Upon evaluation of the current state of performance marketing, it is evident that consumer brands are on a mission to maximize their digital footprint and increase conversions through innovative and efficient marketing strategies.
In addition, the economy hasn’t been fair, so, with a tight grip on budgets, brands are shifting their focus to quantification and marketing analytics, utilizing AI tools to demonstrate the financial impact of their investments.
As performance marketing converges with brand marketing, we can expect to see a new level of creativity and innovation in these spaces. The future looks bright, and the possibilities are endless. Here, we discuss the major trends driving performance marketing in 2023.
The growing number of digital touchpoints and channels that consumers use to interact with brands has increased the need for consumer brands to maximize conversions across each touchpoint. It seems like every other day, a new social media app is going viral, each of which presents an opportunity to engage audiences dynamically.
In addition, consumers may start their purchasing journey on one channel and then switch to another before making a purchase, so it’s crucial for brands to ensure that their marketing efforts are optimized for each touchpoint to drive conversions.
Because performance marketing focuses on driving specific, measurable results, such as conversions, sales, or leads, it is an ideal approach for consumer brands looking to maximize conversions across multiple digital touchpoints.
In the aftermath of COVID-19, Gartner reports that marketing budgets seem to be making a rebound, having risen to 9.5% of revenues in 2022. However, recovery is slow and has failed to hit pre-pandemic levels. While there is hope for more progress in 2023, many marketing executives are still in caution mode.
As a cautious approach, performance marketing provides more immediate and quantifiable results, making it a more attractive option for companies looking to maximize their return on investment in a challenging economic environment.
In this scenario, companies are more likely to allocate their limited marketing budget to tactics that have a direct impact on sales and revenue, while brand-building initiatives that may have a longer-term but delayed impact take the backseat (temporarily).
The trend toward performance marketing has created a high demand for professionals with skills in this area. As Wall Street Journal reports, more companies are hiring senior marketers and CMOs with experience in performance marketing and data analytics. In addition, according to a survey by Marketing Week, performance marketing (20.2%) is among the top four roles with over 20% increase in hiring.
As a performance marketer, one must have a deep understanding of digital marketing channels, such as search engines, social media, and email, and be able to use analytics and tracking tools to measure the impact of their campaigns. Because companies are now acknowledging that performance marketing is a key driver of success in the digital age, they are looking for people who can effectively leverage performance-driven approaches to achieve business goals.
The demand for performance marketers also reflects the increasing need for data-driven predictions and decision-making in marketing. Performance marketing relies heavily on data and analytics, and brands are looking for marketers and leaders who can use this data to make informed decisions and continuously optimize their campaigns. On the other hand, brand marketing, while it may have measurable reports, is geared towards more qualitative results, such as reputation management, awareness, credibility, public relations, and so on.
AI-powered tools can help companies track, analyze, and optimize their marketing efforts in real-time, providing valuable insights into consumer behavior and campaign performance. Also, AI and marketing analytics tools are now available to companies of all sizes today. Any business can automate manual processes and track performance metrics in no time. In fact, statistics show that 95% of companies now use integrate AI-powered analytics into their marketing strategy.
In recent years, brand marketing has been the dominant approach in the marketing industry, with a focus on building brand awareness and image. Even now, there remains a consistent emphasis on marketing your brand. However, with the rise of digital marketing and the increasing focus on quantifiable results, performance marketing seems to be on a path of convergence with brand marketing, rather than taking over the game entirely.
This convergence is happening as companies realize that building a strong brand is not enough on its own to drive sales and meet business objectives. On the other hand, focusing on conversion metrics to the detriment of long-term brand sustenance is not healthy.
According to Jeff Weiser, a former marketing executive at Shopify Inc., “brands won’t succeed if they “try to turn marketing exclusively into ones and zeros.” Combining the benefits of brand marketing with the data-driven approach of performance marketing creates a more holistic and effective marketing strategy.
In the end, companies must always be willing to take calculated risks and think outside the box to stay ahead of the competition. This could mean embracing emerging technologies, exploring new marketing channels, or developing unique content strategies. Ultimately, the goal is to deliver a seamless, integrated customer experience that drives results and gives customers a reason to come back.
Guy Sheetrit is the founder and CEO of Over The Top SEO. He holds broad expertise in the areas of SEO, Social Media, Digital Marketing, B2B, B2C Brand Development and online lead generation. His LinkedIn is Guy Sheetrit.