Why it’s Time to Stop Saying “Performance Marketing”

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The marketing industry is littered with jargon.  This is the industry of “brand equity”, of the “call-to-action”, of “above-the-line” and “below-the-fold”.  In fact, there is so much jargon in marketing that it often feels like you need a translator to decipher the true meaning of what somebody is telling you.

Some of this jargon is useful, providing a short phrase to describe a complex practice, but on other occasions, the jargon instead adds to the complexity of what is being described.

The phrase “performance marketing” falls into the latter category. The type of marketing that it applies to is inconsistent and its definition unclear.

There are performance marketing agencies, performance marketing publications (hello!), performance marketing awards, performance marketing media channels and performance marketing roles.

Within these areas, each has their own version of what they deem to be “performance marketing”, for example, whilst two agencies may describe themselves as “performance marketing agencies” that does not necessarily mean that they provide comparable services.

Challenging the performance marketing model

Describing one area of marketing as “performance”, also leads to other challenges.  If some parts of marketing are deemed to be “performance” then what does that make all the other areas?  Is there such a thing as “non-performance marketing”, and if there is, what is the point of it?

The reality is that all marketing is performance marketing.  Businesses don’t invest millions of pounds without expecting a return from their investment.  To label specific areas “performance” is not only inaccurate but also insulting to all other areas of marketing.

The great irony is that those who most commonly position themselves under the “performance” banner, are also all too often in the areas that do the least in driving true business performance.  So much of “performance” marketing is not about delivering sales but creating the impression of delivering sales.

The great brands were not built from “performance” marketing as it is most commonly defined.  Coca-Cola wasn’t built from voucher codes, paid search didn’t establish Apple and retargeting wasn’t responsible for creating McDonald’s.  These businesses were built from a combination of great branding and great products.

Short-term versus long-term marketing

This is not to say that “performance” doesn’t have its place.  If a business needs to increase sales of a product quickly, tactics such as paid search, retargeting and voucher codes are more likely to make an immediate impact than building brand awareness.  This, however, is just one way in which marketing can drive performance.

Rather than divide into “performance” marketing and everything else, it would be more useful for the industry to start classifying the different types of marketing into short and long-term.  If a business is seeking to receive an immediate boost in sales for a product it may turn to short-term tactics such as paid search, email or retargeting.  If it is looking to increase awareness or change the perception of its brand it may look to longer-term brand building strategies.

The key to success is ensuring that you have the right mix of short and long-term tactics.  Without appropriate short-term tactics, you risk losing sales to competitors that have made themselves more visible to audiences that are in the market and ready to buy.  Without a long-term strategy, your marketing efforts will run into a point of diminishing returns where the cost of acquiring a sale is greater than the profitable value of the sale itself.

On the face of it, the measurability of marketing should have given practitioners a much stronger understanding of what works and what does not, and helped them to plan better campaigns accordingly.  Unfortunately perceived measurability often has the opposite effect, pushing advertisers towards short-term tactics when they would see greater returns by investing in a longer-term strategy.

The negative impact of the perceived measurability of marketing is heightened by marketers use of measurement models that do not accurately reflect what is responsible for driving performance.

Too many advertisers still measure the success of their digital marketing efforts by attributing one hundred percent of the value of a sale to the final click from digital media.  The result of this is not only that they focus their efforts on short-term tactics, but that they gear these tactics towards the very end of the customer journey where the reported sales are often sales they would have achieved regardless of the final marketing intervention.

Such an approach has led to an unfavourable reputation in “performance” marketing for taking the credit for other people’s work. The irony is that this sub-section of the industry now faces greater scrutiny over the true performance delivered than in any other area.

Rebranding our definitions

Marketers must also be conscious that most of the marketing is not easily measured.  How consumers learn about different brands and products, and how they determine when and where to purchase are complex and far from an exact science.  Measurement gives only an indication of what works and what doesn’t; it is rarely able to give a complete understanding.

Additionally, there is no correlation between a channel’s measurability and its impact.  A channel being less measurable does not make it less impactful.

If the industry is to continue to drive improvements in marketing effectiveness it requires a change in mentality moving away from seeing marketing in the silos of “performance” and “brand”.  Successful advertisers use a combination of short and long-term tactics and understand that achieving the right blend of these initiatives is what ultimately drives true performance.

At the risk of adding further industry jargon, I propose that marketers rebrand their definitions of marketing into “short-term” and “long-term” and consider than all marketing is performance marketing, otherwise what is the point?

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