Over the break, I instantly stopped scrolling at the headline: Is your brand stuck on the performance plateau?
It was a juicy and thought-provoking read from the mind of Tom Roach, a brilliant marketing strategist with over 20 years of experience working with some of the world's biggest brands.
While I haven't got 20 years under my belt, I have seen this happen multiple times with clients who expect performance marketing to be a silver bullet for every business problem.
Apple didn't become 'Apple' because of performance marketing. It built its technological grip on society by creating game-changing products. The products instantly sold themselves!
While starting as a performance UGC brand, Koala mattresses are focusing on branding with television ads to deliver that additional reach, brand affiliation and loyalty (The TVC, by the way, is fantastic).
What is a performance marketing plateau?
Dr Grace Kite - a well-respected economist - has argued that brands that only focus on performance marketing are not using digital media to its full potential.
She has done research using econometric models on various digitally-focused brands and found that taking a more balanced marketing approach can generate better results in the long term.
The great thing about this model is that it supports an older one.
In 2013 Binet and Field Advertising Effectiveness research called 'The long and the short of it'. It, in summary, said the same thing: While providing short-term growth, sales activation campaigns fail to build sustainable long-term sales.
Sounds familiar to Dr Gracie Kite's plateau.
Why do brands continue to think this way?
I believe it's because they are used to an environment where performance marketing has been their sole focus, despite the evidence that suggests a more balanced approach is needed. Brands expect instant results and for those results to be attributed easily. They forget that brands need to be built over time and require creativity and innovation to succeed. Performance marketing can't do this alone.
So, what can brands do?
While we at Shaun Polidano Consulting love - and are very good at - performance marketing, brands must consider balancing it with product development, audience segmentation and brand building to go beyond the plateau.
Continue to spend time evolving your product or service:
The most challenging and resource-intensive part of your business. Product development means constantly innovating and improving the product or service for your customers.
For example, if you're selling a mattress, creating an innovative pillow, expanding into couches or advancing how mattresses are made - whether that is being more environmentally friendly or even better to sleep on - it allows your brand to stay top of mind and relevant to customers.
Build a vast audience segmentation framework:
When brands think of audience segmentation, they think of small, targeted, narrow groups of customers. While they are correct, the critical difference here is that you should have several audience segments that build up to the mass reach you are striving for.
When you segment your audience, your brand can tailor messages, features, pricing, visuals, and even products that best resonate with their demographics and psychographics — instantly increasing your marketing engagement and ROAS.
At a minimum, assign 30% of your budget to brand-building activities:
Run a test; I dare you. Move 30% of your performance budget into brand building and start to see the benefits of increased conversions, brand recognition and higher ad engagement.
People connect with brands and the stories they tell. While brand building takes time and money, the data above shows that when people connect with brands, brand sales or leads increase. So why not give it a go and begin to move past the performance marketing plateau.
My final notes.
Performance marketing will always be on your media plan or channel strategy. However, it’s not enough on its own. Brands must be agile and blend short-term and long-term strategies to build a brand and achieve growth.
That’s where I come in.
My team and I can help you create a plan that works for your business and leads to the growth you’re striving for.
Reach out today and let's work together to achieve your next level of success.