As CMOs Focus on Business Results, Performance Marketing Gains Momentum

Technology has played a critical role in enabling businesses to quickly adapt to service customer needs The Chief Marketing Officer CMO responsibilities have evolved from brand and marketing to include improving business results and demonstrating returnofinvestment ROI harnessing datadriven insights and owning the customer experience There is a great opportunity for success if CMOs are more confident to partner with their CFO and CIO and seed team crosscollaboration Datadriven performance marketing demands that brands and companies redesign their marketing and media plans to focus on boosting lifetime value and customer experience The pandemic has created a spotlight on those successfully navigating through this difficult timeWhat performance marketing companies have in common isAgilityamp160 Aamp160deliberate methodology to manage and improve the way work gets done for short mid and longterm plansFlexibilityamp160amp160The ability to respond to changes quickly and efficiently It can refer to several different ideas including physical workplace employee benefits or marketing budgetsData and Technology Identification of existing or new data repositories tools and systems that provide business and customer data Data and analytics to uncover and analyze insights into segmentation buying and behavioral analysesAccording to a Gartner research study nearly 30 of marketing leaders believe the lack of agility and flexibility has negatively impacted marketing execution quotOne key element of effectively building and planning scenarios is dataquot said Lizzy Foo Kune senior director analyst for Gartner for MarketersThe performance indicators or key performance indicators KPIs must be agreed upon with crossteam collaboration With the right technology tools and infrastructure the KPIs include brand and demand generation Datadriven optimization may include creative brand awareness lift impression test results target segment delivery tactic media vehicle marketing mix product message offer unique web site visits conversions leads and salesThe Legacy Definitions of Performance MarketingThe term performance marketing has traditionally been used to refer to only digital advertising programs where advertisers pay only when a specific action occurs The digital channels include search engine marketing social media advertising sponsored content native content or affiliate marketing The specific action or key performance indicators KPIs focused on lowerfunnel metrics such as cost per impression CPM cost per click CPC cost per sale CPS or cost per lead CPLWith a new view of the entire consumer journey funnel across all digital and offline touchpoints performance marketing has been redesigned to include all marketing and media activities Brands want all media to act like digital media With this new approach all media is performance media In addition to digital this now includes TV video OOH point of care audio etc This new focus is complicated because the traditional consumer journey funnel is not representative of the complex navigation taken by today39s modern customerDemand generation or direct response marketing tends to focus on optimization of the lowerfunnel purchase metrics Datadriven performance marketing can be applied to upper mid and lowerfunnel using different key performance indicators KPIs The new performance marketing has shifted to mainstream and is no longer a digital tacticA good example of a growing category using performance marketing is the DirecttoConsumer companies they are wellpositioned within performance marketing as they are not laden with legacy infrastructure The Video Advertising Bureau VAB reported 60 new DTC brand entrants first entry to the TV marketplace in 2020 Many brands are testing linear TV earlier in their lifecycle and see an immediate impact of unique visitors increaseAccording to McKinsey quotDatadriven performance marketing however can now be applied much more effectively to branding and demandgeneration activities With a clearer understanding of consumer preferences and behavior at the early stages of their buying journey companies report marketing efficiency gains of up to 30 percent and incremental topline growth of up to 10 percent without increasing the marketing budget On average the impact is significantly higher than that of established marketing ROI MROI methods for branding activitiesquotQuick TakeawaysPerformance marketing is no longer focused on shortterm lowerfunnel metricsDatadriven performance marketing companies that are successfully navigating the pandemic have proven to be agile flexible and harness data and insights Data and Technology contribute heavily to the source of one truth A company39s culture is most important with internal partnerships at the CMOCFOCIO level The measurement plan should include the entire customer journey metrics with agreedupon KPIs Test Learn and ApplyChart above courtesy of VABClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNetamp160

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As CMOs Focus on Business Results, Performance Marketing Gains Momentum

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Wendy Arnon

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