Brand marketing is a long-term strategy where marketers focus on building and strengthening relationships with their customers by remaining at the top of their minds—especially during the consideration phase of their buying journey.
In a tech-driven world, filled with AI, bots, and algorithms, consumers are crying out for a little human touch.
So, on the surface, it’s easy to see why a brand-led marketing approach—favoring soft, relationship-driven—sense to many CMOs.
The problem is your stakeholders can’t wait for long-term results. Especially when those results can’t be attributed to any specific activity, action, or campaign.
Stakeholders want cold, hard, data-driven activity that proves performance in monetary terms.
“Once upon a time, the onus was on measuring your impact. It was a combination of reporting on likes, followers, and who is sharing your content, etc. But now, we’re getting a top-down push. Leadership are saying, ‘We need to see, in dollars and cents, the effect your activity is having on our corporate objectives and on our bottom line revenues.’” (Darryl Praill, CMO of Agorapulse)
Impressions, likes, shares and other engagement statistics are useful, but they’re filled with questions and concerns. They’re too flaky and wishy-washy for the logical minds of CFOs, investors, and the board.
They want factual evidence that explains exactly how you and your team are tracking towards company objectives and impacting the bottom line.
“I wasn’t ever asked to talk about churn, CAC, LTV, or revenue per channel, or asked to justify budget earlier on in my career,” says Lisa Sharapata, CMO of The Arbinger Institute. “But times have changed and those are table stakes now. I’m asked those questions in pretty much every conversation with the leadership team and the board.”
“We have investors or the CFO coming to us on a regular basis, and they’re saying, ‘What is the lifetime value of that customer? What are the customer acquisition costs, by channel, social media event, content, etc.?’” says Darryl Praill. “These are conversations I didn’t have five or ten years ago. But I’m having them now.”
But there are undeniable challenges with performance marketing that could explain why lots of CMOs are running scared. After all, 50% of CMOs struggle to prove marketing’s impact on ROI.
Performance marketing challenge #1: The sunsetting of third-party cookies
The removal of third-party cookie data will affect just about every marketing strategy, regardless of whether it’s brand-led, or performance-based. But the impact on performance-based strategies, particularly, is going to be colossal.
“The attribution and tracking of performance marketing continues to dwindle. With the automation of tools, marketers have less and less control and visibility over campaign learnings. Whereas target groups used to be very transparent, the possibilities have been limited due to data protection updates and platform changes.” (Theres Dickmeis, FOND OF)
Many performance-based tactics–like retargeting or display ads, for example–rely on third-party cookie data to:
- Target specific audiences
- Run specialized campaigns
- Assess the effectiveness of activity
Performance marketing challenge #2: What to measure when you can’t measure everything
Not everything can be tracked and measured.
With the dark social network set to become even darker, how do you measure the performance of your activity on private channels or in one-to-one conversations?
“It’s hard to do sometimes,” says Lisa Sharapata. “Attribution models are always a hot topic of conversation, but you just can’t capture everything.”
Performance marketing challenge #3: Fear of retribution
Historically, CMOs were never assessed by performance. It was impossible to measure intangible results like an increase in trust or brand awareness.
And it still is.
Therefore, some CMOs might feel blindsided, unsettled, or even a little defensive by this “sudden” move toward performance marketing. They have a number over their heads, and they don’t know how to reach it, or why they need to.
“I’ve heard plenty of CMOs say, ‘My job is all about brand and brand awareness. That is my goal. To measure me is to impede me. It’s to hold me back. It’s saying you don’t understand what I do.’” (Darryl Praill)
CMOs have been thrown into the spotlight and asked to justify themselves, their decisions, and their actions, almost overnight.
They’re having to approach what they do in a completely different way. They don‘t know the lingo. They don’t know how to harness the data. They don’t know how to give stakeholders what they want: They don’t know what they’re doing. And when you’re heading up a whole department of people, that’s a scary place to be.
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Performance marketing challenge #4. Losing brand awareness
If we neglect brand awareness campaigns and prioritize performance-based activities instead, where will that leave us in the long term?
Every person we touch with a marketing message has the potential to become a customer. So if we don’t keep working hard to get our messages out there, how will we reach our future customers?
All those challenges are valid concerns and are good reasons to be wary of performance marketing.
But these days, spending big chunks of budget on traditional brand-building campaigns and activities without knowing if they’re bringing customers into the business are mainly reserved for the big players who have so much budget, they don’t need to justify every cent they spend.
But what about us, the average Joe? Our main focus always has to be on the bottom line, right?
“The CMO must now prove that they’re driving revenue. Say you’re the head of marketing for a laundry detergent. It’s no longer enough to simply say, ‘Look, we increased the number of likes by 1%.’ You actually have to show that you drove an increase of $10.2 million in revenue because of what you did. And that’s completely different to what we’re used to with traditional brand marketing.” (Darryl Praill)
We need to be effective, but visibly so: We need to be profitable.
Performance marketing allows us to be visually effective by putting the control into our own hands.
That fact–plus a volatile economy, access to more data, and a move towards direct-to-consumer sales–explains why more and more CMOs are starting to increase their performance marketing spend, while they pull back on their brand marketing investment.
So it seems like performance marketing is here to stay.
But is it?
“Is performance marketing a trend? Is it a momentary reaction to the economy versus a fundamental shift in the modern-day marketers role to a modern-day CMO’s role?” (Darryl Praill)
Time to find out! Download a free copy of Performance Marketing: Why & How to Shift From a Brand Marketer to a Successful Performance Marketer to learn more.