Instead of criticising performance marketing, steal from it

This is a story about stealing, so if you disapprove of theft, turn away now. If you read on, though, you’ll learn how to:

• Steal from performance marketing’s unique ability to inspire boardroom confidence
• Steal a greater share of total business spend for marketing
• Help brands steal market share

My writing partner in crime on this stealing spree is Richard Clay, chief strategy officer at Zenith—one of the smartest, most collaborative and light-fingered media strategists you’ll have the pleasure to meet.

The power of performance

“Half my advertising spend is wasted; the trouble is, I don’t know which half.”

This oft-repeated line was first uttered in the 1920s by Lord Leverhulme (the "lever" in Unilever).

A full century later, the power of performance marketing is that it finally promises to resolve this communications conundrum, allowing businesses to spend with more certainty.

And so, even at a time of declining business confidence—over the course of the past four cycles of the annual PwC CEO Survey, confidence in the three-year outlook has dropped from 71% to 57%—performance marketing’s promise of commercial certainty has resulted in it taking an increasing share of marketing spend. A whopping 42% of major brand leaders plan to increase their spend on performance marketing this year, according to the WFA.

But there’s a big risk for marketing here: that performance marketing becomes a victim of its own success, undermining marketing as a whole.

Because while performance marketing is enjoying increased spend, total marketing budgets are actually shrinking—Warc forecasts that $20 billion is to be wiped off global adspend this year.

Why is this a problem (other than for ad agencies selfishly protecting their piece of the pie, of course)? Well, our work has shown that performance marketing, and therefore marketing as a whole, is most effective when brand and performance marketing work hand in hand.

And so, where performance marketing takes too great a share of spend, it actually reduces its effectiveness, and that of marketing as a whole.

So what should we do? Well, it might be tempting to correct the balance by knocking performance and championing brand marketing.

But this is no time to create an interdisciplinary squabble that would risk undermining fragile boardroom confidence. Instead, marketing as a whole should learn from the success of performance.

Over the past few years, we’ve identified the three ingredients in performance’s secret sauce, shamelessly stolen them for "total" marketing and seen our clients reap the rewards.

They are the three Fs: framing, frequency and forecasting.

Framing

We can all learn from performance marketing’s genius framing. "Performance" effortlessly conveys a commerciality that is missing from the names of disciplines such as "brand" and "social".

Our solution has been to name our proprietary marketing model "The Growth Engine". It focuses on the interdependence of brand and performance, which we’ve found galvanises everyone around growing marketing’s total contribution; improving collaboration and total impact.

And the data backs it up. Research by Analytic Partners shows that the greatest returns come when equity-led and performance-led advertising work in tandem. Shifting from a performance-only approach to a balanced mix can boost total revenue ROI by anywhere from 25% to 100%, with the average uplift hitting 90%. This impressive uplift is helping our clients grow sales and steal share.

Feedback

From tracking our 10,000 daily steps, to predicting a game through the lens of expected goals, we’re all increasingly thirsty for performance data.

In the boardroom, performance media has done a brilliant job of quenching that thirst. The reporting isn’t perfect, but it’s very useful, particularly because the feedback is almost immediate.

Brand marketing on the other hand has traditionally offered less frequent feedback; perhaps monthly, quarterly or even, let’s admit it, in an annual panicked rush to complete effectiveness awards entries.

We’ve shown that there’s plenty of value in leading indicators of total marketing impact—such as share of search or direct to site traffic—which can provide similarly instantaneous feedback.

As a result, more and more of our clients are bringing these metrics into what were previously their performance dashboards to give themselves, and the wider business, a view of the total impact of our work "live". We can now see whether a campaign is hitting brand and performance benchmarks, and flex for success, from week one.

Forecasting

If you can forecast credibly, you can build confidence and grow investment. Performance marketing has made forecasting commercial impact a USP, but we’ve shown you can extend that strength to all marketing.

Clients often run robust backwards-facing econometrics models to analyse marketing’s historic contribution. We flip this, point them forward and forecast the total impact of different comms scenarios. We’ve seen this give businesses greater confidence to invest in total marketing.

This is obviously useful in a stable environment, but we’ve found it even more powerful amidst volatility, where we can adjust for changes in things like demand and pricing, to give forecasts greater credibility.

Where marketing has previously been a go-to area for cutting spend in uncertain times, we’re now seeing it hold and even steal share of business investment, delivering higher returns.

Time to steal with pride

As you can probably tell by now, we’re all for theft. So please do go ahead and steal from our approach. Steal what makes performance marketing powerful, steal share of business spend and, ultimately, steal that all-important share of market.

Josh Bullmore is chief strategy officer at Leo Burnett UK and Richard Clay is chief strategy officer at Zenith