At a recent performance marketing event, there was one statement that was repeated by almost every brand and client in the networking hours and on stage, on the day, which was, "we've maxed out our performance marketing.”
I left feeling shocked. Had all these brands really hit the peak of what performance marketing can deliver? I’m going to say no and outline three reasons why you might be wrong.
1. You need to up your technology game
The technologies you use to power your digital experiences, such as your product feeds, landing pages, load speeds, audience data, website hosting and app, are all amplifiers of your performance marketing budget. Your performance with product listing ads (PLAs) will never be competitive if your product feed (the list of products that Google uses to build product adverts) doesn’t meet Google’s guidelines.
Not only will your technology let you down when it comes to conversion rate, but it directly affects your ability to compete in the auctions and algorithms that identify what brand should win the sale.
Improvement of these technologies is as much a part of performance marketing as the advertising itself. Your website experience and its load speed are great places to start. Not only does load speed have a very strong direct correlation with your conversion rate but it also dramatically impacts brand experience. Google provides a series of free tools to help you test it yourself, with automated recommendations on what should be focused on to see immediate improvements.
Ensure your performance marketing team have as much of a focus on this as they do on optimising your ads. Integrate your performance and development teams to start identifying entirely new opportunities.
Challenger brands are very effective at integrating their technologies and data into their marketing. One of the main benefits of a challenger brand is they don’t have a reliance on legacy systems, which can complicate this process. Unless you give it the same level of attention, you’re probably not competing on a level playing field.
2. Move beyond sales
Performance marketing isn’t only a way of harvesting people looking to purchase. It’s an approach to measurement and optimisation that can be applied to any stage of the customer journey. Maximise activity higher in the marketing funnel, or past the point of purchase by optimising performance towards different, but still highly measurable KPIs.
For example, could you use paid search and programmatic to improve customer retention? Or custom audiences to target past customers next time they are in the inspiration phase? Turn existing customers into engaged community members? Perhaps start by thinking about how you are turning your web experience from being a conversion journey into a brand community.
Don’t just wait for customers to come back into the market after the point of purchase. Give them a reason to spend more time with your brand and it will inevitably open the door to greater engagement and improved targeting. This could be with inspirational content, ambassador programmes, social engagement, forums or community pages, online or offline events, competitions - the list goes on.
When this type of activity is live, you can use custom audiences (very easy to set up in Google Analytics) to build more granular buckets of customers based on very specific collections of behaviours. This is vital in moving your performance marketing away from just driving a sale and towards other actions, such as improving retention or lifetime value.
Challenge your performance marketing teams to move beyond sales and devise ways to optimise conversion rate, lifetime value and retention.
3. You're hitting the limits of what your current team can achieve, not what is possible
Almost anyone can deliver performance marketing. Give them a day and a few guides and they will be getting ads live in no time. A few days later and they will be at a point when they can't improve your return on ad spend (ROAS).
Now, the experts will find a huge number of ways to drive greater efficiencies. Are you using audiences? Introduce more granular audiences based on content consumption, or engagement with live chat, or past purchases. Layer in demographics or geolocation data. Combine all of these, as the more granular you're targeting the greater impact on results.
Moving beyond just the media buying, could we personalise the landing pages for these audiences, or pull in third-party reviews or leverage machine learning? The options are infinite.
It might look like we're all just running pay-per-click, but your continuing success hinges on avoiding plateauing (which can be a challenge for everyone, but particularly when in-housing). Has your team tested everything, or have they ran out of ideas?
The brands that will increasingly dominate in performance marketing are those that are constantly looking for marginal and increasingly granular gains in their creative, targeting, optimisation and experiences. This is what challenger brands such as Farfetch and Monzo do so well.
Have you realised every marginal gain possible and hit the peak of performance marketing? Or is it just a plateau, needing a refreshed focus to identify new areas of growth? Onwards and upwards.