You will have heard the phrase ‘content is king’; I am a firm believer that ‘performance marketing is still King’. You only have to look at Moonpig.com as an example of how a digital platform business with performance marketing at the heart has been able to float on the UK stock market.
Performance is much more than just running some media activity in the digital space. It’s very much a mind-set, a cultural trait and an ethos that demands agility and delivers accountability. Covid has forced brands to re-think, pivoting rapidly to an increased share of wallet across from OOH and cinema, into online platforms and in particular, more ROI driven environments where online intent has skyrocketed. Naturally, this has opened up competition and increased attention on performance marketing tactics, with many retailers having to rapidly adopt performance tactics they have not utilised before.
A good example of this is Paco Rabanne and Carolina Herrera fragrance specialist, Puig, venturing into direct-to-consumer service for customers when the shops that were deemed non-essential closed. They had to find a way of promoting their offering through their social channels (performance marketing) and offered samples to be sent to consumers’ homes. The increased importance of digital marketing as a whole has unsurprisingly brought performance marketing more into the spotlight than ever before.
But does everyone value performance marketing?
Sentiment around the value of performance marketing has oscillated in recent times with some brands. For instance, Airbnb announced reductions in performance marketing spend in favour of a permanent shift to brand and PR. Airbnb now has incredibly strong global recognition, and by retaining 95% of 2019 traffic after cutting their performance budget by 58%, it’s fair to question whether they need to spend unlimited amounts to outdo competitors in performance marketing.
However, the market context cannot be ignored, and in a year where the travel sector was at an all time low due to Covid, we can imagine that competition in the performance space was too at an all time low. As the market recovers and new competitors enter the space, it’s reasonable to assume that Airbnb will have to bring performance back into the spotlight. No vertical is immune from disruption, and 2020 proved that we must be agile in the marketing world and find customers where they are – no matter what part of the funnel that may be.
How can we make the most of performance marketing?
The most agnostic among us believe that labels around performance or brand marketing are not as isolated as they seem – brand marketing too can be performance-based with measurable outcomes. By keeping the spotlight on incrementality and driving profitable revenue, leading advertisers will invest into channels and tactics that will drive their bottom line, rather than being bogged down by labels. Whilst the question of ‘do we need performance marketing?’ may well be asked, when we have more validation around brand awareness tactics, this can also be viewed in the opposite direction. Improvements in measurement and attribution will also help us question if we’re doing performance marketing in the optimal way, and where we can increase investment to drive this profitable revenue.
It is our performance ethos, mind-set and culture that is so valuable to all aspects of the consumer journey – from brand building to re-engagement. Our statistical rigor and relentless focus on data and measurement are becoming increasingly valuable and sought after in the world of full funnel. Clients crave ways to illustrate the value upper funnel tactics are driving their business, something performance marketers consider in every click.
Performance marketing teams both sit on valuable data for planning and, through activation, can invest in collection of valuable data for future re-engagement strategies. Performance is under the spotlight, not simply due to the growing ad spend on acquisition, but more importantly, it’s role in longer term brand building, where traditional touchpoints no longer reach the target.
Performance marketing teams are evolving from being solely focussed on activation, into hybrid roles. Roles where they are also contributing to the overall media planning process and working with mar-tech specialists, for example to extract value from CRM integration projects. Performance marketers are increasingly expected to be experts on all parts of digital, being able to consult with clients, understanding their specific challenges and providing not only the best performance marketing strategy for their business, but also providing solutions from technology and measurement, to creative and audience. The days of performance implementation teams are a thing of the past and the knowledge and skills of performance marketers are being put under the spotlight.
Onto the demise of third-party data…
The much-debated demise of the third-party cookie, as well as new enforcement from Apple on its App Tracking Transparency Framework, has led to performance marketing hitting headlines both within and outside the industry. Businesses are relying on their performance marketing teams to guide them through the death of the cookie, finding novel ways to identify and engage their potential customer base without it. While scrutiny on the morality and ethics of utilising and sharing customer data, as well as responses from the industries big players such as Google and Facebook, are making performance marketing a hot topic for experts and lay people alike.
As the marketing landscape evolves, whether through increased privacy measures in regards to customer data, consumer behaviour post pandemic, or through brands refusing to segment their brand and performance marketing so starkly – it’s safe to say that performance marketing will remain very much in the spotlight.
Stop putting performance in a corner. The learnings, insights and data gleaned from performance is a fuel for your business. Marketing departments will benefit from greater alignment between branding and performance.