Where now for “Performance Marketing”?
In chats with other marketers over the last few years, a common theme has cropped up: “performance marketing” is changing. One question is, should we even think of it as a singular practice anymore, given all marketing is performance marketing?
What is “performance marketing”? Strictly speaking, it’s the practice of paid or brand marketing where the affiliate or marketing agency only gets paid when you get a sale or a lead, i.e. when they perform and get measurable results.
When marketing agencies see their main responsibility as “performance marketing”—the part of marketing where the sales or the leads are tracked—and assess their value based on how many sales or leads they get, it can lead to tunnel vision. They can end up focusing on results and only what gets results.
However, as we all know, that’s not all there is to marketing. Other marketing won’t generate sales but it’s hugely valuable in building awareness and establishing brand, trust, and value—all things that contribute to whether or not someone ultimately clicks “Add to Cart” and checks out or performs another measurable action that results in a lead.
The value in top funnel performance—that of building trust and brand equity and alignment—is equally, if not more important, than just simply driving sales.
Let’s look at two elements that can cause inaccuracies in what you are measuring and ultimately throw off other valuable marketing practices, such as the work done before a lead or sale is generated.
To a lot of marketers, “attribution” is a dirty word. It can distract from other valuable marketing work. I recently had lunch with a colleague who was saying he pretty much gave up working for an agency because he seemed to be spending most of his time explaining what attribution is, why it matters, and why clients’ numbers were always so different depending where they looked.
In a nutshell, attribution is the practice of taking a sale or a lead or whatever you are looking for and attributing it to a piece of marketing/advertising. Someone clicks on your ad, buys your product—your ad generated a sale. Easy! But is that the full story?
What if before the person clicked on your ad, they read a post by an influencer that drove them to look at your product but not actually pay for it. Which one of these two do you give the money to for the “performance”? Now, these are just two touchpoints. It’s conceivable that there are multiple touchpoints, all with varying degrees of value and success. If you are only focused on performance—just leads and sales—how do you tell which one is the most effective and which one to reward?
This is often where people can tie themselves up in knots. When we look at the various advertising platforms they will have different and sometimes multiple attribution models. This means that each platform can quite literally be taking credit for the same singular result. This is not necessarily bad. In all likelihood, they did all contribute. But if you are paying for “performance” you will end up paying multiple times for the same sale.
Is there a better way?
Ultimately, the better practice is to accept that users will have multiple touchpoints before purchasing and look further at the value of each touchpoint. You can do this in many ways, such as trying to create micro-conversions for touchpoints that are possibly higher up the funnel. Or you can map the touchpoints with software that records each touchpoint and when it happened. Google’s multi-channel funnels attempt to do this and there are plenty of others on the market that you can use. However, these are not flawless systems and how well they actually map the journey is debatable.
Ultimately, attributing sales to a single piece of marketing is flawed, and dividing it up amongst multiple ones makes no sense. How do you know which piece had the biggest influence?
- Brand Equity
When you are very focused on achieving a particular goal, you can sometimes become a bit blinkered in your approach. With performance marketing, you can become equally blinkered in focusing on just the sale or the lead. However, what pushes someone to actually cross the line is very different to what can actually convince them to purchase your product?
Here’s an example. I recently attended a webinar given by a digital marketer that gave a worked example of a “marketing funnel.” In it they explained they were looking for a gadget to give away at a conference they were going to. They had done lots of research on the various gadgets in the vertical before eventually deciding on buying the market leader. They positioned the research and the back and forth as the complete funnel.
However, I’d question whether it really was. After all, they bought the market leading product. It’s doubtful that they had never heard of it before they started their research. So was what they were presenting the entire funnel? Or should we go back and determine how much they were influenced by the instant recognition and equity already built up in the market leader?
The truth is, brands like Apple, Nike and lululemon spend a lot of money advertising their brand because it builds trust. As much as performance marketing builds sales, trust is unlikely to be part of the mix. However, sacrificing performance for trust is a mistake. You ultimately commoditise your product and lessen your impact.
No one is expecting you to run out and start buying billboards in Time Square or paying for Super Bowl commercials to build brand equity for your product. But there are things you can do to build brand equity and also assess how well you are reaching your audience.
For example, this article you are reading (well done for getting this far by the way), is in some ways an exercise in building trust with our audience. We’re not trying to sell anything but we want to show you that we understand and care about changes in the marketing landscape. How will we tell if this type of content marketing “performs”? Well, we’ll see how many people read it. It’s possible to measure brand awareness pieces online. All marketing performs, just differently. So why do we insist on splitting out one type of performance for another? The performance of top funnel marketing activities, such as building trust and brand equity, is hugely important to generating sales and leads.
Ultimately there is always a place for purely driving sales, and traditionally “performance marketing” has focused on that area of the funnel. However, being too focused could very likely come back and bite you in the end. By taking the approach that all marketing is performance marketing, you can enjoy a more holistic view of what works and and on what scale, and better understand all of the marketing that contributes to your sales and leads.
At Binary & Co we don’t just look at the things that drive sales. We look at the things that drive people. Understanding what motivates and drives people is what marketing is about and if you want your marketing to perform that’s where the real focus should be.