Thinking with Data is written by members of the media community and offers new insight into the digital media revolution.
Today's column was written by Sean Poppen, executive vice president of Matterkind .
Whether a recession is inevitable given the current strength of the labor market and consumer demand remains an open question. However, most businesses consider every item in their budget.
Research clearly shows that investing in marketing during an economic downturn leads to good business results. Some companies have changed their composition and devalued efficiency in favor of brand marketing. Airbnb has done just that, building on the strength of its instantly recognizable brand as a core marketing tactic from 2021.
So, is prioritizing brand marketing over performance the right tactic for brands looking to maintain control over marketing spend in times of uncertainty?
My answer is unequivocally no. Effective marketing is a CFO's dream. this results in measurable growth for every dollar spent. Therefore, it is very important in an unstable economic environment.
1. Productivity increases with funnels
Traditionally, brand and performance have been seen as opposite ends of the funnel. However, the performance tactic is now moving down the funnel, meaning brands can use it to drive awareness and build relationships.
For example, instead of investing in low-funnel affiliate programs, brands can use affiliate marketing through the sites of premium publishers and social media influencers.
But pouring more money into data-driven performance marketing doesn't mean giving up brand identity. Instead, it's important to think of brand marketing as a slow-moving tactic that builds your personality and perspective over time. Getting the balance right is key to optimizing your marketing efforts.
2. Brands are more flexible
Performance marketing has come a long way since its inception two decades ago. Instead of a one-size-fits-all approach, marketers can tailor strategies to their brand's individual needs and set parameters for success. This provides more flexibility and control.
Instead of targeting generic metrics like views or clicks, brand marketers can set their own KPIs. For example, if you are in the retail business, your number one priority may be to attract customers to your physical store. On the other hand, for insurance brands, you can focus on lead generation.
3. Costs can be linked to key business performance indicators
Marketing programs work best when every dollar can be tied to a specific business KPI. This allows CMOs to be more accountable and have effective conversations with management to demonstrate how marketing investments are delivering results.
Transparent performance marketing is fully controlled. Impact is measurable and directly linked to each investment.
4. Wit is a gift
In any given year (and especially in tough economic times), brands don't want to be locked into a fixed monthly fee. They should be able to increase and decrease costs each month based on priorities and the season.
Performance marketing goes beyond simply giving brands the ability to adjust spend as needed. They also pay only for the results achieved. For example, with affiliate TV advertising, brands can pay for additional reach or demographic percentage of the market.
Combined with the expertise and technology of their fulfillment partners, this flexibility allows brands to weather even the toughest economic storms.
5. Brand growth is driven by first-hand data
Although the deadline for the termination of third-party cookies has been postponed again, it is not far off. This means that first-hand data is critical to developing long-term customer relationships.
Brands can use effective marketing to generate leads and get their own first-hand data. In conscious marketing, performance channels are developed to provide relevant and mutually respectful experiences and build long-term relationships with customers.
In times of economic uncertainty, brands must find solutions to help them sustain growth despite tight budgets. Effective marketing can achieve many of the same goals as brand marketing, providing incremental, measurable growth, but with less risk, more control, and more information.
Follow Matterkind ( @Matterkind ) and AdExchanger ( @adexchanger ) on Twitter.
