What does the future of performance marketing look like?
If you go onto Amazon or Google Shopping and search for ‘camera’, the results tell an interesting story. In both cases all the results that are yielded on the first page use some form of digital memory storage.
You can filter the results based on zoom capability, resolution or style, but if I want to find a camera that uses a traditional 35mm film, I have to specifically search for ‘film camera’. The point being that at some point since the mid-nineties, when digital cameras first became affordably available at scale, digital became the default format and we lost the need for the ‘digital’ prefix when discussing cameras.
Summit speculates on how to capture customers’ attention and grow market share
Digital marketing is now just marketing
The same can now be said of media. The marketing industry has spent the best part of the last 10-15 years arguing about traditional v digital media and which is best.
However, now in 2021, the majority of advertising that is purchased by brands is planned, executed and measured digitally; the decline in traditional TV viewing is being offset by growth in digital video consumption across YouTube, Facebook and other VOD (video on demand) platforms, according to Ebiquity’s Mind The Gap 2020 report.
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Sky AdSmart offers the ability to purchase TV ad slots programmatically and target them at specific audiences, OOH (out of home) media has shifted from posters to digital screens and the majority of news content is now consumed online (Ofcom News Consumption report 2020). All of which raises questions about the future of advertising in 2021 and beyond.
Parallel to the debate about traditional v digital media has been the debate about balancing long-term brand building with short-term sales activation (led by Les Binet and Peter Field with the outstanding The Long And The Short of It).
One thing we can be fairly certain about is that the pressure from chief financial officers and senior management to drive immediate returns on marketing investment won’t subside, so regardless of whether the ‘digital’ in marketing becomes second nature, there will always be a role for performance marketing; bottom of funnel, sales driving marketing activity that drives a measurable ROI. But how will this evolve in a post-digital world?
The performance mindset
The rise of new digital channels created a raft of specialist skills required to deliver campaigns via different platforms, and people with these skills started specialist agencies.
However, as technology increasingly automates these skills (for example, Facebook have significantly reduced the targeting and optimization options in their ad platform, with more decisions being made by algorithms), the skills required of marketers to implement campaigns will shift to those activities that are harder to automate.
Skills such as setting strategic objectives, creativity and integrated channel planning will be far more sought after in the years to come. Planning, executing and measuring campaigns in a holistic way across multiple channels is still a utopia that few brands have achieved due to the walled gardens of data that exist at the big ad platforms.
So solving the challenge of robust multi-touchpoint attribution will be top of mind for many marketers in the years to come. Indeed, the need to align to both short- and long-term metrics could lead to ad platforms not only measuring the impact of advertising on our actions (did I view/click/purchase?), but also on our thoughts (did it make me happy/sad/excited?) – if and when the technology, and appropriate regulation, allows them to.
That kind of analytical performance mindset will permeate the entire marketing funnel, and we’ve seen in recent years that social platforms are increasingly developing solutions aimed at serving big brand marketing budgets.
Big brand creativity and a sense of purpose
Another by-product of increased automation will be a renewal of the importance of creative. Research from Data2Decisions suggests that creative execution is ten times more important than targeting in driving advertising profitability, with significant growth in digital video ad formats. But with customer attention increasingly hard to attract, the focus on creating impactful, memorable advertising will become increasingly important to brands.
As seen in many other walks of life, and increasingly pertinent as we emerge from our Covid-induced hibernation, social responsibility will form a key part of many marketing conversations in the future.
The WFA (World Federation of Marketers) recently held their (virtual) Global Marketing Week event, the themes of which were sustainability, diversity and marketing as part of the solution, highlighting how important these topics are to marketers; clearly the future of performance marketing cannot purely be about maximizing in ROI.
Campaigns and the teams that deliver them will need to be representative of a diversity of different backgrounds, data will need to only be used in responsible ways that respect customers’ privacy, and budgets should only be invested in platforms that are investing in ecologically sustainable business practices. In recent years, the campaign Stop Funding Hate has led to brands like Co-op and Center Parks withdrawing their ad budgets from publications such as The Spectator and The Daily Mail following articles deemed transphobic or homophobic.
Finally, we can be fairly certain that whatever shape performance marketing takes in the years to come, the train is unlikely to slow down any time soon. In 2020, despite store closures and minimal sales growth, retailers increased their digital advertising spend by 8.4%, spending over £3bn (eMarketer).
With so much at stake, brands, agencies, publishers and technology firms will continue to speculate and innovate in a desperate attempt to capture customers’ attention, drive that next purchase and grow market share. Regardless of where those innovations take us, they will so obviously be digital that we won’t need to say it.
To hear more from Summit about the future of performance marketing, join their next Summit webinar, Brand vs Performance Marketing: Frenemies for Life, at 11am on June 17.
Darren Wright is product strategy director at Summit Media.
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