-driving ads; you invest and you get transactions, you don't invest and you don't get transactions. It's always goods finding people.**
So when did we discover that people start finding goods? **After Focus Media advertising, we clearly saw that brand-related keywords like Ulike hair removal device, ice-point hair removal, Ulike ice-point hair removal device underwent earth-shaking changes! At this time, it's people finding goods**—users come to find Ulike!
To prove the effect of brand investment on customer acquisition, I decided to study a more segmented and niche category—baby sleeping bags.
ibaby is such a brand that has never done brand advertising, so it's basically unknown. In this ultra-niche track of baby sleeping bags, ibaby initially ranked only sixth or seventh, but in the second half of 2021, it invested 30 million in Focus Media to build the brand.
I extracted some data from January to June 2020. During this period, ibaby had no brand investment, and its search volume was 260,000 less than the then-leading brand.
From July 2020 when it started advertising to December, the data shows that the number of people searching for ibaby exceeded the largest competitor by 140,000. This is just a single dimension—specifically, the number of searches for its flagship store went from 30,000 before advertising to 138,000 after advertising, and its Tmall "brand search index" increased by more than 240% in half a year. This is "named search," a significant differentiated data point between brand investment and traffic purchase.
But relying solely on search for customer acquisition is not enough; we also need to study how much traffic purchase and channel preparation the brand arranged for brand investment to undertake the effect of brand conversion improvement, so that we can finally derive a scientific ratio. So we also need to study—conversion rate.
Conversion rate can be said to be the most important core indicator of marketing, but it's not a single data point.
When investing in traffic, how many people click, add to cart, follow, favorite, order, etc., all reflect the process from customer acquisition to conversion. At the same time, we should also understand that **conversion is a series of funnels, and conversion rate has the most core impact on sales and profit. Today, as companies' advertising skills continue to improve, brand awareness and recognition have the greatest impact on conversion rate.**
Daily Black Chocolate is a new consumer brand that has risen in recent years. It targets a precise niche track, focusing on dark chocolate. Subsequently, major international brands also strongly promoted dark chocolate. To increase its market share in dark chocolate, Daily Black Chocolate launched "Oat Milk Dark Chocolate" on Tmall's Little Black Box on September 15, 2021, and for the first time carried out brand advertising, focusing on Focus Media for brand breakthrough and detonation.
It can be seen that Daily Black Chocolate's focused period on Focus Media was from September to November 2021, basically from the preheating period of Double 11 to the end of the Double 11 white-hot battle.
To distinguish the effects of brand investment and traffic purchase, we chose to study its free traffic after Focus Media advertising, while the comparison brands are international brands with strong brand momentum and long history in the minds of consumers in this track, basically belonging to large groups.
Data shows that after intensive Focus Media advertising in September and October 2021, Daily Black Chocolate's free traffic ratio gradually approached and exceeded international brands, and its active search volume also surpassed international brands.
The increase in consumers' active search means the brand's customer acquisition effect is obvious. Subsequently, due to the significant improvement in awareness and recognition, its conversion rate is also very obvious. With a large influx of new customers, the store conversion rate also greatly improved. After just 2 months of brand detonation, Daily Black Chocolate topped the Tmall Double 11 dark chocolate category sales championship, with total online sales across all channels increasing by 350% year-on-year.
This is a very difficult achievement. Against the background of the "chocolate" market tending to negative growth, Daily Black Chocolate used Focus Media's detonation to break the brand into hundreds of millions of mainstream consumers and solidified people's recognition of this new category—a new generation of healthy chocolate.
The chocolate market is slowing because the public believes high-sugar foods are unhealthy. Daily Black Chocolate's counter-cyclical growth is due to, first, establishing the health concept of "dark chocolate with no white sugar, no milk, only oat milk" as a new species, and second, relying on Focus Media's brand detonation to quickly write the product advantage into the minds of urban mainstream consumers.
In this sense, Daily Black Chocolate is the Genki Forest of the chocolate world, and the latter used the same method to achieve brand detonation, with distribution and sales achieving exponential growth.
Let's go back and pay attention to the "ultra-niche brand" ibaby, which had good customer acquisition results. Facts prove that brand investment not only promotes customer acquisition but also quickly improves conversion efficiency. After advertising on Focus Media in the second half of 2020, its total revenue went from a gap of nearly 10 million yuan behind competitors in the first half to surpassing competitors by nearly 60 million yuan in the second half. At the same time, average order value increased by 15.7%, average CTR increased by 27.6%, and average UV value increased by 50%.
The general manager of ibaby said something very interesting—**brand investment is a way to reach consumers on a large scale and also the method that makes ROI the highest.**
Ulike's data is more representative. Before 2021, although its product strength was outstanding, its flagship store's visitor volume and conversion rate were less than half of competitors.
In January 2021, Ulike launched Focus Media's brand detonation. In February, a low season, its flagship store's visitor count had already surpassed competitors by 75%, and transaction amount surpassed by 16%.
So Ulike continued to invest in Focus Media, and the effect further improved. During the 2021 38 Festival peak season, Ulike's visitor count was 2.3 times that of the second place, and transaction amount was 2.2 times; during the 618 promotion, Ulike became the double champion of JD.com and Tmall in the hair removal device category, and became the only beauty device brand to enter Tmall's beauty category Top 10 during 618.
By the end of that year, Ulike's online sales exceeded twice the sales of brands ranked 2-10 in that category, becoming the only hair removal device that most consumers would "purchase by name." Its revenue broke through from 1 billion to 2.5 billion, even exceeding the definition of "SME."
Compared to aspects like customer acquisition and conversion that can be directly reflected by numbers, brand investment is even more crucial for whether a brand can leverage resources in a snowball effect.
In this era, the only thing not lacking is goods and production capacity; everything else is scarce, such as traffic, attention, head anchor slots, and golden resources for various promotions (like Tmall's Little Black Box launch, Super Brand Day) are even scarcer.
The strength of brand momentum is an important factor determining the flow of resources. If you are a strong brand, various resources naturally gravitate toward you.
Only with momentum can there be benefits. Partners are usually very snobbish; everyone hopes to increase their chances of success through your success.
The aforementioned ibaby is an ultra-niche category. Through the endorsement effect and data surge brought by continuous investment on Focus Media, it eventually attracted the attention of Meione Company, where Li Jiaqi is, and was selected to enter Li Jiaqi's live stream; at the same time, Liu Tao, the official selection officer of Juhuasuan, also chose to endorse it.
These top resources prefer ibaby, importantly because ibaby pioneered constant-temperature sleeping bags. This brand differentiation has been deeply rooted in people's minds through Focus Media's detonation, with good data and low risk of failure.
With the assistance of big anchors like Li Jiaqi, ibaby became the TOP1 in the sleeping bag category on the first day of Tmall Double 11, with daily sales exceeding 100,000 pieces, a year-on-year increase of 500%; during the entire Double 11, sales exceeded 200,000 pieces; its national sales from August to November exceeded 400,000 pieces, with sales exceeding 100 million yuan in just four months, achieving a leap in brand scale.
Brand detonation has a significant impact on the flow of top resources.
For example, the aforementioned Daily Black Chocolate not only secured live streams with Li Jiaqi and Luo Yonghao but also obtained the ultra-scarce promotion resource of Tmall Juhuasuan's "Brand Star," and various co-branding opportunities were too many to count—partnering with female boutique fitness studio SUPERMODELFIT, launching a 2021 co-branded mooncake gift box with OATLY, and even leveraging McDonald's McCafé to launch a co-branded product...
This is a typical case where brand resources snowball and grow bigger and bigger, and the driving force for the snowball to keep rolling is the power of the brand.
Moreover, the combined investment of brand + traffic usually brings an increase in gross margin and firm prices, while pure traffic, seeding, and other tactics will definitely bring a decline in gross margin and an increase in discount level (i.e., a decrease in actual transaction price).
Let's use data to speak—after Daily Black Chocolate's Focus Media advertising, gross margin increased from 49% to 58%, an increase of nearly 20%.
Daily Black Chocolate founder Zhou Yu believes: **Brand investment has two important measurement standards: traffic initiative + pricing initiative. Traffic initiative is reflected in the improvement of natural search and free traffic, and more and more channels actively want to cooperate with us. Pricing initiative is reflected in the improvement of market pricing ability and gross margin, as well as the reduction of costs with partners.**
Therefore, whether a brand's investment is effective, the gross margin index is very important.
Another example is a children's home furnishing brand—Black & White Tone. Starting in July 2021, Black & White Tone focused on the back-to-school season, using Focus Media to frequently detonate in major cities nationwide.
The author found that before advertising, in June 2021, its average order value was mainly in the 2,000 yuan range, while its Focus Media advertising used its high-end products with an average price of around 4,000 yuan.
This move ultimately increased its average order value to the 3,000 yuan range during advertising, and within just 30 days of advertising, its transaction index surpassed the main competitor by 55%, and average order value exceeded competitors by 61%. Through the overall brand detonation in the second half of the year, against the backdrop of a declining market, Black & White Tone achieved a doubling of sales.
Pure traffic investment can drive sales, but traffic investment generally must be accompanied by discounts to maximize effect. Only the combination of brand + traffic can strongly support average order value while improving efficiency. This is because only brand detonation can penetrate the consumer's mind's "blood-brain barrier," changing consumers' perception and cognition of brand momentum, raising the bottom line of promotions, and allowing high-margin products to win more choices.
**Misconceptions and Anti-misconceptions**
Although it has been fully demonstrated that the dual-wheel drive of brand + traffic has obvious mental and economic value for the leap and breakout of small and medium brands, the author still emphasizes that this is the result of attribution analysis of multiple case data rather than a single indicator.
First, although we listed four major elements: customer acquisition, conversion, resource introduction, and price support, not all brand investments can bring simultaneous improvement in these four indicators, and it also needs to be combined with the characteristics of the product and brand.
For example, Black & White Tone is children's furniture, a typical high average order value + low-frequency product, with a very targeted customer group. So from the overall data, its customer acquisition effect only improved by 10%, but payment conversion rate increased by 77.5%, average order value significantly increased, and transaction amount increased by 314%.
At the same time, brand investment has a certain lag effect. Take the aforementioned Ulike, which shone brightly. During its advertising test in February 2021, there was some customer acquisition effect, but it couldn't recover costs that month. However, the combination of brand advertising and the 38 Festival marketing showed obvious improvement. Subsequently, to achieve the climax of 618, the brand invested in two more waves of brand advertising on Focus Media in April and May, and the result was a "downpour" during 618—that is, as mentioned earlier, "Tmall 6·18 beauty device sales champion, entering the beauty top ten."
We often like to say that brand investment is the air force, while promotions, channel distribution, and traffic investment are the army. Among these, **many brands easily fall into a misconception: calculating the achievements of the air force and the army separately, comparing whose customer acquisition ROI is higher.**
But in fact, the value of the air force and the army is synergy. It's like a recent war. Although due to one side's economic tension, the air force and precision-guided weapons were used sparingly, making the war not end as quickly as expected, if the air force hadn't paralyzed the opponent's radar and command system at the beginning, there wouldn't have been the subsequent ground offensive that, although slow, progressed positively.
Similarly, brand investment is also the air force, but mastering synergy is a long learning process.
For example, in the past, brand detonation was difficult to coordinate with traffic offensives, but now it can be coordinated. For instance, in ibaby's advertising, the first step was to use the precise advertising system jointly developed by Focus Media and Alibaba—Tianguan Smart Investment—to select communities with high concentration of maternal and infant potential customers. Then, the second step was to flow the building data back to Tmall Data Bank, conduct secondary analysis on users who had seen Focus Media ads in the data bank, and select potential customers for secondary reach of Tmall traffic.
Without mastering the crucial "precise building selection + data return + secondary retargeting," it wouldn't have been possible to bring sales to 200 million yuan that year with very limited brand investment, rising from seventh to first in the children's sleeping bag category.
Similarly, during the brand investment process, you may feel that recruitment, finding partners, negotiating co-branding, and finding offline distributors all go smoothly, but can you directly attribute this to brand investment? Maybe, maybe not. But if you get used to and learn to analyze with the methodology of brand momentum and consumer mind, you will feel the huge value of brand improvement to the overall situation among these gains.
For a long time, brand investment has been difficult to attribute with precise data due to its lagging effect and lack of quantification, giving it a certain "metaphysical" color. The purpose of this article is to observe the actual value of brand investment with quantified data rather than the display of phenomena.
For example, we mentioned the golden ratio of 3:7. Perhaps it's not an absolutely precise indicator, but it is a very meaningful indicator for pure e-commerce brands summarized from many successful cases. For companies with a 50:50 split between online and offline channel sales, the ratio of brand to traffic advertising should also be adjusted to 50%:50%.
In the past, companies with 100 million to 1 billion in scale could only buy traffic with all their marketing budget to survive, but they couldn't grow big or strong, had no moat, and always struggled. So they must break out with brand, because only brand breakout can bring continuous growth, and brand power is the moat to prevent involution.
As Ulike founder Pan Yuping said: "Over five years online, we spent a lot of money, but only a small number of people saw it, and an even smaller number bought it. But our half-year brand detonation on Focus Media made the mainstream population remember Ulike, and market share increased from 30% to 55%. More importantly, hundreds of millions of people saw Ulike. If you don't buy Ulike today, you remember Ulike hair removal device. When you need a hair removal device next time, you'll think of Ulike. This is the growth of brand power. **Only when the brand enters the consumer's mind is it brand equity. Otherwise, you can only spend money to buy traffic forever. Brand is about seizing consumer mind, and brand is sustained traffic.** "
From another perspective, a brand usually has 30% precise traffic, 30-40% semi-precise, and 30% not very precise. So why not invest this 30% with low return rate into brand advertising, allowing yourself to shift from traffic-driven to brand + traffic dual-wheel drive? Not only can you achieve breakout customer acquisition, promote conversion, leverage resources, and support prices, but you can also accumulate brand power and brand equity, enjoying the compound interest of time.
**Are you "watching" me?**


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