COVID-19 has changed the ways consumers interact with the world around them, forcing brand and performance marketers alike to adjust their marketing strategies and demonstrate agility in responding to changing consumer needs. Unlike the ’08-’09 financial crisis in which traditional ad dollars began shifting online, digital ad dollars already represent over 50% of overall ad spend. This time around, the big shift will come from marketers reallocating ad dollars to more measurable channels. As marketing budgets shrink in the face of economic uncertainty, the pressure to drive a positive return on ad spend has never been more critical.
Reevaluate your objectives and define desired outcomes.
Now is a prime time for marketers to reassess the KPIs that matter most to their changing business objectives and identify the most cost-effective channels for achieving those goals. During a time of crisis, an awareness campaign that humanizes your brand can act as valuable brand-building tool. If you’re seeking to drive down-funnel actions, performance-based platforms and partners will help you to de-risk ad spend and get the most bang for your marketing buck.
While the marketing function has historically been viewed as a cost center, performance marketing and the ecosystem around it are shifting the narrative to one focused on business growth. Held accountable to driving meaningful outcomes, performance marketers deliver against specific actions that ensure advertisers see positive ROI.
According to the IAB, 62.9% of advertising revenues were priced on a performance basis in 2019, and 34% of US agency and brand buy-side decision-makers plan to increase their performance messaging strategy as a direct result of COVID-19.
Move billable actions further down the marketing funnel
In recent years there has been a noticeable trend in performance marketing away from top-of-funnel conversions, like clicks and installs, towards “deeper funnel” billable actions, like a sale or paying customer. This shift in mindset is bringing the vast potential of performance partnerships to the forefront, helping advertisers realize that performance is about driving strong lifetime value and customer loyalty, not just fulfilling short-term goals. Even as marketing budgets shrink in the face of economic uncertainty, performance marketing remains a reliable channel for driving customer acquisition and overall growth.
When the billable action is moved further down the funnel, there is less focus on short-term wins and more opportunity to grow long-lasting partnerships. Transparency across advertisers, publishers, and enablement partners is key for growing strategic performance partnerships that drive measurable results. Advertisers should be willing to share proprietary performance data to identify which consumer cohorts are converting and help publishers optimize toward quality, scale, and customer lifetime value.
Implement reliable mechanisms for measurement and tracking
With brands cutting, pausing, and shifting ad spending, measurement and tracking are becoming more important than ever in helping marketers to prove out the value of their investments. Attribution is often an issue for traditional channels like linear TV, and digital channels measured on clicks and impressions do little to reveal the actual impact of dollars spent. For advertisers seeking to drive and measure meaningful outcomes, performance marketing partnerships allow for real-time tracking across channels and devices.
Advertisers can leverage performance partnerships to connect with consumers during the discovery and awareness phase, when they’re making a purchase, and after the point of conversion for ongoing customer engagement. An entire ecosystem of performance-oriented, measurement platforms has emerged over the past five years, making the adoption of a performance-first approach far easier to implement than the period following the last major crisis.
Develop programs for driving loyalty and long-term value
For brands striving to maintain relevance during this period, the notion of “customer-centricity” is crucial. Advertisers are no longer looking at performance marketing efforts as an opportunity to monetize immediately, but rather as a channel to establish a direct relationship with prospective and existing customers. A key benefit of that relationship is the first-party data that can be procured, and with it, the opportunity to support long-term personalization and CRM marketing efforts. Insights into purchase decisions and down-funnel actions are invaluable in identifying and responding to consumers’ needs no matter where they are in the customer journey.
While consumer spending across categories may be down, this is a great time to launch a loyalty program to build relationships and remind consumers that your brand will be there when they’re ready to engage. With consumers spending more time on their mobile devices than ever before, SMS and push notifications will also become important tools for reengaging customers with relevant messaging. As performance marketing practices continue to evolve, advertisers will need to look ‘beyond the banner’ to connect consumers with the products and services that provide real value, foster brand loyalty, and ultimately drive positive ROI.