By Jason Wulfsohn Co-Founder and COO at AUDIENCEX
The term “performance marketing,” usually connotes a specialized discipline, characterized by the singular use of direct response tactics to drive conversions. Performance marketing has always belonged to the lower funnel, to the end of the customer journey, to programmatic and search — or so the thinking goes. And it has often carried an ambivalent or even negative connotation, as though pursuing conversions required marketers to surrender their creativity and strategic skills to the one-dimensional discipline of raw mathematics.
For the marketer today I would offer a broader (and simpler) definition: performance means accountability to outcomes, all through the funnel. The idea that performance can only equate with a direct response is a relic of a time when marketers could only achieve this level of accountability at its very bottom.
That’s no longer the case. In 2021 the pursuit of performance doesn’t belong to one part of the funnel, to one segment of channels or to one kind of brand or marketer. The evolution of programmatic and data infrastructure has matured to the point where performance is now attainable everywhere and within a large range of budget parameters.
For marketers to seize the powerful opportunities surfaced by these shifts, they’ll have to rethink performance from the ground up. That means dispelling some of the most durable notions concerning what exactly it means, who it concerns and most importantly where it can make a difference.
DTCs: the poster children for this broader definition
In recent years, Direct To Consumer (DTC) brands have emerged as the poster children for this new ethos of performance. DTC brands hail from every conceivable industry, but what unites them is a marketing playbook of rigorous accountability across the entirety of their efforts. DTCs set definable KPIs and ensure that every dollar invested can be precisely measured against its contribution to achieving them. Combine that discipline with the power (and low barrier to entry) of data-driven social platforms, and you have a recipe for new customer acquisition that has disrupted some of the largest companies on the planet.
DTCs deserve credit for harnessing performance strategies into potent weapons for disruption, but their prominence obscures their true identity. In their methods and ambitions, DTCs are really just one highly visible segment of the vast middle market, the somewhat misleading term for any business with revenues between $10 million and $1 billion. – a grouping that includes roughly half of the US economy. Middle-market advertisers are, like their DTC compatriots, primarily concerned with performance. For them, performance is not an abstract notion — it is a set of definable, comprehensible business outcomes to which they hold every marketing dollar accountable: CPA, CPI, ROAS, and so on.
Their marketing operations are lean enough to avoid the kind of siloed workflows that prevail at the largest brands and agencies. Without the belief that they need to specialize their efforts by channel, middle-market advertisers think in an omnichannel way by default. And that approach leads to the second major break with the outdated definition of performance.
Performance is not limited to specific channels or parts of the funnel
Not long ago, performance strategies were really only viable in direct-response channels like email, display, and search, and we are still living with the legacy of that narrow definition. But thinking of performance in this way neglects the fact that media and measurement has evolved, now to the point where TV, audio, and out-of-home can often be held to the same rigorous standards as digital or search. Distinctions between offline and online media, linear and streaming media, one-to-one and one-to-many – all of these have fallen away into a single, unified omnichannel reality.
Convergence is what characterizes the funnel today, which is to say: it has collapsed it.
The customer journey is not a linear progression from awareness to conversion. When consumers engage with all forms of media seamlessly across every channel and device, generalizing the journey as a path from A to B becomes an exercise in futility. Every journey is different. Every journey is multi-dimensional.
Performance marketers look at this path holistically. Their goal is to customize the journey at the aggregate level across all channels, focused on what drives engagement and outcomes at an individualized level.
The new imperative of accountability
This holistic approach is a possibility today in ways that were unimaginable even five years ago. But the outcome is as obvious as it is groundbreaking: performance marketing is now a full-funnel discipline.
Adopting this discipline means redefining what it means to be a performance marketer. I’d argue that the old way of thinking about performance — as belonging to specific channels and specific marketers – is obstructing our ability to actually achieve it.
This bold new definition of performance means relentless accountability to outcomes, no matter what they are, no matter what the tactic, the channel, or budget. Either marketers are performance marketers, or they aren’t holding their efforts — and by extension their marketing agency — accountable enough.