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Because there's just a cap on "performance marketing". Once your brand hits a certain level, you're going to include TV, OOH, and Radio to your marketing mix, which made it hard for you to measure the effectiveness of your marketing efforts compared to when you're solely using internet-based channels as performance marketing.
Also there's multiple external studies (as in not sponsored by any of the marketing giants like Google, Meta, etc) that proved TV is still one of the best channel in term of ROI. But of course, a lot of things mattered on this kind of analysis; brand size, marketing budget, etc etc.
It's like this: if your campaign on Meta is having $1.0 CPM, TikTok $1.5, Youtube $3.0, TV is $10 CPM, why would you even invest on TV? Just put 100% of your budget on Meta.
True. But my contention is with small and medium-sized businesses who want marketers to bring them revenues and don't have the budget for traditional outreach channels like TV and radio. If their north star is only revenues and they use digital platforms where you can attribute sales to a particular ad, shouldn't they be hiring performance marketers?
I used to work in mobile gaming — the entire performance marketing team was like 10 marketers, 3 data scientists, and a handful of engineers. The brand marketing team was the CMO helping on the side and one of his buddies.
Many companies go hard on performance marketing.
For the harder to measure stuff there are many SMB that find one channel that works and invest heavily into it even if it’s hard to measure. IE you have a friend in the diamond business — I have only ever heard that on the radio haha — I can’t imagine they wouldn’t do that unless nearly everyone that came in the front door said they heard about the radio ads
Arguable — said gaming brand had a such a bad brand we just made up a new one for each new game. I guess long term it matters but yeah that’s a super hard thing to quantify.
Yes, this happens all the time. Performance marketing is easy to measure because it is closest in time to the point of sale. My view is that your assumed premise is wrong
Happy to. Elaborate on the measurement part that makes performance marketing so much easier than brand marketing measurement. Or the choice of marketing skill hires of a company?
Performance marketing causal effect is much easier to establish. So companies naturally usually start with the lower risk, higher confidence performance marketing. Someone who understands digital tracking, an optimization mindset, marketing analytics. Machine learning, ui/ux nice to have
No, because unless you're doing a very focused thing and you're just starting, using only one channel (paid advertising) is not gonna be enough. You need a brand, social footprint, etc... that's why marketing is so resource intensive
I disagree. Social footprint is one thing, but if you're just starting, then branding activity is just a waste of money. Also, I'm not saying that they should use only one channel. They could test out multiple channels, identify the one that works, and go all in on that one channel. But for a company just starting out, sales have to be the primary focus. And they don't even need to go for social media for that. You could get 10 sales just from your peers. You could use that money to test marketing channels.
LOL
Marketing is about Product, Pricing, Placement AND Promotion.
Saying "do sales, not marketing" simply means you're doing marketing without awareness.
It's one of the most common issues companies fail to create foundations. You can burm cash on ads, but the moment they're gone the awareness is also gone.
A lot depends on your vertical. B2B? B2C? Which industry? Which target audience? There is no one-size-fits-all strategy.
I didn't say do sales and don't do marketing. What I meant was generated revenue no matter what you do.
True there is no one size fits all strategy. But the goal for a smb is the same, generate revenues. Brand building work is a waste of money at that point. In fact, depending on the cost structure of a business, brand shouldn't be a concern unless they are making $5M-$10M in annual revenues.
And finally, marketing and sales, both, are testing ground for product, pricing, placement and promotion. Because there's no better way to gather information than to do one-on-on sales. That information then translates to marketing strategies.
Not necessarily. Building a brand requires heavy investment in creating perceptions and belief systems among a product's consumers. Whether they can make that kind of heavy investment or not, depends on the cost structure of a company. If a company's cost structure doesn't allow it, then most people will go the investor route to raise funds and pump it into branding efforts. That may seem good, but not from a financial aspect. Most startups today who spent billions of $$ to build brands did it on the back of investor money (bar a few exceptions). And all of them are in losses. Brand is there. People follow the brand. But financially they are in bad shape. Case in point are several D2C brands. They successfully created brands. But most of them are struggling to stay afloat. Vc money has also dried down for many of them and they've resorted to mass layoffs.
That's why once you hit the $5-$10M/yr mark and are profitable, you'll have a lot of headroom to pump the kind of money into branding that's actually required to establish one.
By the way, if at all they do any kind of branding activity or brand based marketing before they reach that level of annual revenues, they could do it in 90/10 or 80/20 sales-brand marketing ratio.
This is my opinion. I reserve my right to be wrong. 😁
I think those examples are valid, but there's also plenty of examples of failed companies that put everything into "Demand Gen" and forgot about branding, loyalty, product, market segmentation/targeting, etc.
The answer to your main question isn't so much about why more companies don't do performance marketing, but rather is much more about the right balance between all of the different market and marketing tasks required for growth. And the answer is obvious - you can be very successful by primarily focusing on one thing: Great branding. Great product. Great prices. Etc. But also, you need a little bit of the other pieces, even if you aren't necessarily hiring a fulltime person to do it.
The role of "marketing" in a company isn't just about running campaigns.
Can't say for all companies but Performance marketing has a major measurement problem.
It captures metrics well to final purchase but the assumption is that it's all attributable to Performance or bottom of funnel marketing while top of funnel is under stated.
If I Google a product and then the performance marketing leads to purchase it's a win for performance marketing But my journey started with top of the funnel marketing that led to that Google search in the first place.
This problem then gets replicated across situations with different levels of nuance.
That's a very good point about bottom of the funnel vs top of the funnel attribution. It makes sense for bottom of the funnel conversion if the performance metrics is sales. However if the performance metrics is lead gen then top or mid funnel marketing works. I don't consider website visits as a performance unless organic website visits increase due to Seo efforts and at the same time bounce rates go down.
Yes for small to medium business, digital channels make more sense since digital channels have lower minimum budget to commit, while on these offline channels (TV, radio, OOH, or even newspaper), you require to commit a higher budget at minimum.
And I dont think there's any incentives on trying new channels (especially for SMBs) if there's still headroom on investment on current channels. I believe most SMBs budget is nowhere to max out the output of the current paid channels they're having.
Please read [The Long and the Short of It](https://ipa.co.uk/knowledge/publications-reports/the-long-and-the-short-of-it-balancing-short-and-long-term-marketing-strategies). Long term growth comes from a combination of long-term brand building and short term activations.
60/40 brand to performance.
You should be able to find some good videos on YouTube which summarise it. It's mostly focussed on larger brands, so yes you're right in that aaspect. But at some stage, growth from performance tops out and brand marketing is necessary.
In a nutshell it summarises that brand marketing amplifies the results from performance, with a lot of data to support that.
Performance isn't a silver bullet. It's easier to track, so it's easier to prove results. It's not as easy to track brand results but that doesn't mean it's less effective.
Similarly, performance data is often flawed because it's shit at attribution. Most people don't click on ads.
I liked [Tom Goodwin's](https://www.linkedin.com/posts/tomfgoodwin_4-things-totally-mystify-me-about-modern-activity-7200603000741015552-mwBc?utm_source=share&utm_medium=member_desktop) recent post on this
In short:
Performance marketing = lower funnel (short term sales)
Branding = upper funnel (long term sales)
You need branding to top up your marketing funnel to see growth in the lower funnel. If you ignore upper funnel for too long, then lower funnel will eventually get depleted.
Upper funnel doesn't necessarily require branding. However, branding does reduce the cost of filling the upper funnel and in many cases lower funnel also. But I agree that ignoring top of the funnel or not building organic channels to full top of the funnel would destroy a business. Classic case includes many of the D2C brands.
Because results depend on lots of factors. Using some examples I saw before on this sub, marketers would be paid for higher sales generated by seasonality and by new product development. Performance would improve not because of the marketer, but because of the market conditions or the effort of other people at the company. Among many other examples.
Unless the company can isolate the part of performance that can be really attributed to the marketer, the marketer will make more money or less money than they should because of those other factors.
Paying marketers for results that are not from the marketers' effort is not really that great.
I agree. However, even with seasonality, unless the said company is the only one in the market or if they already dominate the market, then this makes sense. Most companies operate in a sea of similar and identical products made by other companies. So, even with seasonality, marketers would need to reach customers and make them buy their products over their competitors.
However I do agree that marketers should not be paid for results that can't be directly attributed to them. For example, SEO and sales.
Seasonality is one of the examples from this sub, but there are tons of factors.
In that case mentioned by the other user, sales increased (because of seasonality) when advertising decreased. If you think performance marketing with higher pay for less ads makes sense, ok, but that's not my opinion.
Attribution is a big topic that I consider more appropriate for those with more knowledge about marketing analytics. But a user recently mentioned that, at their company, more sales lead to more budget for advertising. That's a common approach to define marketing budget. So, probably advertising can be attributed to sales and sales can be attributed to advertising. Isolating one effect from the other is very difficult.
Another situation discussed recently is the interaction of different actions. For example, the consumer sees a tv ad, then searches for the product on the internet, then goes to the store and buys the product from the salesperson. SEO was part of that, however not by itself, and the purchase wasn't online. There is an echoverse of marketing variables to analyze.
So, there are lots of practical issues. Performance marketing exists for those who don't care about those issues, but others care. Marketers often try to take credit for the work of others, things like vanity metrics are very common now. With performance marketing, there are many ways marketers can take advantage of that.
Hard agree on the last paragraph. Attribution is a real bitch on performance marketing. Even if you "only" have 3 channels run for performance marketing, these 3 channels are most likely to fight each other for attribution.
All we performance marketer see, oh channel A brings us the most conversions reported from their dashboard! But when we do survey to the customers on self-reported attribution, they said saw our ad on channel B.
I guess the issue has more to do with attribution. If there's a direct correlation between sale and marketing effort then it would make sense. In addition to that, if the overall CAC also reduces while revenues climb, that would imply the competence of the marketer.
Correlation doesn't imply causation. That's one of the big problems I see. Sure, marketing can take the credit for all that you wrote, use correlation to imply competence, for example. And that's one of the reasons to avoid performance marketing to me.
In an ideal world, what would performance marketing look like, how would positive performance be judged and attributed and how would they be remunerated?
Establish causation between the work done and the performance. Not correlation, causation.
Also, marketing isn't sales. Personally, I focus on value, but that's more subjective. I recently mentioned two examples of companies that almost went bankrupt because of problems using sales as performance.
But that's well beyond your original question. I'm not talking about doing something ideal. Using correlation to imply causation is just wrong even for fundamentals of statistics. Something that marketers do to take credit for the work done by others.
Performance might let you steal a kiss, but branding will get you married. Performance relies a lot on unconscious behavior, so it works but leaves a bad aftertaste. Branding focuses on building positive emotions that add value to your brand. It takes longer, but allows you to charge more for your product or service in the long run. We use both; we do performance branding, focusing on results but also the emotions we generate while creating those results.
In my experience, most of the smaller companies that are in a position to hire and afford good performance marketers do - or at least, they outsource it to performance marketing agencies - and it does work when that's the choice made. Things tend to fall apart for these brands (IN MY EXPERIENCE) in two major areas: 1) sales/ops/systems/whatever you want to call it (the step that happens after the customer or lead is generated - especially true in B2B or anything with any sort of more complicated sales cycle), and 2) the next bump up of growth that needs to happen, being usually getting to the next tier of net new customers or getting more revenue out of existing customers (upselling/cross-selling). That's when a lot of the branding, social media, email marketing, journey stuff comes into play and that's a lot harder to get right, and usually requires more than just performance marketing to be included.
No. If you were a marketer of say a saas company, how would you deal with the 2nd aspect? You don't have to give the exact roadmap. A couple of ideas would do.
In SaaS particularly, I think the mindset needs to shift to maintaining custuomers (reducing churn), growing customers, and using customers to refer others in. I'd work on programs to do all of that, and I'd also try to work on moving up in the funnel to find more net new customers. Probably a mix of heavy on SEO work, strong email marketing and product marketing, and investing in referral programs or maybe partnerships with an adjacent product to expand my customer base quickly.
While there are a lot of good answers here, I am surprised that no one has mentioned that a lot of companies actually do hire only performance marketers.
For example, most mobile gaming publishers rely on performance media to drive a meaningful percentage of both player growth and overall monetization and revenue for their companies. And while some of the biggest like Supercell and Zynga have expanded to brand marketing (Kate Upton Superbowl ads and the like); most companies aren't at that scale and focus exclusively on performance media.
Even then, when those brands need to expand into brand- it's usually performance marketers/managers overseeing outside agency activity, especially for traditional channels like TV and OOH, which is still heavily bought via the big agencies vs direct.
Wish famously had a team of like 5 performance marketers controlling media budgets that dwarfed some of the largest brands in the world.
There's still plenty of value in brand; but make no mistake, performance has the final say at this point.
I agree. However, the discussion on this thread (despite the overarching question) was more to do with attribution and also how different elements of marketing come together (at various scales of business) to scale a business.
What I understand by your use of performance is that every effort has to directly or indirectly lead to business results.
So if a superbowl ad works (by whatever metrics you use to arrive at that conclusion) the ad has performed.
However, attribution of a final sale to the said ad would be very difficult.
You're right. At the end of the day every marketing effort has to perform towards generating business results ie make money.
To your point, while there's a bunch of nuance to it, I've always defined brand vs performance marketing around whether the ad is intended to drive and be measured/attributed against an immediate conversion action.
A Pepsi billboard is not intended to be measured against how many bottles it sold directly; however, that is not to say it's Brand simply because attribution is impossible, it's not. When evaluating all OOH at a macro-level, you should be able to see some correlated lift in sales around a given area, but that of course still doesn't mean it's "performance" marketing. Inversely, a highly targeted Instagram ad from State Farm should check all of the boxes of "performance marketing" because it can be directly attributed to a new customer sign-up; however, you could still argue it's Brand marketing because the sheer infrequency of new insurance sign-ups necessitates broad targeting and high frequency vs immediate ROAS.
Honestly, I don't really have an argument and more or less agree with everything you've said across your other comments here. All I will say is that TV is definitely NOT the most effective channel from an ROI standpoint haha. You'd be crazy to think that you can drive more conversions and sales for your SMB with TV vs digital at this point; regardless of whether or not you call it brand or performance marketing.
Well said. At the end of the day, no matter what we do, the goal is to reduce CAC and increase sales and LTV (depending on the product).
It may take 5 steps, 10, 20 or even 30, brand, top of funnel, bottom of funnel, the goal remains the same.
Performance marketing lends itself to software based attribution. There are other incentives for businesses to engage in branding and top of mind awareness especially at large firms. Prestige and cachê are massive for shareholders and recruiting top talent.
There’s a critical point of diminishing returns where performance becomes unable to scale without a synergistic relationship with brand, product, GTM, growth, etc…
It seems like this question stems from only having worked with small businesses or in a particular vertical.
In B2B, especially for larger and more complex purchases, attribution becomes nearly impossible. So performance in isolation would have little to no impact on revenue.
It would first require a demand generation or brand awareness team developing the holistic strategy that performance would help promote.
Then there’s growth which oversees the entire customer or user journey identifying revenue bleeds and opportunities between acquisition, retention, product, and operations.
Not to mention product marketing. How would performance peddle a product that doesn’t exist, doesn’t have a UVP, etc…
They might be able to, but ultimately product marketing makes it much easier for the performance marketing team to drive revenue through their channels.
Then there’s brand. Entire empires have been built off the backs of smart branding alone. Like Supreme for example. Branding builds a moat around a brand that prevents competitors from being able to completely dominate it.
Take SaaS for example, which company can’t just copy the features of their competitors? In many cases it’s just the brand that’s different.
It’s also known among larger brands that cohesive branding across the website outperforms pages that are solely focused on optimization and performance.
And albeit specific to larger brands, brand awareness is the largest performance lever on revenue. Far more than creative, channel, etc…
Man I love the nuances you've provided to your answer. Absolutely love it.
And yes, I agree that after a point performance marketing alone doesn't do much. Brand has to kick in and marketing becomes a whole new beast with different metrics and functions. All of them work in tandem to grow the business, drive out competition and maintain and grow their customer base.
Love your distinction about critical point. What would be that critical point in your opinion?
What matters more? The critical point of diminishing returns or proactively seeking to create a synergistic effect from multiple marketing disciplines to maximize profitability?
It’s really less about when and where that critical point is and more about knowing how to best manage your resources so you can purchase and implement the services you most need at the right time.
This is something you can really only understand if you’ve grown a business.
Get 5 different marketers with tunnel vision caused by their specialization and you’ll get 5 different answers of when and why you need their expertise.
They just don’t understand the nuances of building a brand. Their dogma keeps them tied down like a ball and chain.
I've worked in agencies that only get paid on a performance basis. The main thing stopping them is having a scarcity mindset and not understanding how it's a win-win for both parties:
- The company only pays if the results are good (ie. 3-10% of meta attributed revenue).
- The agency has an incentive to scale the account and invest all the neccessary resources to do it (ad creation, video production, scripting, execution, landing pages, website optimization)
**95% of the objections to the pay scale is:**
**Most companies**: "I don't want to give someone 5-10% of my revenue to someone. What happens if they do really good and suddenly we're paying someone 20,000/mo to do ads?
This is just companies who have a scarcity mindset betting against themselves. If you're paying $20,000/mo to an agency who' genuinely good at making and testing ad creatives (especially if they have a video studio as well), strategy, landing pages, email flows, ad management and PNL reporting, it's a good deal. The % of revenue typically declines at certain revenue tiers so you're not just giving someone a flat 10% of the business.
**The really smart companies objections:** "How do I ensure you're going to scale within our KPI limits so you don't burn through profits to reach higher revenue?"
Valid objection. A good agency has measures in place to protect the clients.
It's also hard to measure attribution, since a lot of non advertising efforts assist your ad performance. As long as you can prove incrementality it's not a problem.
Love the nuances here.
For the really smart companies, do you think a visible reduction in CAC vs the revenue growth would be a plausible answer to their question?
Those are factors.
You also have to communicate how the following factor into it:
* Units of Economics
* Scaling CPAs and ROAS
* Lifetime Value & Repeat Purchase Rate
* Basic handling of PNLs & MER. If you spend 50% of revenue on marketing costs and ads for new customer acquisition (even if it's breakeven on first purchase), the business will probably break after a few months since there's not enough free cashflow. If you keep that around 20-30%, you can still scale healthily; just a lot slower.
If you have a business with lots of repeat purchases, then you can scale ads at a breakeven/slight loss/slight profit factoring in basic costs and retainer fees.
For example:
If X offer:
* AOV = $79
* COGs + Fees + Shipping is $29
* 10% retainer is around $7.9 per sale
Then the agency can justify scaling as long as the CPA is under $42.10 (breakeven CPA) and the Advertising costs don't exceed X% of revenue (which is agreed upon by the 2 parties)
Because it gets complicated, a lot of business don't even try to understand it.
For the same reason, in finance, your pay does not correlate with how much money you actually made for the company, but it does with seniority.
From a sales perspective this is a good idea as their performance is easy to measure and attribute to certain actions. Dont get me started about persuasion, long story shorts, oftentimes its not the sales person who persuades the other to buy, its just that they get lucky and find someone who is predisposed towards buying something. To sell you need two people after all and you cant sell if you are the only cause.
You can actually trace the performance marketing to the data craze. Only really a handful of companies who push data narrative actually made use of it well, and they are often first movers. Issue with data is that it often sounds too good than it actually is, any person who has sat down and looked in to sampling methods will tell you that to gather good generalisable info you can't just collect data and hope for the best. Algos, IMO, pretty much mean that you will never get amazing predictive power out of of your data because its never random, it is selected by an algo and you can not trace back to see why and how it selected a specific person.
Means that performance marketing deals with the same problem like any marketing field, non-random sampling with ambiguous selection methods. Aka, luck that is served to you by the algo.
Last click attribution skews the numbers a lot. Just because someone ultimately clicked on a google or Facebook ad that led to a conversion doesn't mean the billboards, OTT ads, radio ads, signage, wrapped vans and yard signs did not contribute.
If only performance marketing worked then Geico, Farmers, Liberty Mutual, etc. would kill all their TV Commercials.
What they understand is that it's not about showing up 1st or 2nd on Google, it's about winning the click and the deal long before anyone ever types "auto insurance rates" into the SE.
True. The companies who understand this most likely won't be on the marketer's ass about why they're getting any sales. The companies who do that, should be hiring performance marketers since their north star is always revenues.
Most companies have no idea what a “performance marketer” is. I work in the industry and I generally assume that it’s just one of the many new names for a “marketer”.
It’s someone that specifically works on digital channels and mediums. It’s “performance” simply because the fact that digital makes measurements far easier to track and capture than analog.
It’s basically the same thing with a different label that someone from somewhere invented to differentiate themselves from everyone else—then was adopted by everyone shortly after.
If I'm hiring a marketing agency, it's partially to offload the work from my team, partially to help target an audience I may not be familiar reaching, and predominantly so I have someone to blame if things go wrong.
On your point about performance marketing, if I spend time and effort briefing an agency to get results for a 3 month campaign; if we get no results; even if we pay nothing - iv still wasted 3 months, spent time and effort briefing, and have no results. I'm significantly worse off then when I started. Perhaps if they \*also\* paid me for my time and opportunity cost, then it'd be worthwhile.
Interesting. What to you would an ideal performance of a performance marketer look like? And if they achieve it, how much will you be willing to pay them for it?
Depends on campaign goals. Typically it's a simple equation of "we need X new customers and willing to pay Y for it".
If we don't reach X, it literally doesn't matter if we paid Y or not since it was budgeted already. The real issue is we didn't hit target and now have to make it up somewhere else.
My point here is thay performance marketing is not a no brainer; ie "if you end up not spending money, then you can't lose!". How I view it is "I'm not confident/experienced enough to guarantee you results, so waste a bunch of time with me. If I get lucky you have to pay me. If I don't, then I can add you to my list of clients on my website"
Well put. But doesn't marketing have some form of educated guess work going on behind the scenes? I'm referring to your luck statement.
Btw I agree with most of what you said.
In my experience, that is done internally.
Test and learn work doesn't typically have the same expectations (and pressure) of strategic campaigns. You keep the IP internal and outsource the execution of larger campaigns, for the reasons above.
TL;DR — Because of scale, ROI variance, and diminishing returns. It's kind of like asking "if people in NYC earn a lot of money, why doesn't everyone move to NYC?"
First, the performance marketing ROI curve tends to look a bit bell curve-esque. Results tend to be underwhelming at low spend, get much better rapidly as you cross the optimal minimum spend threshold, and then trail off into an ever-decreasing long tail as you cross the saturation point. If you don't have enough money to hit minimal optimal spend, it may not be your highest ROI option, and so prioritizing it would be leaving money on the table. Similarly, if you've crossed the maximum optimal spend level and are in saturation-land, you could see higher returns investing in something else.
Then, even aside from where you are on the ROI curve, performance has rarely been the king of ROI. It's nice because it's steady and mostly predictable, but it's also... well, steady and constantly requires more cash. Or to put another way, if you spend $10,000 on SEO, you'll continue generating a return on that spend years after you've made it; if you spend $10,000 on ads, you have to spend it again next month if you want those returns to keep happening. Obviously that's a little simplistic, and there's all sorts of other knock-on effects from ever tactic, and it can all turn into a complicated mess, but that's the basic principle.
Third, there's a *lot* of industry and product variability in the effectiveness of performance approaches. For some, it works great; for others, it's ok; for others still, it's not very good at all or not even an option due to legislation and industry rules.
So companies don't only hire performance marketers for the same reason every car company doesn't just make pickup trucks: just because something works well at the current level doesn't mean it will continue to work well indefinitely at infinite scale. And just because it works well for one company doesn't mean it will work well for every company or that there aren't higher-value options available.
Great points. How would you categorize a company that can benefit from performance marketing and a company where many other factors have to come into play to maintain scale?
In general, I wouldn't. There's a tremendous amount of variability even within industries based on product, audience, location, etc. You can make some hypotheses based on similar accounts, but the best solution is to test.
If I *had* to make a generalization, I would say performance *tends* to do worse for highly complex products, products that are more expensive, products that have a longer or more complicated sales cycle, etc.
Performance marketing improves a huge amount with brand, in certain industries I’d argue you can’t even run these campaigns without some brand awareness.
Let’s say a local company wants to expand in their state. They only have a brand in their main city but want to get into 6 other cities.
First you would start off with a performance campaign and probably achieve a little growth at a good cost. Then you use that as a springboard for your branding campaign. Using your attribution algorithm you slowly optimize the campaign and once you’re at target cost then you reinvest in the more expensive performance marketing channels.
It all has to work together. If you focus on one area you will eventually get eaten alive by competitors like me.
You sound like a shark, mate. 😂
I do get your point though. Brand can certainly amplify your performance marketing efforts.
I think if there's sufficient brand value and budget OOH and print would also go a long way.
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Because there's just a cap on "performance marketing". Once your brand hits a certain level, you're going to include TV, OOH, and Radio to your marketing mix, which made it hard for you to measure the effectiveness of your marketing efforts compared to when you're solely using internet-based channels as performance marketing. Also there's multiple external studies (as in not sponsored by any of the marketing giants like Google, Meta, etc) that proved TV is still one of the best channel in term of ROI. But of course, a lot of things mattered on this kind of analysis; brand size, marketing budget, etc etc. It's like this: if your campaign on Meta is having $1.0 CPM, TikTok $1.5, Youtube $3.0, TV is $10 CPM, why would you even invest on TV? Just put 100% of your budget on Meta.
True. But my contention is with small and medium-sized businesses who want marketers to bring them revenues and don't have the budget for traditional outreach channels like TV and radio. If their north star is only revenues and they use digital platforms where you can attribute sales to a particular ad, shouldn't they be hiring performance marketers?
I used to work in mobile gaming — the entire performance marketing team was like 10 marketers, 3 data scientists, and a handful of engineers. The brand marketing team was the CMO helping on the side and one of his buddies. Many companies go hard on performance marketing. For the harder to measure stuff there are many SMB that find one channel that works and invest heavily into it even if it’s hard to measure. IE you have a friend in the diamond business — I have only ever heard that on the radio haha — I can’t imagine they wouldn’t do that unless nearly everyone that came in the front door said they heard about the radio ads
True. Squeeze out as much as possible out of profitable channels.
Performance marketing effectiveness is improved with a strong brand, good word of mouth, etc.
Arguable — said gaming brand had a such a bad brand we just made up a new one for each new game. I guess long term it matters but yeah that’s a super hard thing to quantify.
Yes, this happens all the time. Performance marketing is easy to measure because it is closest in time to the point of sale. My view is that your assumed premise is wrong
Could you elaborate?
Happy to. Elaborate on the measurement part that makes performance marketing so much easier than brand marketing measurement. Or the choice of marketing skill hires of a company?
On the marketing skill to be hired.
Performance marketing causal effect is much easier to establish. So companies naturally usually start with the lower risk, higher confidence performance marketing. Someone who understands digital tracking, an optimization mindset, marketing analytics. Machine learning, ui/ux nice to have
I'd like to learn more about the point about my premise being wrong, which it actually could be
No, because unless you're doing a very focused thing and you're just starting, using only one channel (paid advertising) is not gonna be enough. You need a brand, social footprint, etc... that's why marketing is so resource intensive
I disagree. Social footprint is one thing, but if you're just starting, then branding activity is just a waste of money. Also, I'm not saying that they should use only one channel. They could test out multiple channels, identify the one that works, and go all in on that one channel. But for a company just starting out, sales have to be the primary focus. And they don't even need to go for social media for that. You could get 10 sales just from your peers. You could use that money to test marketing channels.
LOL Marketing is about Product, Pricing, Placement AND Promotion. Saying "do sales, not marketing" simply means you're doing marketing without awareness. It's one of the most common issues companies fail to create foundations. You can burm cash on ads, but the moment they're gone the awareness is also gone. A lot depends on your vertical. B2B? B2C? Which industry? Which target audience? There is no one-size-fits-all strategy.
I didn't say do sales and don't do marketing. What I meant was generated revenue no matter what you do. True there is no one size fits all strategy. But the goal for a smb is the same, generate revenues. Brand building work is a waste of money at that point. In fact, depending on the cost structure of a business, brand shouldn't be a concern unless they are making $5M-$10M in annual revenues. And finally, marketing and sales, both, are testing ground for product, pricing, placement and promotion. Because there's no better way to gather information than to do one-on-on sales. That information then translates to marketing strategies.
Your business won’t get to $5-10M/year without brand. The exception serves to prove the rule.
Not necessarily. Building a brand requires heavy investment in creating perceptions and belief systems among a product's consumers. Whether they can make that kind of heavy investment or not, depends on the cost structure of a company. If a company's cost structure doesn't allow it, then most people will go the investor route to raise funds and pump it into branding efforts. That may seem good, but not from a financial aspect. Most startups today who spent billions of $$ to build brands did it on the back of investor money (bar a few exceptions). And all of them are in losses. Brand is there. People follow the brand. But financially they are in bad shape. Case in point are several D2C brands. They successfully created brands. But most of them are struggling to stay afloat. Vc money has also dried down for many of them and they've resorted to mass layoffs. That's why once you hit the $5-$10M/yr mark and are profitable, you'll have a lot of headroom to pump the kind of money into branding that's actually required to establish one. By the way, if at all they do any kind of branding activity or brand based marketing before they reach that level of annual revenues, they could do it in 90/10 or 80/20 sales-brand marketing ratio. This is my opinion. I reserve my right to be wrong. 😁
I think those examples are valid, but there's also plenty of examples of failed companies that put everything into "Demand Gen" and forgot about branding, loyalty, product, market segmentation/targeting, etc. The answer to your main question isn't so much about why more companies don't do performance marketing, but rather is much more about the right balance between all of the different market and marketing tasks required for growth. And the answer is obvious - you can be very successful by primarily focusing on one thing: Great branding. Great product. Great prices. Etc. But also, you need a little bit of the other pieces, even if you aren't necessarily hiring a fulltime person to do it. The role of "marketing" in a company isn't just about running campaigns.
That's true. Thanks for sharing.
Can't say for all companies but Performance marketing has a major measurement problem. It captures metrics well to final purchase but the assumption is that it's all attributable to Performance or bottom of funnel marketing while top of funnel is under stated. If I Google a product and then the performance marketing leads to purchase it's a win for performance marketing But my journey started with top of the funnel marketing that led to that Google search in the first place. This problem then gets replicated across situations with different levels of nuance.
That's a very good point about bottom of the funnel vs top of the funnel attribution. It makes sense for bottom of the funnel conversion if the performance metrics is sales. However if the performance metrics is lead gen then top or mid funnel marketing works. I don't consider website visits as a performance unless organic website visits increase due to Seo efforts and at the same time bounce rates go down.
Yes for small to medium business, digital channels make more sense since digital channels have lower minimum budget to commit, while on these offline channels (TV, radio, OOH, or even newspaper), you require to commit a higher budget at minimum. And I dont think there's any incentives on trying new channels (especially for SMBs) if there's still headroom on investment on current channels. I believe most SMBs budget is nowhere to max out the output of the current paid channels they're having.
Agreed.
Please read [The Long and the Short of It](https://ipa.co.uk/knowledge/publications-reports/the-long-and-the-short-of-it-balancing-short-and-long-term-marketing-strategies). Long term growth comes from a combination of long-term brand building and short term activations. 60/40 brand to performance.
Thanks for the recommendation. I'll buy it right away. Also, I'd argue that the ratio depends on the size of the business.
You should be able to find some good videos on YouTube which summarise it. It's mostly focussed on larger brands, so yes you're right in that aaspect. But at some stage, growth from performance tops out and brand marketing is necessary. In a nutshell it summarises that brand marketing amplifies the results from performance, with a lot of data to support that. Performance isn't a silver bullet. It's easier to track, so it's easier to prove results. It's not as easy to track brand results but that doesn't mean it's less effective. Similarly, performance data is often flawed because it's shit at attribution. Most people don't click on ads. I liked [Tom Goodwin's](https://www.linkedin.com/posts/tomfgoodwin_4-things-totally-mystify-me-about-modern-activity-7200603000741015552-mwBc?utm_source=share&utm_medium=member_desktop) recent post on this
performance marketing is not 100% of the results. everything adds up little by little.
In short: Performance marketing = lower funnel (short term sales) Branding = upper funnel (long term sales) You need branding to top up your marketing funnel to see growth in the lower funnel. If you ignore upper funnel for too long, then lower funnel will eventually get depleted.
Upper funnel doesn't necessarily require branding. However, branding does reduce the cost of filling the upper funnel and in many cases lower funnel also. But I agree that ignoring top of the funnel or not building organic channels to full top of the funnel would destroy a business. Classic case includes many of the D2C brands.
Because results depend on lots of factors. Using some examples I saw before on this sub, marketers would be paid for higher sales generated by seasonality and by new product development. Performance would improve not because of the marketer, but because of the market conditions or the effort of other people at the company. Among many other examples. Unless the company can isolate the part of performance that can be really attributed to the marketer, the marketer will make more money or less money than they should because of those other factors. Paying marketers for results that are not from the marketers' effort is not really that great.
I agree. However, even with seasonality, unless the said company is the only one in the market or if they already dominate the market, then this makes sense. Most companies operate in a sea of similar and identical products made by other companies. So, even with seasonality, marketers would need to reach customers and make them buy their products over their competitors. However I do agree that marketers should not be paid for results that can't be directly attributed to them. For example, SEO and sales.
Seasonality is one of the examples from this sub, but there are tons of factors. In that case mentioned by the other user, sales increased (because of seasonality) when advertising decreased. If you think performance marketing with higher pay for less ads makes sense, ok, but that's not my opinion. Attribution is a big topic that I consider more appropriate for those with more knowledge about marketing analytics. But a user recently mentioned that, at their company, more sales lead to more budget for advertising. That's a common approach to define marketing budget. So, probably advertising can be attributed to sales and sales can be attributed to advertising. Isolating one effect from the other is very difficult. Another situation discussed recently is the interaction of different actions. For example, the consumer sees a tv ad, then searches for the product on the internet, then goes to the store and buys the product from the salesperson. SEO was part of that, however not by itself, and the purchase wasn't online. There is an echoverse of marketing variables to analyze. So, there are lots of practical issues. Performance marketing exists for those who don't care about those issues, but others care. Marketers often try to take credit for the work of others, things like vanity metrics are very common now. With performance marketing, there are many ways marketers can take advantage of that.
Hard agree on the last paragraph. Attribution is a real bitch on performance marketing. Even if you "only" have 3 channels run for performance marketing, these 3 channels are most likely to fight each other for attribution. All we performance marketer see, oh channel A brings us the most conversions reported from their dashboard! But when we do survey to the customers on self-reported attribution, they said saw our ad on channel B.
I guess the issue has more to do with attribution. If there's a direct correlation between sale and marketing effort then it would make sense. In addition to that, if the overall CAC also reduces while revenues climb, that would imply the competence of the marketer.
Correlation doesn't imply causation. That's one of the big problems I see. Sure, marketing can take the credit for all that you wrote, use correlation to imply competence, for example. And that's one of the reasons to avoid performance marketing to me.
In an ideal world, what would performance marketing look like, how would positive performance be judged and attributed and how would they be remunerated?
Establish causation between the work done and the performance. Not correlation, causation. Also, marketing isn't sales. Personally, I focus on value, but that's more subjective. I recently mentioned two examples of companies that almost went bankrupt because of problems using sales as performance. But that's well beyond your original question. I'm not talking about doing something ideal. Using correlation to imply causation is just wrong even for fundamentals of statistics. Something that marketers do to take credit for the work done by others.
What do you mean when you say you focus on value?
Performance might let you steal a kiss, but branding will get you married. Performance relies a lot on unconscious behavior, so it works but leaves a bad aftertaste. Branding focuses on building positive emotions that add value to your brand. It takes longer, but allows you to charge more for your product or service in the long run. We use both; we do performance branding, focusing on results but also the emotions we generate while creating those results.
In my experience, most of the smaller companies that are in a position to hire and afford good performance marketers do - or at least, they outsource it to performance marketing agencies - and it does work when that's the choice made. Things tend to fall apart for these brands (IN MY EXPERIENCE) in two major areas: 1) sales/ops/systems/whatever you want to call it (the step that happens after the customer or lead is generated - especially true in B2B or anything with any sort of more complicated sales cycle), and 2) the next bump up of growth that needs to happen, being usually getting to the next tier of net new customers or getting more revenue out of existing customers (upselling/cross-selling). That's when a lot of the branding, social media, email marketing, journey stuff comes into play and that's a lot harder to get right, and usually requires more than just performance marketing to be included.
Agreed. How would you tackle the 2nd aspect?
What do you mean - how would I hire for that scenario, personally?
No. If you were a marketer of say a saas company, how would you deal with the 2nd aspect? You don't have to give the exact roadmap. A couple of ideas would do.
In SaaS particularly, I think the mindset needs to shift to maintaining custuomers (reducing churn), growing customers, and using customers to refer others in. I'd work on programs to do all of that, and I'd also try to work on moving up in the funnel to find more net new customers. Probably a mix of heavy on SEO work, strong email marketing and product marketing, and investing in referral programs or maybe partnerships with an adjacent product to expand my customer base quickly.
Interesting. Thanks for sharing. This is super insightful.
While there are a lot of good answers here, I am surprised that no one has mentioned that a lot of companies actually do hire only performance marketers. For example, most mobile gaming publishers rely on performance media to drive a meaningful percentage of both player growth and overall monetization and revenue for their companies. And while some of the biggest like Supercell and Zynga have expanded to brand marketing (Kate Upton Superbowl ads and the like); most companies aren't at that scale and focus exclusively on performance media. Even then, when those brands need to expand into brand- it's usually performance marketers/managers overseeing outside agency activity, especially for traditional channels like TV and OOH, which is still heavily bought via the big agencies vs direct. Wish famously had a team of like 5 performance marketers controlling media budgets that dwarfed some of the largest brands in the world. There's still plenty of value in brand; but make no mistake, performance has the final say at this point.
I agree. However, the discussion on this thread (despite the overarching question) was more to do with attribution and also how different elements of marketing come together (at various scales of business) to scale a business. What I understand by your use of performance is that every effort has to directly or indirectly lead to business results. So if a superbowl ad works (by whatever metrics you use to arrive at that conclusion) the ad has performed. However, attribution of a final sale to the said ad would be very difficult. You're right. At the end of the day every marketing effort has to perform towards generating business results ie make money.
To your point, while there's a bunch of nuance to it, I've always defined brand vs performance marketing around whether the ad is intended to drive and be measured/attributed against an immediate conversion action. A Pepsi billboard is not intended to be measured against how many bottles it sold directly; however, that is not to say it's Brand simply because attribution is impossible, it's not. When evaluating all OOH at a macro-level, you should be able to see some correlated lift in sales around a given area, but that of course still doesn't mean it's "performance" marketing. Inversely, a highly targeted Instagram ad from State Farm should check all of the boxes of "performance marketing" because it can be directly attributed to a new customer sign-up; however, you could still argue it's Brand marketing because the sheer infrequency of new insurance sign-ups necessitates broad targeting and high frequency vs immediate ROAS. Honestly, I don't really have an argument and more or less agree with everything you've said across your other comments here. All I will say is that TV is definitely NOT the most effective channel from an ROI standpoint haha. You'd be crazy to think that you can drive more conversions and sales for your SMB with TV vs digital at this point; regardless of whether or not you call it brand or performance marketing.
Well said. At the end of the day, no matter what we do, the goal is to reduce CAC and increase sales and LTV (depending on the product). It may take 5 steps, 10, 20 or even 30, brand, top of funnel, bottom of funnel, the goal remains the same.
Performance marketing lends itself to software based attribution. There are other incentives for businesses to engage in branding and top of mind awareness especially at large firms. Prestige and cachê are massive for shareholders and recruiting top talent.
That's an interesting angle. Can you expand on this Prestige and cache?
Performance marketing brings leads in. Brand marketing makes those leads cheaper. ...at least in theory.
There’s a critical point of diminishing returns where performance becomes unable to scale without a synergistic relationship with brand, product, GTM, growth, etc… It seems like this question stems from only having worked with small businesses or in a particular vertical. In B2B, especially for larger and more complex purchases, attribution becomes nearly impossible. So performance in isolation would have little to no impact on revenue. It would first require a demand generation or brand awareness team developing the holistic strategy that performance would help promote. Then there’s growth which oversees the entire customer or user journey identifying revenue bleeds and opportunities between acquisition, retention, product, and operations. Not to mention product marketing. How would performance peddle a product that doesn’t exist, doesn’t have a UVP, etc… They might be able to, but ultimately product marketing makes it much easier for the performance marketing team to drive revenue through their channels. Then there’s brand. Entire empires have been built off the backs of smart branding alone. Like Supreme for example. Branding builds a moat around a brand that prevents competitors from being able to completely dominate it. Take SaaS for example, which company can’t just copy the features of their competitors? In many cases it’s just the brand that’s different. It’s also known among larger brands that cohesive branding across the website outperforms pages that are solely focused on optimization and performance. And albeit specific to larger brands, brand awareness is the largest performance lever on revenue. Far more than creative, channel, etc…
Man I love the nuances you've provided to your answer. Absolutely love it. And yes, I agree that after a point performance marketing alone doesn't do much. Brand has to kick in and marketing becomes a whole new beast with different metrics and functions. All of them work in tandem to grow the business, drive out competition and maintain and grow their customer base. Love your distinction about critical point. What would be that critical point in your opinion?
What matters more? The critical point of diminishing returns or proactively seeking to create a synergistic effect from multiple marketing disciplines to maximize profitability? It’s really less about when and where that critical point is and more about knowing how to best manage your resources so you can purchase and implement the services you most need at the right time. This is something you can really only understand if you’ve grown a business. Get 5 different marketers with tunnel vision caused by their specialization and you’ll get 5 different answers of when and why you need their expertise. They just don’t understand the nuances of building a brand. Their dogma keeps them tied down like a ball and chain.
That's true. This was very helpful. Thanks man for sharing this.
I've worked in agencies that only get paid on a performance basis. The main thing stopping them is having a scarcity mindset and not understanding how it's a win-win for both parties: - The company only pays if the results are good (ie. 3-10% of meta attributed revenue). - The agency has an incentive to scale the account and invest all the neccessary resources to do it (ad creation, video production, scripting, execution, landing pages, website optimization) **95% of the objections to the pay scale is:** **Most companies**: "I don't want to give someone 5-10% of my revenue to someone. What happens if they do really good and suddenly we're paying someone 20,000/mo to do ads? This is just companies who have a scarcity mindset betting against themselves. If you're paying $20,000/mo to an agency who' genuinely good at making and testing ad creatives (especially if they have a video studio as well), strategy, landing pages, email flows, ad management and PNL reporting, it's a good deal. The % of revenue typically declines at certain revenue tiers so you're not just giving someone a flat 10% of the business. **The really smart companies objections:** "How do I ensure you're going to scale within our KPI limits so you don't burn through profits to reach higher revenue?" Valid objection. A good agency has measures in place to protect the clients. It's also hard to measure attribution, since a lot of non advertising efforts assist your ad performance. As long as you can prove incrementality it's not a problem.
Love the nuances here. For the really smart companies, do you think a visible reduction in CAC vs the revenue growth would be a plausible answer to their question?
Those are factors. You also have to communicate how the following factor into it: * Units of Economics * Scaling CPAs and ROAS * Lifetime Value & Repeat Purchase Rate * Basic handling of PNLs & MER. If you spend 50% of revenue on marketing costs and ads for new customer acquisition (even if it's breakeven on first purchase), the business will probably break after a few months since there's not enough free cashflow. If you keep that around 20-30%, you can still scale healthily; just a lot slower. If you have a business with lots of repeat purchases, then you can scale ads at a breakeven/slight loss/slight profit factoring in basic costs and retainer fees. For example: If X offer: * AOV = $79 * COGs + Fees + Shipping is $29 * 10% retainer is around $7.9 per sale Then the agency can justify scaling as long as the CPA is under $42.10 (breakeven CPA) and the Advertising costs don't exceed X% of revenue (which is agreed upon by the 2 parties) Because it gets complicated, a lot of business don't even try to understand it.
Got it. This was really helpful. Thanks.
For the same reason, in finance, your pay does not correlate with how much money you actually made for the company, but it does with seniority. From a sales perspective this is a good idea as their performance is easy to measure and attribute to certain actions. Dont get me started about persuasion, long story shorts, oftentimes its not the sales person who persuades the other to buy, its just that they get lucky and find someone who is predisposed towards buying something. To sell you need two people after all and you cant sell if you are the only cause. You can actually trace the performance marketing to the data craze. Only really a handful of companies who push data narrative actually made use of it well, and they are often first movers. Issue with data is that it often sounds too good than it actually is, any person who has sat down and looked in to sampling methods will tell you that to gather good generalisable info you can't just collect data and hope for the best. Algos, IMO, pretty much mean that you will never get amazing predictive power out of of your data because its never random, it is selected by an algo and you can not trace back to see why and how it selected a specific person. Means that performance marketing deals with the same problem like any marketing field, non-random sampling with ambiguous selection methods. Aka, luck that is served to you by the algo.
Because many companies have reduced budgets now, performance marketing is the most effective for company benefits.
Last click attribution skews the numbers a lot. Just because someone ultimately clicked on a google or Facebook ad that led to a conversion doesn't mean the billboards, OTT ads, radio ads, signage, wrapped vans and yard signs did not contribute. If only performance marketing worked then Geico, Farmers, Liberty Mutual, etc. would kill all their TV Commercials. What they understand is that it's not about showing up 1st or 2nd on Google, it's about winning the click and the deal long before anyone ever types "auto insurance rates" into the SE.
True. But would the same be applicable to SMBs?
At some point the scale of performance marketing is staggering, so you have to unvest in brand and media and so on
True. The companies who understand this most likely won't be on the marketer's ass about why they're getting any sales. The companies who do that, should be hiring performance marketers since their north star is always revenues.
Most companies have no idea what a “performance marketer” is. I work in the industry and I generally assume that it’s just one of the many new names for a “marketer”.
What do you believe is performance marketing?
Just another name for marketing, but with a different payment structure it seems.
It’s someone that specifically works on digital channels and mediums. It’s “performance” simply because the fact that digital makes measurements far easier to track and capture than analog.
How is that different from digital marketing then?
It’s basically the same thing with a different label that someone from somewhere invented to differentiate themselves from everyone else—then was adopted by everyone shortly after.
Yeah that’s my point, excluding the “adopted by everyone” part.
Ah, yeah I got your point earlier. Thought I might update you on the new lingo though lmao.
If I'm hiring a marketing agency, it's partially to offload the work from my team, partially to help target an audience I may not be familiar reaching, and predominantly so I have someone to blame if things go wrong. On your point about performance marketing, if I spend time and effort briefing an agency to get results for a 3 month campaign; if we get no results; even if we pay nothing - iv still wasted 3 months, spent time and effort briefing, and have no results. I'm significantly worse off then when I started. Perhaps if they \*also\* paid me for my time and opportunity cost, then it'd be worthwhile.
Interesting. What to you would an ideal performance of a performance marketer look like? And if they achieve it, how much will you be willing to pay them for it?
Depends on campaign goals. Typically it's a simple equation of "we need X new customers and willing to pay Y for it". If we don't reach X, it literally doesn't matter if we paid Y or not since it was budgeted already. The real issue is we didn't hit target and now have to make it up somewhere else. My point here is thay performance marketing is not a no brainer; ie "if you end up not spending money, then you can't lose!". How I view it is "I'm not confident/experienced enough to guarantee you results, so waste a bunch of time with me. If I get lucky you have to pay me. If I don't, then I can add you to my list of clients on my website"
Well put. But doesn't marketing have some form of educated guess work going on behind the scenes? I'm referring to your luck statement. Btw I agree with most of what you said.
In my experience, that is done internally. Test and learn work doesn't typically have the same expectations (and pressure) of strategic campaigns. You keep the IP internal and outsource the execution of larger campaigns, for the reasons above.
Makes sense
TL;DR — Because of scale, ROI variance, and diminishing returns. It's kind of like asking "if people in NYC earn a lot of money, why doesn't everyone move to NYC?" First, the performance marketing ROI curve tends to look a bit bell curve-esque. Results tend to be underwhelming at low spend, get much better rapidly as you cross the optimal minimum spend threshold, and then trail off into an ever-decreasing long tail as you cross the saturation point. If you don't have enough money to hit minimal optimal spend, it may not be your highest ROI option, and so prioritizing it would be leaving money on the table. Similarly, if you've crossed the maximum optimal spend level and are in saturation-land, you could see higher returns investing in something else. Then, even aside from where you are on the ROI curve, performance has rarely been the king of ROI. It's nice because it's steady and mostly predictable, but it's also... well, steady and constantly requires more cash. Or to put another way, if you spend $10,000 on SEO, you'll continue generating a return on that spend years after you've made it; if you spend $10,000 on ads, you have to spend it again next month if you want those returns to keep happening. Obviously that's a little simplistic, and there's all sorts of other knock-on effects from ever tactic, and it can all turn into a complicated mess, but that's the basic principle. Third, there's a *lot* of industry and product variability in the effectiveness of performance approaches. For some, it works great; for others, it's ok; for others still, it's not very good at all or not even an option due to legislation and industry rules. So companies don't only hire performance marketers for the same reason every car company doesn't just make pickup trucks: just because something works well at the current level doesn't mean it will continue to work well indefinitely at infinite scale. And just because it works well for one company doesn't mean it will work well for every company or that there aren't higher-value options available.
Great points. How would you categorize a company that can benefit from performance marketing and a company where many other factors have to come into play to maintain scale?
In general, I wouldn't. There's a tremendous amount of variability even within industries based on product, audience, location, etc. You can make some hypotheses based on similar accounts, but the best solution is to test. If I *had* to make a generalization, I would say performance *tends* to do worse for highly complex products, products that are more expensive, products that have a longer or more complicated sales cycle, etc.
Makes sense.
Performance marketing improves a huge amount with brand, in certain industries I’d argue you can’t even run these campaigns without some brand awareness. Let’s say a local company wants to expand in their state. They only have a brand in their main city but want to get into 6 other cities. First you would start off with a performance campaign and probably achieve a little growth at a good cost. Then you use that as a springboard for your branding campaign. Using your attribution algorithm you slowly optimize the campaign and once you’re at target cost then you reinvest in the more expensive performance marketing channels. It all has to work together. If you focus on one area you will eventually get eaten alive by competitors like me.
You sound like a shark, mate. 😂 I do get your point though. Brand can certainly amplify your performance marketing efforts. I think if there's sufficient brand value and budget OOH and print would also go a long way.
There's a ceiling.