How Marketers are Adapting to 2023’s Changes and Challenges with Performance Marketing
Richard Jones, chief revenue officer, Wunderkind
So far, the recession that many expected to emerge by now hasn’t taken place.
That’s not to say one may not occur in the coming months. But eight months ago, few predicted we’d be enjoying the economic strength we find ourselves in today. To our benefit, the steps corporate America took to prepare for a potential recession remain in place.
A big shift for marketers since the recession warnings began is placing less emphasis on brand awareness, and more on performance marketing and ROI. According to a just-released survey we conducted with retail marketing executives, 44% expect their performance marketing budgets will increase in the year ahead, more than any other category, followed closely by marketing technology budgets at 39%.
Seems logical. Companies on a recessionary footing will naturally want to focus their spending on results-driven activities that link payment to outcomes, such as performance marketing. But you don’t need a looming recession to be smarter and more efficient with your marketing investment.
Performance marketing takes priority
To use a hockey reference, it’s better to be where the puck is going rather than chasing where it is today. Anticipating consumers’ needs and offering them the right product at the right time is far more effective than spamming them with ads for products they’ve merely browsed (or worse: already bought).
That requires data (lots of it) and the ability to process that data to make confident, predictive decisions. According to the same survey:
- 77% of respondents say they’re collecting behavioral data
- 70% say they’re collecting engagement data
- 53% say they’re collecting attitudinal data
- 52% say they’re collecting personal data
That’s a good start. However, 73% admit that they can only identify between 50% to 75% of their website visitors, and a staggering 85% claim to be only moderately or slightly reliant on first-party data.
That’s a good start. However, 73% admit that they can only identify between 50% to 75% of their website visitors, and a staggering 85% claim to be only moderately or slightly reliant on first-party data.
Yet the companies that recognize and invest in owned channels — like their websites — will finish ahead of the pack a year from now. But websites can’t do all the heavy lifting by themselves. The best and most lasting performance marketing foundation is one that establishes solid interfaces between owned and paid channels, but doing so is not without its challenges.
Among the biggest frictions are:
Inefficient tech stacks
Many expressed dissatisfaction with their current tech stacks, particularly regarding customer data platforms (CDPs), customer relationship management software, marketing automation platforms, and content management systems. By integrating identity solutions, companies can recognize anonymous site visitors and enhance the intelligence and intuitiveness of their CDPs.
Ineffective ad campaigns
More than half of the companies in our survey (59%) believe that digital advertising does not improve customer knowledge, and 50% think it does not increase brand loyalty. Additionally, 44% admit that ads are not leading to increased sales.
Organizational challenges
The pandemic prompted heavy investments in technology, but it is crucial to have the right talent within the organization to fully utilize a technology’s potential. Brands often struggle to harness technology’s value, so having skilled internal teams and supportive technology partners make a big difference. Leveraging the power of artificial intelligence and machine learning alongside the right team will pave the way for long-term success.
Poor user UI
Intrusive ads can harm user experience and reduce engagement, impacting a brand’s effectiveness. A non-intrusive ad approach leads to higher attention quality, more site actions, and increased returns once users re-engage.
These factors, along with the gradual deprecation of third-party cookies, shifting consumer expectations, and tightening budgets, make the year ahead a potentially difficult one. The solution? Understanding who your customer is and what they want. That means more than just knowing their location, time spent on site, or even what website sections they visit.
It requires collecting and leveraging first-party data through owned and paid channels, which means using a platform that allows you to do both. Choosing the right platform can make the difference between capturing, converting, and keeping customers in the years to come, or not.
AI will be a game-changer for CMOs
Artificial intelligence (AI) has emerged as a pivotal force in reshaping performance marketing strategies. AI utilizes advanced algorithms and real-time data analysis to streamline and optimize campaigns, driving unprecedented results.
Supported by compelling statistics showcasing enhanced engagement and conversion rates through AI-powered personalization, along with revenue increase for adept AI implementers, the case for AI adoption in marketing becomes compelling for CMOs.
The advantages are profound: precise targeting, predictive analytics fueling optimization, and automated ad copy creation. AI isn’t a distant future anymore — it’s here. CMOs aiming to turbocharge their growth are implementing AI strategies right now.
To learn more about how marketing leaders are prioritizing their technology, budgets and partnerships to meet these challenges and more, download the 2023 CMO State of the Union from Wunderkind for free.
Credit: The Drum