A growing share of the marketing budget is managed according to the principles of targeted-performance marketing: personalised messages, direct impact measurement at the level of individual users, near-time optimisation, and partial automation. This is especially true for digital marketing activities that drive conversion and purchase. But what about the media spend focused on the earlier stages of the consumer’s decision journey, such as brand awareness, including traditional media or “mid- and upper-funnel” portions of digital marketing? While these investments often account for more than 50 percent of the marketing budget, they are managed with far less rigor than online spending.
CFOs are especially skeptical regarding the output of existing approaches. In a recent McKinsey survey, 45 percent of CFOs said the reason marketing proposals had been declined or not fully funded in the past was that they didn’t demonstrate a clear line to value, and 40 percent didn’t think marketing investments should be protected during a downturn.
Data-driven performance marketing, however, can now be applied much more effectively to branding and demand-generation activities. With a clearer understanding of consumer preferences and behaviour at the early stages of their buying journey, companies report marketing efficiency gains of up to 30 percent and incremental top-line growth of up to 10 percent without increasing the marketing budget. On average, the impact is significantly higher than that of established marketing ROI (MROI) methods for branding activities.
This precision in branding is particularly crucial now as companies manage the effects of Covid-19 on the early stages of the consumer’s decision journey. While much is still unknown, we believe that data-driven performance marketing will give marketers an edge when it comes to reaching their target groups efficiently during and after the pandemic. In a consumer survey conducted in the UK in June 2020, findings revealed that 71 percent of UK consumers have reportedly tried a new shopping behavior with 37 percent of respondents admitting to having switched their “go-to” brands due to Covid-19. As these habits further evolve, granular data analysis and disciplined marketing-performance management will be essential for brands to stay in touch with their customers and drive MROI.