Marketing has never been easy, but inflation is forcing most CMOs to do more with less and make the most of limited budgets without sacrificing results. I am. Now more than ever, a marketer needs to spend wisely and achieve his KPIs in the most cost-effective way possible.
But more than a third of consumer goods marketers are unsure whether trade spending is being allocated properly, citing John Wanamaker's classic quote. The problem is, we don't know which half is which.
For more certainty, we asked marketers in our recent Spending Survey where and how they're spending to achieve their goals. We find that marketers are still investing equally in the top and bottom of the funnel, but are trading traditional channels for shiny new performance tools that promise to engage and motivate consumers at scale. .
However, not all performance marketing strategies are created equal.
(Re)defining performance marketing
Early in my career, I was part of the Whole Foods Global Marketing team where we developed some of the first performance marketing programs, including the first card-linked offer. Even in the early days, these programs were true pay-for-performance solutions, where retailers only spent money if they drove desired customer behavior.
These programs were also measured using direct, definitive purchase data rather than inferred or modeled behavior. As a data-driven person who subscribes to the philosophy of “buy what you can measure and measure what you can buy,” I felt that the goalability of these campaigns compared to other marketing tactics available at the time. I loved gender and measurability. Ability to measure incrementality through A/B testing.
All of these programs attracted new customers and encouraged continued loyalty. The performance solution was powerful.
A marketer's primary goal is to drive sales growth, not impressions, clicks, or even brand awareness. These actions can lead to sales, but they can also put you out of business (Blockbuster, Hostess, Toys R Us, etc.) even if you have strong brand recognition.
Impressions are meaningless unless they lead to actual sales. It baffles me that marketers continue to aggressively invest in top-of-funnel strategies before exhausting smarter, more effective performing options. This is why many pay-per-click platforms try to position themselves as performance marketers, even though they can't guarantee sales.
Digital entrepreneur, marketing storyteller and adventure seeker. Living my story means turning passion into a profession and dreams into plans. I'm the CEO of my own life.
