It’s Time to Outperform Performance Marketing.
In the advertising industry, we tend to measure what’s easy. But just because something can be measured more easily, doesn’t mean it performs.
The past two decades have been a golden age for advertising technology. This time has given rise to mainstream digital advertising, programmatic, trading desks, data, performance marketing, metrics, analytics and a myriad of other tools designed to drive effectiveness. But during this period of technological innovation, these sugar-coated, short-term activations have narrowed our focus, causing advertising effectiveness, creativity, and long-term brand building to fall desperately short.
For too long, there’s been too much focus on building better hunting traps when nobody wants to feel hunted. Pop-unders, spam, interruption, click-bait, fake news, data abuse, media fraud, and so many more tactics have led to the glut of advertising that goes mostly unnoticed, which is leading to ineffectiveness, waste, and brand erosion.
At the heart of this narrow, short term thinking is ‘performance marketing’. I need to tip my hat to the inventor of such an expression because no single phrase or definition has been so unsettling yet so popular as ‘performance marketing’. Perhaps Charles Vallance of VCCP defined it best when he said “In one masterstroke of linguistic land grab, not only did this genius establish the unshakable performance of narrow media, but they also tactically undermined the credibility of broad brand-building media such as TV, posters, radio, print, and cinema. Reducing them, implicitly, to the status of non-performance media.”
The appeal of digital media is obvious, and every marketer has felt the lure. The seemingly budget-friendly solutions allow brands to connect with the right audience at the right time with a host of spectacular metrics and optimization techniques.
While always seductive, the results are invariably diminishing. The average click-through rate for Google Ad Display Network is a dismal 0.46%. In the ’90s, the average click-through rate was 2.4% (Center for Interactive Advertising). Data from Adobe Digital Insights states internet users think they’re more likely to see a relevant ad on TV than online. Pardon? What happened to targeting, personas, and programmatic. Perhaps it’s that people don’t see ads online anymore. Google even estimates that 50% of all mobile clicks are accidental. But these stats get significantly worse when you consider bots generate 52% of all web traffic. That’s right. More bots are now surfing the web than humans. With an inversion in traffic like this, can we even trust the metrics anymore? And with metrics continuing to decline, is there even a point in measuring performance?
Despite all of this, we continue to see marketers spend more and more on digital. Performance marketing is not a silver bullet unless, of course, you’re an ad tech vendor, in which case performance marketing has undoubtedly helped performance. The ISBA reports media agencies are charging 40% for agency fees, tech fees, and an ‘unknown delta’ for every dollar you spend — “Our study shows that even in a ‘disclosed’ programmatic model, around one-third of supply chain costs remain undisclosed. This ‘unknown delta’ averaged 15% of the advertisers spend.”
For a long time, this golden age of advertising technology has swung the pendulum away from emotional, brand-focused marketing. While it is coming back slowly, the focus needs to be on developing a bold strategy and brave creativity that ignites the right side of the brain to engage people and make an impact.
The problem isn’t digital; it’s the balance between tactical and brand. Digital, or performance marketing, has merely been the tactical sugar that has addicted so many of us to the platform as we continue to chase diminishing returns looking for that next sweet fix. Even the most functional and rational products and services cannot survive on the sugar rush of performance marketing alone.
I applaud P&G for being one of the first, and unfortunately, few brands, to have recognized a number of these trends and re-focused their spend on brand. Marc Pritchard, the Chief Brand Officer of P&G, described this as the ‘Crap Trap,’ where “Too much of our advertising is unwanted, uninteresting, uninspiring, and therefore ineffective.” With that, P&G opted for a course correction back in 2017 and pulled $200M out of their digital ad spend. What happened? They increased their reach by over 10%.
As we’ve tried to short-cut our way to success, we’ve overlooked one of the most exciting and powerful things about modern media — how all of its aspects can work together. It’s exciting to think about the endless possibilities digital puts at our fingertips; tactical performance marketing is just one. As marketers, we must continuously ask ourselves what value a person will get out of an interaction with our brand. I’m not sure this is happening enough. When we do this, we look to the opportunities of data, and the interconnectedness digital brings to even traditional media. For this reason, we see more and more digital, and .com brands embrace TV, Out of Home and other traditional brand-building formats as they move ever so slightly away from performance marketing.
Some brands are doing this very well. Led by Donkey’s brought social media posts to the forefront in out of home media placements that would highlight and give prominence to posts that may have otherwise disappeared in the sea of trolls. Adidas, having thrived through a couple of Google Ad words outages, realized they were chasing sales they would have had anyway. Ultimately this led them to a complete digital overhaul. Spotify has done a tremendous job bringing their data to life in local out of home campaigns that could feel intrusive if done online but feel right at home publicly displayed in your neighbourhood. Black & Abroad’s Go Back to Africa, and German Rail’s Discover Germany campaigns are shining examples of using data and AI to speak to people emotionally, rather than merely stalking them online.
As many brands look to come out of economic lock-down, I encourage you to put your brand first and focus on rebooting your digital strategy. Brands will need to continue to invest in new capabilities (e-commerce, customer experience, social shopping) to serve customers in a new reality. The idea, however, of investing in performance marketing is absurd. It’s time to think of digital as value-creating, not cost-cutting.
In our new reality, brands will still matter. Brand familiarity, or the mental, physical and digital availability of your brand will still matter. Brand impact will still matter. Most definitely, brand purpose and what your brand stands for will still matter. And above all, creativity matters.
The only short cut to brand value is with an investment in impactful creativity. As Fernando Machado, the CMO of Burger King says, “When we do something like Moldy hopper or Whopper Detour, we do it with the intent that the idea is so powerful it triggers a dollar multiplier effect on the media plan. I don’t need to invest millions of dollars to achieve the desired effect, that is the beauty of creativity.” This approach sounds like what performance marketing should really be.
Now is the time to define what your brand stands for and to follow through with brave creativity so that your brand doesn’t fall into the ‘crap trap’. When you stand for something and put everything you have behind it, your people, employees, customers, and shareholders will be behind you. If you sit on the fence, in the middle, that’s when other brands are going to take your space.
When it has become all too easy to see the worst of outcomes, isn’t it time to ask, What’s the best that can happen?™
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Published by Mike Leslie, Partner, President at Full Punch
A creative problem solver with a penchant for strategy and analytics, Mike is the President, Partner at Full Punch. Always calling Vancouver home, he has spent the majority of his career working throughout the Pacific Northwest, California and all across Canada managing small and large agencies, local and national brands. His experience brings unique insights to the entire marketing process.
Originally published at fullpunch.com on June 18, 2020.
